Understanding the Student Loan Repayment Process
The Repayment Process
Repaying your student loan is an important responsibility. To help you manage repayment, we offer numerous resources and helpful information about managing your loan and exploring the repayment options available to you.
- Stay organized and keep copies of your loan documentation and forms.
- Communicate regularly with your loan servicer and update them when important changes happen. Also, contact them if you have trouble making payments.
- Keep a phone log and take notes, including who you talked to, the time of the call and what decisions were made, when speaking to someone about your loan.
- Research options to reduce the total amount of interest repaid.
- Consider your repayment options or consolidation to determine what's best for your situation.
- Know how much you owe by looking up your student loans on StudentAid.gov.
- Ask questions about your loans when you speak with your servicer.
- Set up automatic payments.
- Pay more than the minimum.
- Look into discharge and forgiveness.
- Make student loan payments a part of your personal budget.
Repayment Options
In most cases, students with federal student loans begin repaying them six months after they graduate, leave school, or drop below half-time enrollment. This initial period is referred to as a "grace period." A grace period gives you time to get financially settled and to select your repayment plan. During this time, payments are not required, but interest may continue to accrue on certain types of loans, such as Direct Unsubsidized Loans. PLUS loans, for example, typically go into repayment as soon as the funds are disbursed.
Paying off student loans is a significant financial obligation, and selecting the right repayment plan is crucial for managing this debt effectively. Your chosen repayment plan significantly affects your monthly payment amount, the total interest paid over the life of the loan and how quickly you can become debt-free. Visit StudentAid.gov to find a repayment option that works best for you.
WHICH PLAN IS BEST FOR ME?
Beginning July 1, 2026, federal student loan repayment options are changing, giving borrowers a simpler — but more limited — set of choices. Most existing income-driven repayment plans are being phased out and replaced by a new Repayment Assistance Plan (RAP), while the traditional Tiered Standard Plan will remain available. New borrowers will generally have just these two options, with RAP offering payments based on income and the Standard plan providing fixed monthly payments over time.
Students who entered repayment on their federal student loans prior to July 1, 2026, may be eligible for additional repayment plans not listed here. For more information, contact your loan servicer or visit StudentAid.gov.
Tiered Standard Plan
This plan represents a simplified approach to repayment, focusing on fixed payments and a clearly defined payoff timeline.
The monthly payment amount is calculated using two main factors:
- Your total loan balance
- Your interest rate
Because these payments are fixed, your monthly amount does not change over time, which can make it easier to budget and plan your finances after leaving college.
Repayment Timeline
The Tiered Standard Plan introduces variable repayment lengths based on how much you owe. The following information shows how repayment length corresponds to your overall loan balance.
| Up to $24,999 | 10 Years |
| $25,000-$49,999 | 15 Years |
| $50,000-$99,999 | 20 Years |
| $100,000 | 25 Years |
Because these payments are fixed, your monthly amount does not change over time, which can make it easier to budget and plan your finances after leaving college.
Not Based on Income
A key feature of the Tiered Standard Plan is that it is not income driven. This means:
- Your payment amount does not change based on your income
- It also does not adjust for family size or financial hardship
As a result, two borrowers with the same loan balance will have the same monthly payment, regardless of how much they earn.
Full Repayment Structure
The plan is designed to ensure that your student loan is completely paid off by the end of the repayment term. Over time, more of each payment goes toward reducing the principal balance. Because the loan is paid off within a defined timeframe, this plan is often one of the most straightforward paths to becoming debt-free.
No Built-In Forgiveness
The Tiered Standard Plan does not include automatic loan forgiveness after a certain number of years. However, borrowers may still qualify for forgiveness through Public Service Loan Forgiveness (PSLF). PSLF is a federal program that cancels the remaining balance on qualifying student loans after you work full-time in a public service job (like government or nonprofit work) and make 120 qualifying monthly payments. Find a list of qualifying public service organizations at StudentAid.gov.
Who This Plan May Work Best For
The Tiered Standard Plan is often a good fit for borrowers who:
- Can afford consistent monthly payments
- Want a clear payoff timeline
- Prefer to pay off their loans faster
- Want to minimize total interest paid over time
Repayment Assistance Plan (RAP)
The Repayment Assistance Plan (RAP) will introduce a streamlined approach to student loan repayment designed to simplify and better align monthly obligations with a borrower’s financial situation.
