Loan Repayment

It's important to keep track of the lender, balance, and repayment status for each of your student loans.

A grace period is how long you can wait after leaving school before you have to make your first payment. For Federal Direct loans the grace period is six months.

Whenever you move or change your phone number or email address, tell your lender right away. If your lender needs to contact you and this information isn't current, it can end up costing you a bundle. Open and read every piece of mail – paper or electronic – you receive about your student loans.

When your federal loans come due, your loan payments will automatically be based on a standard 10-year repayment plan. If the standard payment is going to be hard for you to cover, there are other options, and you can change plans down the line if necessary. You may want to look into an income-based repayment plan which is capped out at a reasonable percentage of your income each year.

If you can afford to pay more than your required monthly payment – every time or now and then – you can lower the amount of interest you will pay over the life of the loan.

If you're having trouble making payments because of unemployment, health problems or other unexpected financial challenges, remember that you have options for managing your federal student loans. There are legitimate ways to temporarily postpone your federal loan payments, such as deferments and forbearance.

Use the online repayment calculator provided by the U.S. Department of Education.

Payments are a fixed amount that ensures your loans are paid within 10 years.

Payments are lower at first and then increase, usually every two years, and are for an amount that will ensure your loans are paid off within 10 years.

Payments may be fixed or graduated, but the term can be extended for up to 25 years. Direct loan borrowers must have more than $30,000 in loan debt.

Your monthly payments will be either 10 or 15 percent of your discretionary income (depending on when you received your first loans), but never more than you would have paid under the 10-year Standard Repayment Plan.  Payments are recalculated each year and are based on your updated income and family size.  Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 or 25 years, depending on when you received your first loans.  You may have to pay income tax on any loan amount that is forgiven.

Your maximum monthly payments will be 10 percent of discretionary income, which is the difference between your adjusted gross income and 150 percent of the poverty guideline for your family size and state of residence. The term can be up to 20 years and your payments will change as your income changes. If you have not repaid your loan in full after you made the equivalent of 20 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven. You may have to pay income tax on any loan amount that is forgiven.

Payments are calculated each year and are based on your income, family size, and the total amount of your direct loans. Your monthly payments will be the lesser of 20 percent of discretionary income or the amount paid on a repayment plan with a fixed payment over 12 years, adjusted according to income.  If you do not repay your loan after making the equivalent of 25 years of qualifying monthly payments, the unpaid portion will be forgiven. You may have to pay income tax on the loan amount that is forgiven.

Your monthly payment is based on your annual income, but your loan will be paid in full within 15 years.