Debt Management Tips - Repaying Your Educational Loans

It is important to understand the variety of federal loan repayment options available to you. In some cases, these options can improve your ability to repay your education loans if you are having difficulty.

Check with your financial aid counselor, lender, or loan servicer for more information on your options. Listed below are some of the repayment options:

Standard Repayment

This option requires you to pay a set amount monthly (a minimum of $50 per month is required) for a maximum of 10 years. The amount you pay depends on your interest rate, number of payments, and total principal balance.

Payments are a fixed amount that ensures your loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).

Eligible Loan Types:

Direct Subsidized and Unsubsidized Loans
Subsidized and Unsubsidized Federal Stafford Loans
All PLUS loans (Direct or FFEL)
All Consolidation Loans (Direct or FFEL)

Graduated Repayment

Payments are lower at first and then increase, usually every two years. Payment amounts are designed to ensure your loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).

Eligible Loan Types:

Direct Subsidized and Unsubsidized Loans
Subsidized and Unsubsidized Federal Stafford Loans
All PLUS loans (Direct or FFEL)
All Consolidation Loans (Direct or FFEL)

Extended Repayment

To qualify for this plan, you must have more than $30,000 in outstanding Direct Loans (if you're a Direct Loan borrower) or more than $30,000 in outstanding FFEL Program loans. Payments can be fixed or graduated and will ensure that your loans are paid off within 25 years.

Eligible Loan Types:

Direct Subsidized and Unsubsidized Loans
Subsidized and Unsubsidized Federal Stafford Loans
All PLUS loans (Direct or FFEL)
All Consolidation Loans (Direct or FFEL)

Income-Driven Repayment (IDR) Plans

IDR plans base your monthly payment amount on how much money you make and your family size. After satisfying a certain number of months of qualifying payments on an IDR plan, you can get the remaining balance of your loan(s) forgiven. You must recertify with your loan servicer each year by providing them with updated income and family size information. There are currently four IDR plans available.

Saving on a Valuable Education (SAVE) Plan (formerly the REPAYE Plan)
This plan uses 10 percent of your discretionary income. The repayment period is 20 years if you only have undergraduate loans and 25 years if you have any graduate or professional loans.

Eligible Loan Types:

Direct Subsidized and Unsubsidized Loans
Direct PLUS Loans made to students
Direct Consolidation Loans that do not include PLUS loans (Direct or FFEL) made to parents

Pay As You Earn (PAYE) Repayment Plan
This plan uses 10 percent of discretionary income but never more than what you would pay under the 10-year Standard Repayment Plan. The repayment period is 20 years.

Eligible Loan Types:

Direct Subsidized and Unsubsidized Loans
Direct PLUS Loans made to students
Direct Consolidation Loans that do not include PLUS loans (Direct or FFEL) made to parents

Income-Based Repayment (IBR) Plan
This plan uses 10 or 15 percent of your discretionary income (depending on when you received your first loans) but never more than what you would pay under the 10-year Standard Repayment Plan.

Eligible Loan Types:

Direct Subsidized and Unsubsidized Loans
Subsidized and Unsubsidized Federal Stafford Loans
Direct and FFEL PLUS Loans made to students
Direct or FFEL Consolidation Loans that do not include PLUS loans (Direct or FFEL) made to parents

Income-Contingent Repayment (ICR) Plan
The payment amount would be the lesser of 20 percent of your discretionary income or the amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income.

Eligible Loan Types:

Direct Subsidized and Unsubsidized Loans
Direct PLUS Loans made to students
Direct Consolidation Loans (including those that repaid parent PLUS loans)

For more information on repayment plan options, visit studentaid.gov.

Loan Forgiveness

Loan forgiveness is the cancellation of all or part of your responsibility to repay your student loan. The two most common types are Public Service Loan Forgiveness and Teacher Loan Forgiveness. More information can be found on the studentaid.gov website.

Washington state residents seeking information and resources about student loan repayment or seeking to submit a complaint relating to their student loans or student loan servicer may visit https://www.wsac.wa.gov/loan-advocacy or contact the student loan advocate at loanadvocate@wsac.wa.gov