Repayment Strategy

Whether you are in school, in grace, or in repayment, creating a repayment strategy is a great way to efficiently tackle paying off your student loans. A repayment strategy is establishing a repayment plan and identifying any additional actions you may need to take to meet your repayment goals.

What to do before you create a repayment strategy!

Before creating a repayment strategy you should know your loan details, specifically current loan balances, loan program and interest rate of each loan, and how may months you have been repaying your loan.

Knowing this information can help you determine the best repayment options for your situation.

Back to Repayment Strategy

Build Your Strategy

Unlike most other kinds of debt, student loans offer a variety of repayment plans. Understanding what your repayment goals are can help you narrow down your choices and pick a plan that meets your needs.

Select a Repayment Goal

Find the goal that best fits your situation to view supporting repayment plans:

Select a Goal Above to Get Started.

Select a goal to view strategies and repayment plan options that support your goal.

Quickest Payoff Strategy Recommendations

You can easily afford your monthly payment and would benefit most by paying your loans down as fast as possible.

Plan Possibilities

Standard Repayment is considered the fastest and most cost-effective repayment plan, which is why your loan begins repayment on this plan if you do not select a different repayment plan. This is just one of the plans you can choose to help you achieve this goal.

Strategy Support
  • Pay with Direct Debit to reduce your interest rate by 0.25%!
  • Pay Ahead to help decrease your principal balance and overall interest paid.
  • Pay Interest before you enter repayment to help decrease the overall amount you will pay over the life of your loan!

Learn more about how to make your payments count.

Payments Driven by Your Income Strategy Recommendations

You have little to no income, mounds of student loan debt, or you're worried about the affordability of your monthly payments.

Plan Possibilities

Income-Driven Repayment (IDR) plans allow your monthly payment to be based on your income and family size. If your student loans are eligible, you may even qualify for a monthly payment as low as $0, depending on your situation.

Strategy Support
  • Pay with Direct Debit to have payments withdrawn from your bank account each month, and automatically adjusts with changes in your repayment plan!
  • Pay Interest before you enter repayment to help decrease the overall amount you will pay over the life of your loan!
  • Consolidate to open up your repayment plan and forgiveness opportunities.

Learn more about how to make your payments count.

Lowest Monthly Payment Strategy Recommendations

You are looking for a payment amount that will fit better into your current budget.

Plan Possibilities

We have several plans that may offer a lower monthly payment. Some plans extend your repayment term, while others, like Income-Based Repayment, take your income into consideration.

Strategy Support
  • Target Extra Funds to specific loans to make the most of additional payments on your account.
  • Consolidate your loans to open up your repayment plan opportunities, including the potential for a lower monthly payment.
  • Pay with Direct Debit to reduce your interest rate by 0.25%!

Learn more about how to make your payments count.

Pay as Little as Possible Over the Life of Your Loans Strategy Recommendations

You can easily afford your monthly payments, and want to learn about additional ways to save money on your loans.

Plan Possibilities

If you want to pay as little as possible over the life of your loans, the Standard Repayment plan may be your best option. This plan has the shortest term and the payments remain relatively the same throughout repayment.

Strategy Support
  • Pay Ahead to help decrease your principal balance and overall interest paid.
  • Pay with Direct Debit to reduce your interest rate by 0.25%!
  • Target Extra Funds to specific loans to make the most of additional payments on your account.

Learn more about how to make your payments count.

Lower Payments Now that Increase Over Time Strategy Recommendations

You may be able to afford higher payments in the future, but a smaller monthly payment would be helpful for now.

Plan Possibilities

There are a few repayment plans that provide a payment amount that increases over time.

Strategy Support
  • Pay with Direct Debit, which automatically adjusts as your monthly payment changes. Additionally, paying through Direct Debit reduces your interest rate by 0.25%!
  • Target Extra Funds to specific loans to make the most of any additional payments you are able to pay on your account.
  • Pay Ahead to help decrease your principal balance and overall interest paid.

Learn more about how to make your payments count.

Work Toward Public Service Loan Forgiveness Strategy Recommendations

You work in or plan to begin a career in public service and are interested in loan forgiveness opportunities.

Plan Possibilities

In order to benefit from the Public Service Loan Forgiveness (PSLF) program, it is important that your loans are on one of the four most valuable repayment plans available for PSLF.

Strategy Support
  • Pay with Direct Debit to ensure your payments are made on time every month. Additionally, paying through Direct Debit reduces your interest rate by 0.25%!
  • We do not recommend that you Pay Ahead if you wish to receive the most benefit from the PSLF program.
  • Consolidate any of your federal loans that were not disbursed through the Direct Loan program. Only Direct Loans are eligible for the PSLF program.

Learn more about how to make your payments count.

Learn more about PSLF.

Choose a Repayment Plan

Select a plan to view details such as features, eligibility, payment estimates, and how to apply.

