Key Takeaways:
- Borrowed federal student loans before July 1, 2026? You may remain in Income-Based Repayment (IBR) or transition from older repayment plans.
- Planning to borrow federal student loans after July 1, 2026? You’ll have the option to choose between the Standard Repayment Plan or Repayment Assistance Plan (RAP) when it comes time to repay your loans.
- Older federal student loan repayment plans – SAVE, PAYE, and ICR plans – are being phased out.
- Private student loans remain unchanged under new federal laws. Each private lender offers their own repayment options and terms. These often cannot change once selected.
When it’s time to repay your student loans, you might wonder what student loan repayment options are available. The answer is that it depends on whether your loans are federal or private student loans.
There are several ways to repay your federal student loans. Most student loan repayment options are designed to work with your income and budget. Since both can change over time, you have the option to change your federal student loan repayment plan if needed to accommodate those very changes.
Private student loans also have various repayment options, and those can vary from lender to lender. It’s a good idea to understand your repayment options before agreeing to any loan to ensure you’re comfortable with your commitment as there’s typically little to no flexibility to change repayment plans once the loan is secured.
Federal Student Loan Standard Repayment Plans
Federal student loans have set repayment plan options. Depending on your loan type and when you borrowed, you may be eligible for more than one of these plans. If you have questions, it’s best to reach out to your student loan servicer to discuss and weigh your options.
Standard Repayment Plan
This is the simplest and most common federal student loan repayment option. Your loan will likely be placed on the Standard Repayment Plan unless you select or choose a different plan once you begin repayment. With the federal student loan Standard Repayment Plan, you pay a fixed monthly payment over 10 years. An exception to the 10-year period is a Federal Consolidation Loan. Consolidation Loans combine one or more federal loans into a new student loan, which can extend the time allowed to pay it off to as many as 30 years.
The quicker you pay off your student loan, the less it costs in interest, so committing to a 10-year repayment plan has advantages over a longer-term plan. Under the Standard Repayment Plan, you’ll pay a higher amount per month (at least $50) than with other options, which also helps reduce the overall cost of your loan.
The following federal student loans are eligible for this plan:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS Loans
- Consolidation Loans (Direct or FFEL)
Standard Repayment Plans offer predictable monthly payments that can help you budget and plan for the future. You can also potentially incur less interest if you pay off your loan faster.
Graduated Repayment Plan (Ending in 2026 for New Borrowers)
Not everyone can commit to higher monthly loan payments right out of school. If you’re looking to start with a lower monthly bill, the Graduated Repayment Plan enables you to do so. Your monthly installment increases over time (about every two years), which is intended to keep pace with your growing salary.
Like the Standard Repayment Plan, the Graduated Repayment Plan is designed to help you pay off your federal student loan within 10 years. Because you’re not paying as much upfront, you will pay more in interest under this plan than you would with the Standard Repayment Plan.
The following federal student loans are eligible for this plan:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS loans
- Consolidation Loans (Direct or FFEL)
Like the Standard Repayment Plan, the Graduated Repayment Plan allows up to 30 years to pay off a Consolidation Loan.
Important Note: Graduated Repayment Plans will be phased out for new borrowers after July 1, 2026, according to legislation passed by Congress in July 2025 (also known as the “One Big Beautiful Bill”). Current borrowers may remain enrolled, but this will not be an option for new federal student loan borrowers on a go-forward basis.
Extended Repayment Plan (Ending in 2026 for New Borrowers)
If you have more than $30,000 in outstanding Direct Loans, you may elect the Extended Repayment Plan. This option is a good fit for those who need more than 10 years to pay off a federal student loan and would like lower monthly payments.
The Extended Repayment Plan allows up to 25 years to pay off your loan, during which your monthly installments may be fixed (unchanging for the life of your loan) or graduated (increasing over time). Extending the time to pay off your loans also means you’ll be paying more overall.
The following federal student loans are eligible for this plan:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS Loans
- Consolidation Loans (Direct or FFEL)
Important Note: Extended Repayment Plans will also be phased out for new borrowers after July 1, 2026, according to legislation passed by Congress in July 2025 (also known as the “One Big Beautiful Bill”). Current borrowers may remain enrolled, but this will not be an option for new federal student loan borrowers on a go-forward basis.
Income-Driven Federal Student Loan Repayment Plans
Just as the name indicates, income-driven repayment plans use your income to determine what you must pay each month and for how long.
