Federal Loan Repayment Plans
There are a number of different plans available to for post-graduation federal loan repayment. Additional information, loan eligibility, and online calculators to determine the best repayment plan for you can be found through the U.S. Department of Education’s Federal Student Aid website. The Humphrey School Office of Admission cannot endorse any one program, but encourages all students and graduates to learn more about all of the options available and possibly contact a financial adviser.
Standard Repayment Plan
Fixed payments that may be slightly higher than payments made under other plans, but repayment is completed in a shorter amount of time with the least amount of interest paid over the life of the loan. (Time frame for repayment: up to 10 years) Learn about the Standard Repayment Plan
Income-Based Repayment Plan (IBR)
To qualify for IBR, you must have a partial financial hardship2. Your monthly payment amount is tied to a percentage of your income and family size (approximately 15% of discretionary income). The payment amount may increase or decrease each year based on changes to your income or family size. After you have initially qualified for IBR, you may continue to make payments under the plan even if you no longer have a partial financial hardship. If you have not repaid your loan in full after making the equivalent of 25 years of qualifying on-time monthly payments, any outstanding balance on your loan will be forgiven. (Time frame for repayment: up to 25 years) Learn about the Income-Based Repayment Plan (IBR)
Income-Contingent Repayment (ICR)
Similar to IBR, but payments are based on adjusted gross income, family size, and total amount borrowed. The monthly payment is adjusted annually, based on changes in annual income and family size. (Time frame for repayment: up to 25 years) Learn about the Income-Contingent Repayment Plan (ICR)
Pay As You Earn (PAYE)
Your maximum monthly payments will be 10% of discretionary income3. You must be a new borrower on or after October 1, 2007, and must have received a disbursement of a Direct Loan on or after October 1, 2011. (Time frame for repayment: up to 20 years) Learn about the Pay As You Earn Plan (PAYE)
Consolidate Your Loans
If you have multiple federal student loans, you can consolidate them into a single Direct Consolidation Loan. This may simplify repayment if you are currently making separate loan payments to different loan holders or services, as you’ll only have one monthly payment to make. There may be tradeoffs, however, so you’ll want to consider the advantages and possible disadvantages of consolidation beforehand. Learn about consolidating your loans
You are required to repay your loans along with any interest and fees that are assessed according to the terms of the promissory note and repayment schedule. Full repayment is required even if you don’t complete your program of study, don’t complete the program within the regular completion time for that program, don’t obtain employment (or desired employment) upon completion of your degree, are dissatisfied with the education or other services you received from your school, or don’t receive a monthly billing statement from your loan servicer.
2 You have a partial financial hardship if the monthly amount you would be required to pay on your IBR-eligible federal student loan under a ten-year Standard Repayment Plan is higher than the monthly amount you would be required to repay under IBR.
3 Discretionary income is the difference between your adjusted gross income and 150% of the poverty guideline for your family size and state of residence (other conditions apply).