Standard Repayment
10 years
Standard Repayment
Plan Features
  • Quickest payoff.
  • Fixed monthly payments.
Payments and Term
  • The minimum monthly payment under this plan is $50 per loan program.
    • For example: The minimum monthly payment for all of your loans within the Federal Direct Loan Program is $50. If you also borrowed loans from the Federal Family Education Loan (FFEL) Program, they will also have a $50 minimum payment.
  • Payments of principal and interest remain relatively the same throughout repayment.
  • Maximum repayment term of 10 years for unconsolidated loans, and up to 30 years for consolidated loans.
Other Important Information

Changes may occur to your monthly payment during your repayment period for a few reasons, such as when interest capitalizes.

Pay As You Earn Repayment
20 years
Pay As You Earn (PAYE)
Plan Features
  • Monthly payments as low as $0 per month.
  • Payment amounts based on your income and family size.
  • Extended repayment period.
  • Offers loan forgiveness after 20 years of qualifying payments.
Payments and Term
  • Reduced monthly payments are calculated using your and family size.
  • Payments are generally 10% of your income.
  • Payments are made for up to 20 years.
Other Important Information
  • If you're married and file a joint federal income tax return, your spouse's eligible student loan debt and adjusted gross income are also considered (unless you are separated or unable to obtain your spouse's income information).
  • Since the information used to calculate your payment may change from year-to-year, you must re-apply annually for Pay As You Earn.
Revised Pay As You Earn Repayment
25 years
Revised Pay As You Earn (REPAYE)
Plan Features
  • Monthly payments as low as $0 per month.
  • Payment amounts based on your household income (with spouse, if applicable) and family size.
  • Extended repayment period.
  • Offers loan forgiveness after 20 years of qualifying payments (25 years for borrowers with Direct Loans obtained for graduate and professional study).
Payments and Term
  • Reduced monthly payments are calculated using your (with your spouse, if applicable).
  • Payments are generally 10% of your income.
  • Payments are made for up to 20 years (25 years for borrowers with Direct Loans obtained for graduate and professional study).
Other Important Information
  • You must provide income documentation for yourself and your spouse regardless of whether you file your taxes jointly or separately (unless you file separately because you are separated or unable to obtain your spouse's income information).
  • Since the information used to calculate your payment may change from year-to-year, you must re-apply annually for Revised Pay As You Earn.
Income-Based Repayment
20-25 years
Income-Based Repayment
Plan Features
  • Monthly payments as low as $0 per month.
  • Payment amounts based on your income and family size.
  • Extended repayment period.
  • Offers loan forgiveness after 25 years of qualifying payments (20 years for new borrowers*).
Payments and Term
  • Reduced monthly payments are calculated using your and family size.
  • Payments are generally 15% of your discretionary income (10% for new borrowers*).
  • Payments are made for up to 25 years.
Other Important Information
  • If you're married and file a joint federal income tax return, your spouse's eligible student loan debt and adjusted gross income are also considered (unless you are separated or unable to obtain your spouse's income information).
  • Since the information used to calculate your payment may change from year-to-year, you must re-apply annually for Income-Based Repayment.

*A new borrower for the IBR plan has no outstanding balance on a Direct or Loan as of July 1, 2014, or has no outstanding balance on a Direct or Loan when he or she obtains a new loan on/after July 1, 2014.