To qualify for an income-driven repayment (IDR) plan, the amount you owe must be high relative to your annual income. You are also required to report your income and family size every year, even if there is no change.
Most income-based repayment plans include some form of loan forgiveness. This means after a set amount of time of 20 or 25 years; any unpaid debt is forgiven. Keep in mind you might still owe taxes on that forgiven amount.
These plans have significantly changed under the “One Big Beautiful Bill”. Several older plans are being retired and replaced with simpler, more streamlined options.
Federal Repayment Plans Being Phased Out
The following plans will no longer be available for new borrowers after July 1, 2026, and will sunset for most existing borrowers by July 1, 2028:
- Saving on a Valuable Education (SAVE) Plan
- Pay as you earn (PAYE) Plan
- Income-Contingent Repayment (ICR) Plan
If you’re currently enrolled in one of these, your federal student loan servicer will guide you through the transition process for selecting and moving to a new plan.
Income-Based Repayment (IBR) Plan (Continuing Option)
With an IBR plan, your monthly installment depends on when you took out your loan. Through IBR, your monthly loan installments are 10% to 15% of your discretionary income. The higher percentage (15%) applies to loans taken out before 2014, which may be paid back in 25 years. All others under IBR are allowed 20 years. Any amount not paid in the given amount of time is typically forgiven.
The following federal student loans are eligible for IBR:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS loans made to students (not parents)
- Consolidation Loans that do not include PLUS loans (Direct or FFEL) made to parents.
If you fall into the 15% category, you might pay more than you would under other income-based repayment plans, but you may save money on interest through higher monthly payments.
The Income-Based Repayment (IBR) plan remains available but with updated terms. Payments are based on your income, and remaining balances can be forgiven after 20 to 25 years of qualifying payments.
Borrowers who took out loans before July 1, 2026 can still enroll or remain in IBR, depending on eligibility.
Repayment Assistance Plan (RAP) – New for 2026
Starting July 1, 2026, new borrowers will choose between the Standard Plan and the new Repayment Assistance Plan (RAP).
RAP replaces the older income-driven plans (SAVE, PAYE, ICR) and simplifies how payments are calculated.
RAP Highlights:
- Payments range from 1 % to 10 % of discretionary income.
- Forgiveness available after up to 30 years of repayment.
Federal Student Loan Consolidation
Most federal student loans can be combined (or consolidated) into one loan to simplify your monthly bill. Consolidation is also an option to lower that monthly bill by extending your repayment period to as many as 30 years. The downside to consolidation with a longer repayment period is that you’ll likely end up paying more in interest due to the lower payments and extended period.
Consolidation differs from refinancing in that it applies exclusively to federal student loans. Refinancing, on the other hand, allows you to combine federal and private student loans under a plan that could reduce your monthly bill by extending your loan period or offer a lower interest rate saving overall on the cost of the loan.
It’s important to note that consolidating your federal student loans cannot be reversed and it could affect your eligibility for loan forgiveness and income-based repayment options.
Consolidation is still available to both existing and new borrowers.
Repayment Options for Private Student Loans
With private student loans, each lender has its terms and you choose the repayment plan at the time you apply for the loan. Unlike federal loans, most private lenders do not allow you to change repayment plans after you take out the loan. Be sure to do your research and carefully consider your options before agreeing to the loan.
Most private lenders offer multiple repayment options for you to find a plan that fits in your monthly budget. For example, at College Ave, borrowers can choose how long they take to repay the loan and whether to make payments while in school full-time. Customers also get an interest rate reduction when they sign up for autopay.
College Ave also emphasizes the cost benefits of making loan payments while you’re still in school and the option to explore refinancing:
- The Benefits of In-School Student Loan Payments
- 3 Reasons to Refinance Student Loans
- When shopping for private student loans, seek out a lender with a variety of repayment and refinancing options. Learn more about repaying your loan at College Ave
If you have a private student loan and are struggling to make your monthly payments, reach out immediately to your lender to see if there are any financial assistance options like deferment or forbearance available.
Repayment Options for Student Loans
Investing in your education is no small undertaking. When you have clarity about student loan repayment options, you gain a solid grasp of what you’ll owe each month and how long it will take to pay off your loan in full.
Should your circumstances change along the way, you have additional options to adjust and keep your financial plans on track.
