Federal Student Loan Repayment

Your federal loans have a standard 10-year repayment schedule. However, there are provisions allowing you to extend your repayment for up to 30 years, depending on the overall amount you borrow. Extending the length of your repayment will lower your monthly payment, but it will also increase the overall cost of the loan as interest will accrue over a longer period.

The date of your first payment will depend on your chosen federal loan program:

  • Federal Direct Loans and Federal Direct Grad PLUS Loans begin repayment six months after you graduate or are no longer enrolled at least half-time.

  • Health Professions Loans and Nursing Student Loans begin repayment nine months after you graduate or are no longer enrolled at least half-time.

  • Consolidated loans begin repayment the month after you complete the consolidation.

You can choose different repayment schedules depending on your anticipated needs. You may want to use the information outlined below in conjunction with the loan repayment calculator to determine which repayment schedule is in your best interest.

  • Standard – Fixed monthly payments for up to 10 years with a $50 minimum monthly payment.

  • Extended – Fixed monthly payments up to 30 years, depending on amount borrowed. This reduces your monthly payment, but increases interest paid and the overall amount repaid over the life of the loan.

  • Graduated – Lower monthly payments for the first two years with payments increasing over time, for up to 30 years. This is based on the assumption that your ability to replay increases as your earnings increase.

  • Income-Based – Monthly payments are based on the borrower’s income, family size, and total amount borrowed. Payments are adjusted each year for up to 25 years, and any remaining loan amount after 25 years is discharged as a taxable event. This option is best for students pursing public service careers and those with high debt and low income.

  • Income-Sensitive – Monthly payments are based on a percentage (4% to 25%) of the borrower’s income and must be greater than accrued interest. Borrowers must reapply annually and are limited to 10-year repayment schedule.

If you are struggling to pay your student loans, most lenders offer deferment and forbearance periods. You should explore deferment first, as it contains more favorable terms for subsidized loans.

  • Deferment – Granted by lender for periods of continued enrollment or other special circumstances as defined by lender. This postpones repayment for up to 12 months. Subsidized loans will continue to cover interest during this time, but interest will accrue for unsubsidized loans. Your lender may have specific eligibility criteria.

  • Forbearance – Granted by lender for extreme financial hardship or in certain instances when deferment isn’t available. This postpones repayment for up to 12 months. Interest continues to accrue even on subsidized loans. Your lender may have specific eligibility criteria.

You are responsible for repaying your student loans, and it is very important that you communicate directly with your loan servicer if you are struggling to pay them back. If you do not make any payments on your federal student loans for 270-360 days and do not make special arrangements with your lender for deferment or forbearance, your loans will be in default and may be turned over to a collection agency.

You can read more about default on the FinAid website.