Payment Calculation
RAP calculates payments as a percentage of adjusted gross income, generally ranging from 1-10%, and adjusts for family size, making it more responsive to changes in income and dependents.
The plan also includes built-in protections to prevent loan balances from growing due to unpaid interest. Any interest not covered by a borrower’s monthly payment may be waived, helping keep balances from increasing over time.
Student Loan Forgiveness
RAP provides a long-term pathway to loan forgiveness with remaining loan balances forgiven after up to 30 years of qualifying payments. Public Service Loan Forgiveness (PSLF) may still be available for eligible borrowers after 10 years. Learn more about PSLF at StudentAid.gov.
Key Benefits
Here’s a clear, concise summary of the key benefits of the new RAP:
- Income-based payments: Monthly payments are calculated as a percentage of income, helping keep payments aligned with what borrowers can afford.
- Reduced impact of interest: Unpaid interest may be waived when payments don’t cover the full amount, preventing loan balances from growing over time.
- Minimum payment protection: Borrowers with very low income can make small, required payments (as low as $10), ensuring continued progress without overwhelming costs. RAP removes the possibility of $0 payments.
- Support for families: Payments can be adjusted based on family size, including reductions tied to dependents.
- Guaranteed progress on principal: The plan includes provisions to help ensure loan balances decrease over time, even when payments are low.
- Path to forgiveness: Remaining loan balances may be forgiven after up to 30 years of qualifying payments.
- Simplified repayment system: RAP replaces multiple income-driven plans with a single option, making repayment choices easier to understand and navigate.
Who This Plan May Work Best For
The Repayment Assistance Plan is often a good fit for borrowers who:
- Have low or limited income
- Experience fluctuating or unpredictable income
- Support a family or dependents
- Are concerned about growing loan balances
- Look for long-term flexibility or forgiveness options
Choosing the Right Plan
Before selecting a repayment plan, it's important to compare your options and understand how each one fits your financial situation and long-term goals. Different plans can affect your monthly payment amount, repayment timeline, and total interest paid over time. Taking the time to review all available plans can help you choose a strategy that balances affordability now with minimizing costs in the future. Visit StudentAid.gov to learn more about choosing the plan that works best for you. If you have questions, contact your loan servicer or reach out for support to get the guidance you need.
What if I can't make my payments?
If you’re struggling to make part or all of your student loan payment, contact your loan servicer as soon as possible to discuss your options.
You may want to consider a repayment option that would allow you to make smaller payments when you start repaying your loan and gradually increase the amount of your payment over time. If you can’t make a payment at all, you may want to understand your options.
- Deferment allows you to temporarily postpone or reduce your student loan payments for a specific period if you meet certain criteria. Eligibility for deferment is typically tied to specific circumstances, like being enrolled in school at least half-time, experiencing economic hardship or serving in the military. You generally need to apply for deferment with your loan servicer and provide documentation to prove your eligibility.
- Forbearance is a temporary relief option that allows borrowers to either pause their monthly payments or make smaller payments for a specified period of time. It's usually requested when a borrower is facing financial difficulties due to situations like job loss, medical expenses or changes in income.
- Forgiveness occurs when some or all of your student loan debt is canceled, so you no longer have to repay it after meeting certain requirements (like working in specific jobs or making payments over time). Review these student loan forgiveness programs:
- Teacher Loan Forgiveness
- Public Service Loan Forgiveness
- School-Related Discharge
- Total and Permanent Disability Discharge
- Military Service
- AmeriCorps
- Delinquent means you’ve missed a payment and are now behind on your loan. Delinquency starts as soon as a payment is late — even by one day — and continues until you catch up or make other arrangements. If it isn’t resolved, it can hurt your credit and eventually lead to default if payments continue to be missed.
- Default occurs when you fail to repay your student loan for an extended period — typically about 270 days (9 months) of missed payments for federal loans — meaning the loan is no longer in good standing and has serious consequences such as:
- Your wages can be garnished.
- You can lose your tax refund or Social Security check.
- Credit reporting companies are notified, which means a lower credit score.
- You will not be eligible for future financial aid.
Speak with your loan servicer about your options.