Income-Contingent Repayment
25 years
Income-Contingent Repayment
Plan Features
  • Monthly payments as low as $0 per month.
  • Payment amounts based on your income, family size, and loan debt.
  • Extended repayment period.
  • Offers loan forgiveness after 25 years of qualifying payments.
Payments and Term
  • Reduced monthly payments are calculated using your , family size, and total amount of eligible loan debt.
  • Payments are generally adjusted based on your income using the lesser of:
    1. 20% of your discretionary income
    2. The amount you would pay under a fixed repayment plan over 12 years.
  • Payments are made for up to 25 years.
Other Important Information
  • If you're married and file a joint federal income tax return, your spouse's adjusted gross income is also considered (unless you are separated or unable to obtain your spouse's income information).
  • Since the information used to calculate your payment may change from year-to-year, you must re-apply annually for Income-Contingent Repayment.
Graduated Repayment
10 years
Graduated Repayment
Plan Features
  • Quickest payoff.
  • Lower monthly payments that increase over time.
Payments and Term
  • Monthly payments initially satisfy interest-only.
  • Payments begin lower and increase every 2 years throughout the repayment period.
  • Maximum repayment term of 10 years for unconsolidated loans, and up to 30 years for consolidated loans.
Other Important Information
  • You will pay more over the life of your loan than on the 10-year Standard Repayment plan.
  • Payments increase every 24 months until the loan is paid in full.
Extended Standard Repayment
25 years
Extended Standard Repayment
Plan Features
  • Extended repayment period.
  • Fixed monthly payments.
  • Lower monthly payment than the 10-year Standard Repayment plan.
Payments and Term
  • Monthly payments are generally lower because the repayment period is extended.
  • Maximum repayment term up to 25 years.
Other Important Information
  • In order to qualify, you must have more than $30,000 in outstanding Direct Loans or Loans.
    • For example: If you have $32,000 in outstanding Direct Loans and $12,000 in outstanding FFEL Program Loans, you may be able to choose this plan for your Direct Loans; however, your FFEL Program Loans would not be eligible.
  • Changes may occur to your monthly payment during your repayment period for a few reasons, such as when interest capitalizes. You will pay more over the life of your loan than under the 10-year Standard Repayment plan.
Extended Graduated Repayment
25 years
Extended Graduated Repayment
Plan Features
  • Extended repayment period.
  • Lower monthly payments that increase over time.
Payments and Term
  • Monthly payments are generally lower and increase later in repayment.
  • Maximum repayment term up to 25 years.
Other Important Information
  • In order to qualify, you must have more than $30,000 in outstanding Direct Loans or Loans.
    • For example: If you have $32,000 in outstanding Direct Loans and $12,000 in outstanding FFEL Program Loans, you may be able to choose this plan for your Direct Loans; however, your FFEL Program Loans would not be eligible.
  • You will pay more over the life of your loan than on the 10-year Standard Repayment, 10-year Graduated Repayment, or 25-year Extended Standard Repayment plan.
  • Payments increase every 24 months until the loan is paid in full.
Income Sensitive Repayment
15 years
Income Sensitive Repayment
Plan Features
  • Extended repayment period.
  • Lower monthly payments.
Payments and Term
  • Monthly payments are based on your monthly gross income.
  • Payments must at least cover the interest that accrues every month.
  • Repayment term may be extended by up to 5 years.
Other Important Information
  • Only loans that were disbursed in the FFEL Program Loans are eligible for this repayment plan.
  • Since the information used to calculate your payment may change from year-to-year, you must re-apply annually for Income-Sensitive Repayment.
IDR = Income-Driven Repayment Plan
Make payments while you're in-school or during your grace period to help decrease the amount you will pay over the life of your loan!
Back to Repayment Strategy

Support your Strategy

Knowing what options are available is the best way to make your payments count. Below you will find recommendations to help support your repayment strategy.

Pay Ahead

To pay ahead, you must pay more than what you are billed. When you do this, your account will be placed in a "paid ahead status" (unless you request otherwise) which means you may receive a bill that reflects a lower monthly installment amount or even $0 due. Even if you are paid ahead, continue to pay at least your regular monthly installment amount each month if you can afford to. Doing this may allow you to pay your loans off faster or decrease the total amount you will pay over the life of your loans.

NOTE: If you wish to benefit from the Public Service Loan Forgiveness (PSLF) program, you may not want to pay ahead. If you pay ahead, you may prevent payments from qualifying and reduce the balance available for forgiveness.

Learn More!

Target Extra Funds

Target extra funds to loans with higher interest rates to reduce the amount of interest you will pay over the life of the loans.

When you pay more than what you are billed, you can specify how the additional funds are applied on your account. If you would like to pay as little as possible over the life of your loans or pay your loans off as quickly as possible, you should target any extra funds you are able to pay toward your highest interest rate loans.

Learn More!

Pay Interest

If you are able to pay interest on your unsubsidized loans while you are in-school or in grace, this will reduce the amount of interest that capitalizes when your loan enters repayment. When interest is capitalized, it increases your principal balance and may increase your monthly payment. Additionally, if you pay interest during periods you are not being billed, it will help you achieve your goal of a lower monthly payment or achieving a quick payoff. Another benefit is that it may save you money over the life of the loan.

NOTE: Depending on the type of loan and how you postpone your payments, interest may continue to accrue during these periods and unpaid interest will capitalize (be added to your current principal balance) when your account status changes.

Learn More!

Consolidate

Consolidate to combine one or more existing student loans into a single new loan. A Federal Direct Consolidation Loan may be a good option if you wish to:

  • Extend your repayment period up to 30 years for the potential of a lower monthly payment amount, but understand that this may increase the total amount you will pay over the life of the loan.
  • Lock into a fixed interest rate, which is calculated based on the weighted average of the interest rates on your loans you are consolidating.
  • Make your federal loans that are currently ineligible for Public Service Loan Forgiveness (PSLF)* qualify.

NOTE: If you have already made payments toward PSLF on your Direct Loans, please contact us before you submit an application to consolidate your loans. If your application to consolidate includes Direct Loans, your payment counter for PSLF will restart. As a result, any payments you previously made toward your Direct Loans will be no longer count toward the PSLF program.

Learn More!

To see if this option is right for you, take our Consolidation Quiz.

Direct Debit

Direct Debit sets up an electronic deduction from your checking or savings account on your due date each month.

When your account is paid through Direct Debit, you qualify for a 0.25% interest rate reduction. This helps you lower your daily interest accrual and supports your goal to pay as little as possible over the life of the loan!

Learn More!