3 ways to repay student loans

Repaying federal student loans may never be stress-free, but you can choose from a number of repayment plans meant to suit different financial situations. Depending on the size of your loan, you could be expected to pay hundreds or even thousands each month. So before you pick a plan, tally your expenses and figure out how much money you’ll be able to put toward repayment each month.

Plan options

1Standard

The default option for federal student loans, this plan is designed so borrowers are debt-free in a decade or less.

2Income-driven

If you can't afford standard repayment, you may qualify for an income-driven repayment plan. Payment amounts are based on your income level and family size.

3Extended

This plan is designed for people with large loan balances; you must have at least $30,000 in outstanding federal student loan debt to use it.

Monthly Payments

Monthly payments

1Standard

A fixed amount of $50 or more.

2Income-driven

ten to twenty percent of discretionary income.

3Extended

Either a fixed amount or graduated, where payments are lower at first and gradually increase.

Repayment Some Period

Repayment period

1Standard

Up to 0Footnote * years

Up to ten years

*If you combine multiple loans, this can increase to 30 years.

2Income-driven

twenty to twenty-five years

3Extended

up to twenty-five years
Advantages

Advantages

1Standard

Paying off your loan in a shorter time frame generally means you'll pay less interest overall.

2Income-driven

Lower monthly payments let you use more of your income. You may qualify for loan forgiveness at the end of your term if you meet certain criteria.

3Extended

This plan helps people who may have a reasonable income but are struggling with high monthly payments due to a large balance.

Disadvantages

Disadvantages

1Standard

Monthly payments will generally be higher, leaving you with less money for current expenses and other financial goals.

2Income-driven

A longer term means you could end up paying more overall. If you end up meeting the criteria for loan forgiveness, you may have to pay income tax on the amount forgiven.

3Extended

As with the income driven plan, the extended time frame means you may pay more interest in the long term.

Remember

Even if you select, or are assigned, a certain plan at the start of your repayment, you can change it at any time by talking with your loan servicer. Just be sure to make any decision carefully, as these choices can have a big impact on your financial life.

Close Disclaimer
The material provided on this website is for informational use only and is not intended for financial or investment advice. Bank of America and/or its affiliates, and Khan Academy, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment options.

Up Next

Contact Us

  • Mon-Fri 8 a.m. to midnight Eastern Sat 8 a.m.-8 p.m. Eastern, Sun 9 a.m.-8 p.m. Eastern
    866.736.2205
  • Schedule an appointment