Calculate Federal Student Loan Payment
If you’re a student with federal student loans, there are several options for repayment that can help you achieve financial freedom. In this article, we’ll discuss the different types of repayment plans and how they work.
Select the repayment plan that’s right for you.
You can change your repayment plan at any time. You can do this online, by calling the loan servicer or by mail.
- Online: Log in to the National Student Loan Data System and select “Repayment” from the menu bar on top of the page. Click on “Manage My Payments” and then choose “Payments & Repayment.” Choose the option that says “Plan Options.”
- By phone: Call 1-800-557-7392 (TTY 1-800-557-7395) Monday through Friday, 8 a.m.-8 p.m., EST; Saturday, 9 a.m.-5 p.m., EST; Sunday, CLOSED (except federal holidays).
- By mail: Follow instructions on your bill or loan notice for mailing address information
Standard Repayment – Amount is fixed at a minimum of $50 a month up to 10 years.
- The standard repayment plan is a 10-year fixed plan. The monthly payment amount is fixed at a minimum of $50 a month up to 10 years.
- You can also use the loan calculator on our website to see how much your monthly payments will be under this option and how long it would take you to pay off your student loans if you were making only the minimum payment each month.
- The interest rate for this option is 6.8%.
Graduated Repayment – Payments start off low and increase every two years over a 10-year period.
If you have a federal student loan, your payments can be structured in a few different ways. A common approach is graduated repayment, which starts at a low monthly rate and increases every two years over a 10-year period. Your payment amount will be fixed at a minimum of $50 per month up to 10 years.
Extended Repayment – Monthly bills are lower than the standard plan but repayment lasts 12 to 30 years.
The Extended Repayment plan is similar to the graduated repayment plan, except that monthly bills are lower than the standard plan but repayment lasts 12 to 30 years.
Payments are fixed and you’ll pay more over time. If you take out a $10,000 Stafford loan today with a 5% interest rate, your monthly payment will be $50 per month for 120 months (10 years). After 20 years, you’ve paid your total principal balance of $10,000 plus accrued interest of $2,500 ($1250) – this amount is called negative amortization.
Why choose an extended repayment plan? You’ll pay less in interest over time if payments are constant and increase at a slow rate when compared to other types of student loans such as federal PLUS loans or private student loans where variable rates can fluctuate up or down significantly from year-to-year depending on market conditions like inflation rates or unemployment levels globally among other factors which affect overall economic growth potentials here locally/nationwide/globally too!
Income-Based Repayment – Payments are capped at 15% of discretionary income and forgiveness may be available after 25 years (which can be shortened if you’re working in public service).
There are a few exceptions to the standard 10-year repayment plan.
- Income-based Repayment (IBR) – Payments are capped at 15% of discretionary income and forgiveness may be available after 25 years (which can be shortened if you’re working in public service).
- Pay As You Earn (PAYE) – Payments are capped at 10% of discretionary income and forgiveness may be available after 20 years (which can be shortened if you’re working in public service).
- Revised Pay As You Earn (REPAYE) – This repayment plan is similar to IBR and PAYE, except that payments are recalculated each year based on your updated financial information. If you make consistent payments, it’s possible for your monthly payment to be less than it would have been under other plans like IBR or PAYE.
Income-Contingent Repayment – Your monthly bill is based on your loan balance, income, family size and other factors. You’ll pay off the full balance in 25 years. Forgiveness is also an option if you work in public service.
Federal student loans offer an income-contingent repayment option, which makes your monthly bill calculated based on your loan balance, income and family size. You’ll pay off the full balance in 25 years with no interest charges if you work in public service.
For example, a borrower with $25,000 in loans and a starting salary of $50,000 who opts for this plan may have their payments capped at 10% of discretionary income (defined as adjusted gross income minus 150% of the poverty line). This person would begin with a payment of about $202 per month. If his/her salary increased to $75,000 after graduation, that same borrower’s payment might be as high as $535 per month when reducing his/her discretionary income by 200%.
Pay As You Earn (PAYE) – Payments are capped at 10% of discretionary income and forgiveness is available after 20 years (or 10 if you’re working in public service).
Pay As You Earn (PAYE) is an income-driven repayment plan that caps payments at 10% of discretionary income and forgiveness is available after 20 years (or 10 if you’re working in public service).
- The interest rate for this plan is the same as it was for IBR plans.
- Forgiveness on this plan is not available to those who work in public service jobs.
Student loan repayment options can help ease financial burdens.
You can use student loan repayment options to make your monthly payments more manageable.
To see if an income-driven repayment plan is a good option for you, consider your current income and family size. If you are working in a low-paying job or have minimal savings, an income-driven repayment plan may provide the most financial relief.
If you’re already on an income-driven plan such as Pay As You Earn (PAYE) or Revised Pay As You Earn (REPAYE), it’s important to know that switching plans will reset the remaining term of your loan and increase the amount of interest capitalized at each payment due date over time. Therefore, if possible, it might be better to stick with your current plan instead of switching to another one later on down the road. Learn more about these two plans below:
While student loans can be a great investment in your future, it’s important to understand how much money you owe and how you’re going to pay it back. The federal government offers several repayment options for borrowers with different kinds of debt, but it’s good to know what those are before applying just so you’re prepared when choosing one that suits your financial situation best.