Best Student Loan Repayment Plans

We have a lot of options for paying off student loans. But which one is best? The easiest way to decide is by comparing your options side-by-side using a loan calculator. You can also use our guide below to get an overview of the different types of repayment plans and see how each one stacks up.

Best Student Loan Repayment Plans

1 Public Service Loan Forgiveness (PSLF)

Public Service Loan Forgiveness (PSLF) is a program that forgives remaining federal student loan debt after 120 qualifying payments. You may also qualify for this program if you consolidate your eligible loans and make 120 on-time, full monthly payments within ten years of entering into an income-driven repayment plan. The PSLF program was created to encourage public servants to stay in their chosen career field by reducing the financial burden of student loans.

If you have federal student loans and qualify for this program, your monthly payment will not be higher than what it would be under another plan based on your income level and family size. Additionally, you must make all required payments while working full time at an eligible organization or agency—and those employers must provide a recommendation letter confirming your employment status as well as proof of employment at least annually during the 10-year repayment period (or for 120 payments).

2 Standard Repayment Plan

The Standard Repayment Plan is a repayment plan that requires the same amount of monthly payments over a period of up to 10 years. This repayment plan is best for those with lower incomes, as it allows for lower monthly payments. The Standard Repayment Plan can also be ideal for people who have higher incomes, as they may need less time to pay off their loans and this repayment plan will help them do so.

3 Graduated Repayment Plan

The Graduated Repayment Plan, also known as the income-contingent plan, bases your monthly payment on a percentage of your discretionary income. (Discretionary income is defined as your adjusted gross income minus 150% of the poverty guidelines for your family size.) Your repayment amount increases every two years until it reaches the standard repayment amount. The maximum term is 10 years.

The monthly payment on this plan is generally lower than what you would pay under a standard repayment plan because you’re paying back less each month and taking longer to pay off your loan in full (so you incur more interest).

4 Extended Repayment Plan

The Extended Repayment Plan is a popular option for those who wish to repay their loans over a longer period of time. Under this plan, your monthly payment amount will be fixed and not change over the life of your loan. However, if you have more than one student loan, you cannot choose this repayment plan for all of them; it’s only available if you have just one or two federal direct loans.

The most important thing about this plan is that its interest rate may be higher than some other options—but the good news is that the difference isn’t too drastic (usually around 1 percent). The bad news is that in order to keep things consistent throughout your repayment term, any capitalized interest will be added onto your principal balance rather than just being added on top of each monthly payment like most plans do.

If these two points don’t bother you much (or at all), then an extended repayment term might just be worth looking into!

5 Income-Based Repayment (IBR)

This plan is for people with low incomes and high federal student loan debt. If you have a high family income, too, IBR may still be an option. To qualify:

  • Your monthly payments will be capped at 15% of your discretionary income (defined as the amount by which your adjusted gross income exceeds 150% of the poverty guideline for your state).
  • You’ll pay on this plan for 25 years before any remaining debt is forgiven (this does not include interest that has accrued).

6 Pay As You Earn (PAYE)

The Pay As You Earn (PAYE) repayment plan offers a 20-year repayment period and 10% of discretionary income each month. If you have a subsidized loan, the government will pay your accruing interest while you make payments through this plan. After 120 qualifying monthly payments, the remaining balance on your student loans will be forgiven.

This repayment plan is best for borrowers who have trouble making their monthly payments under other plans because it allows them to pay as little as possible each month until they are ready to repay their debt in full. However, if you decide that you want to leave school before graduation or switch majors mid-way through college and aren’t able to complete 120 qualifying payments by the end of 20 years, then PAYE isn’t right for you.

7 Revised Pay As You Earn (REPAYE)

You can apply for REPAYE if:

  • You have federal Direct Loans, and
  • Your loans were disbursed on or after October 1, 2014.
  • You are a new borrower as of October 1, 1998, with at least one loan disbursed before that date. A borrower is considered new if they haven’t borrowed from the federal government since July 1, 2014.

REPAYE is based on your income and family size, so if you’re single with no kids and earn $40k/year then your monthly payment could be as low as $0 per month!

8 Income-Contingent Repayment (ICR)

Income-Contingent Repayment (ICR) is a flexible plan that can be used if you are not sure how much you will earn in the future. You can switch between plans if your income changes, making it easier to pay off your student loans quickly. If your income is low, then payments may be lower than other plans. However, this means that interest accumulates and increases over time, so ICR isn’t a good choice when interest rates are high.

9 We can help you choose the best student loan repayment plan.

We can help you choose the best student loan repayment plan.

Student loans are a big part of most people’s lives, so it’s important to understand how they work and how to manage them. One way that you can do this is by choosing the best student loan repayment plan for your situation. There are many different student loan repayment plans, so it’s important that you choose the one that works best for you and your family. You can change your student loan repayment plan if necessary as well!


We hope this guide has helped you understand the differences between various types of student loan repayment plans. We’re here to help, so if you have any questions about your loans or need more information about which plan is right for you and your situation, please contact us today!

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