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3 repayment options for federal student loans

Federal student loans can fund some of your biggest educational goals. But when the time comes to pay back what you owe, the options can be overwhelming. Understanding your repayment plan choices can help you reduce stress and save money..

Below is information on three repayment plan options to help you pick the one that suits your personal situation and financial needs.

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Option 1: Standard Plan

This is the default plan if you don’t choose one of the other options. It is designed so borrowers can be debt-free in a decade or less.

Monthly Payments

A fixed amount of $50 or more.

Repayment Period

10 years or less. However, if you combine multiple loans, this can increase to up to 30 years.


Shorter repayment period means you’re likely to pay less in interest overall.


Higher monthly payments could strain your budget.

Option 2: Income-driven Plan

If you can’t afford the standard option, you may qualify for a plan based on your income and family size.

Monthly Payments

10% to 20% of discretionary income.

Repayment Period

20 to 25 years.


Lower payments free up more income for essentials. If you meet specific criteria, you may eventually qualify for loan forgiveness.


The longer repayment period means you could spend more money overall. If you qualify for loan forgiveness, you may owe income tax on the amount forgiven.

Option 3: Extended Plan

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

Monthly Payments

Either a fixed amount or graduated, where payments increase over time.

Repayment Period

Up to 25 years.


This plan helps people who struggle with high monthly payments due to a large balance.


The extended time frame means you may pay more interest in the long term.


You can change your repayment plan at any time by talking with your loan servicer. Carefully consider your options, though, as your choices can have a significant impact on your finances.

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The material provided on this website is for informational use only and is not intended for financial or investment advice. Bank of America Corporation and/or its affiliates 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 management. ©2024 Bank of America Corporation.

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