Federal Stafford Loan Repayment Options

Are you thinking about how you are going to pay for your education and considering a loan? Already have a federal Stafford loan and wondering about your repayment options for federal student loan repayment? There are a variety of Stafford Loan repayment options you can take advantage of.

Starting Repayment

Stafford Loan Exit Counseling

Before you enter repayment, your school and the federal government require that you complete an exit counseling session. Failing to complete your exit counseling session could prevent you from graduating, receiving your diploma, obtaining your transcripts to attend another school, and receiving any student account refunds owed to you from your school.

Repayment Plans

Federal loan borrowers can choose from a variety of repayment plans when it comes time to pay student loans. To select or change plans, you must contact your federal student loan servicer. Your servicer’s contact information can be found at NSLDS.ed.gov.

Plans	Features	Considerations
Standard Repayment	10 year term or less Minimum $50 monthly payment	Accrue less interest under this plan than longer-term plans Not compatible with loan forgiveness Higher monthly payment than other plans
Graduated Repayment	10 year term or less Low payments first 2 years, increases in 2-year increments	Accrues more interest than standard plan Not compatible with loan forgiveness
Extended Repayment	25 year term or less Graduated or fixed monthly payment Must have at least $30,000 in Direct Loan or FFEL debt	Accrues more interest than 10-year plans Lower monthly payments than standard or graduated plans Compatible with forgiveness programs
Pay As You Earn Repayment	20 year term or less Payments capped at 10% of discretionary income (not total income) Must have a partial financial hardship Only available to borrowers with a Direct Loan disbursement after 10/1/11	Accrues more interest than 10-year plans Remaining loan balance is forgiven after 20 years (but would be subject to taxes) Lower monthly payment than 10-year plans
Income-Based Repayment	25 year term or less Payments capped at 15% of discretionary income (not total income) Must have a partial financial hardship	Accrues more interest than 10-year plans Remaining loan balance is forgiven after 25 years of qualifying payments Lower monthly payment than 10-year plans
Income Contingent Repayment	25 year term or less Payments calculated by AGI, family size, and total federal direct loan debt	Accrues more interest than 10-year plans Lower monthly payment than 10-year plans Remaining loan balance is forgiven after 25 years of qualifying payments
Income Sensitive Repayment	Only available for FFEL Loans 10 year term or less Monthly payments based on income	Accrues more interest than 10-year plans Lower monthly payment than 10-year plans Remaining loan balance is forgiven after 25 years of qualifying payments

Federal Loan Consolidation

A consolidation loan allows you to combine all of your previously borrowed federal loans into one low monthly payment. This can reduce the monthly payments you make by as much as 53% by lengthening the overall term of the loan.

»Learn more about Stafford Loan consolidation

Federal Stafford Loan Forgiveness

Under certain circumstances, the federal government will forgive (cancel) all or part of an educational loan. In order to qualify for federal student loan forgiveness, you must:

Perform military service
Perform volunteer work
Teach or practice medicine in certain types of communities
Be involved in circumstances specified by your loan's forgiveness plan

»Learn more about Stafford Loan forgiveness

Stafford Loan and Discharge Options

Federal loan forgiveness is not available to everyone, but there are other options. Certain volunteer programs or fields like healthcare also offer some loan forgiveness/repayment incentives.

»Learn more about other forgiveness/repayment options

In extreme cases, you may even qualify to have your Stafford Loans discharged. This can happen due to various circumstances like disability or bankruptcy.

»Learn more about Stafford Loan discharge

Federal Stafford Loan Deferment and Forbearance

Loan deferment refers to a temporary period when a borrower is not required to make payments for an eligible reason. For Subsidized Stafford Loans, the interest that accrues on the loan during the deferment is paid by the federal government. For Unsubsidized Stafford Loans, the interest that accrues during a deferment must be paid by the borrower during or after the deferment period.

Stafford Loan forbearance allows borrowers to temporarily postpone or reduce payments for a period of time. This typically takes place because the borrower is experiencing financial difficulty. Both deferment and forbearance are good loan management tools and can help borrowers avoid default.

»Learn more about Stafford Loan deferment and forbearance

by Alex Brightyear