Loan Repayment Options

There are several repayment options for federal loans. If you find your monthly payment does not fit within your monthly budget, contact your lender or servicer to discuss your options. Once you have selected the right repayment plan for you, signing up for auto-debit from your checking account may save you money by lowering your interest rate. All borrowers have certain rights and responsibilities in repaying their student loans. If for some reason you need to postpone payment, it is important that you contact your lender or servicer immediately to discuss your options.

Types of Repayment Plans

  • Standard Repayment Plan
    This is also known as a Level Repayment Schedule. Under this plan you pay a fixed monthly amount for up to 10 years.
  • Graduated Repayment Plan
    The plan starts off with small monthly payments and gradually increases the payment every two years. The monthly payment may be no less than 50% and no more than 150% of the monthly payment under the standard repayment plan. The monthly payment amount may not be less than the accrued interest.
  • Extended Repayment Plan
    This plan allows a loan term up to 25 years, depending on the total amount borrowed if you qualify. This option will give you a lower monthly payment, but will increase the total amount borrowed. You must have a balance of $30,000 or more and loans must have been disbursed on or after Oct. 7, 1998.
  • Income Sensitive Repayment Plan
    This plan gives flexibility in monthly loan payment, but can be the most expensive. This plan must be applied for annually and your monthly payment will be based on your gross monthly income and your student loan debt.
  • Income-Based Repayment
    These plans cap the monthly payments at a percentage of your discretionary income, which is based on your income, family size, and total amount borrowed. Your monthly payment amount is adjusted annually, based on changes in annual income and family size.
    Repayment Plan Eligibility Monthly Payment Discharge After
    Revised Pay As You Earn (REPAYE) All Direct student loan borrowers. No partial financial hardship (PFH) requirement. 10% of discretionary income. 20 years if repaying only undergraduate debt; 25 years if repaying any graduate debt.
    Income-Based Repayment Borrowers who take out their first federal student loan on or after July 1, 2014, and have a PFH. 10% of discretionary income, up to the fixed 10-year payment amount. 20 years
    Pay As You Earn (PAYE)

    Direct student loan borrowers who took out their first loan after September 30, 2007 and at least one loan after September 30, 2011, and have a PFH. 10% of discretionary income, up to the fixed 10-year payment amount. 25 Years
    Income-Contingent Repayment (ICR) All Direct Loan borrowers. No PFH requirement. The lesser of: 20% of discretionary income and 12- yr repayment amount x income percentage factor. 25 years
  • Loan Repayment/Forgiveness Programs
    These programs give you the opportunity to pay down loan balances in exchange for service. Please check the following websites for additional information:

2020 Financial Aid Modules for Osteopathic Medical School Students and Graduates