Student Loan Repayment Plans and Options

Most student loan lenders offer a variety of repayment options. However, the details of each student loan repayment plan differ. Here, we will share brief benefits of Federal and Alternative repayment plans.

Student loan repayment should be seriously considered prior to taking on debt. Typically, it will take students 10 to 20 years after graduation before they are able to repay their student loans in full.

Federal Student Loan Repayment Plans

Standard Repayment

This option requires the borrower to pay a fixed amount each month based on the principle and interest, but will be no less than $50 or the interest that has accrued.

Graduated Repayment

Graduated repayment allows the borrower to make lower payments at the beginning of repayment. Over time, the payments begin to increase. Each of the payments must equal the interest accrued on the loan between scheduled payments and initial payments.

Income-Based Repayment

Income-Based Repayment is a great choice for borrowers facing financial difficulties, as it is based on how much the borrower makes. Borrowers must have proof of financial hardship to qualify and income must be verified every year.

Extended Repayment

Extended Repayment provides eligible Federal Stafford, Federal PLUS and Federal Consolidation loan borrowers with payment relief through a lengthened repayment term of up to 25 years.

Alternative Student Loan Repayment

In most cases, alternative student loan lenders offer the same type of repayment options. These include full loan deferral, interest-only repayment, and immediate interest and principle repayment.

Full Deferral

No principal or interest payments are due while enrolled in school (up to four consecutive years). Payment of principal and interest will begin 6 months after graduation, or if enrollment drops below half-time. Interest will continue to accrue during the deferment period and will be capitalized (added to the loan) at the time of repayment.

Interest Only

Borrowers pay only accrued interest while enrolled in school (up to four consecutive years). Payment of principal and interest will begin 45 days after graduation or if enrollment drops below half time.

Immediate Repayment

Payment of principal and interest will begin immediately after the loan is fully disbursed.

Additional Repayment Options

Along with the plans above, you can utilize the options below to make your monthly payments even more manageable, if needed.


Borrowers can consolidate student loans to lower and simplify monthly payments. Instead of multiple checks going to several agencies, one payment will be made to one organization. However, federal and alternative loans can not be consolidated together. Learn more about student loan consolidation.

Deferment and Forbearance

Borrowers unable to make payments due to unemployment or school obligations, in addition to other circumstances, are eligible for deferment or forbearance. These options allow the borrower to postpone payments for a specific period of time.

Forgiveness and Cancellation

In certain circumstances, borrowers can have the remaining portion of their loan eliminated through forgiveness or cancellation. Examples of eligible circumstances are Public Service Loan Forgiveness, Teacher Loan Forgiveness, and disability cancellation.

Default Avoidance

It is crucial for borrowers to make payments on time. Defaulting on a student loan will negatively impact the borrower's credit, making it difficult to get new loans going forward. Read our default avoidance section for more details.