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Federal Direct Student Loan Repayment Options

Standard Repayment

The standard repayment option for Federal Direct Loans amortizes the repayment evenly over a ten year repayment period.

Extended Repayment

Borrowers who borrowed their first student loan in October of 1998 or later are eligible to select an extended repayment term up to 25 years, dependent upon the amount they have borrowed.

Income Contingent Repayment (ICR)

Under this plan, your monthly payments will be calculated on the basis of your adjusted gross income (AGI, plus your spouse's income if you're married), family size, and the total amount of your Direct Loans.

The maximum repayment period is 25 years. If you haven't fully repaid your loans after 25 years (time spent in deferment or forbearance does not count) under this plan, the unpaid portion will be discharged. You may, however, have to pay taxes on the amount that is discharged.

Income Based Repayment (IBR)

The Income Based Repayment plan calculates your monthly payment as a percentage of your income. The IBR option results in a smaller monthly payment than a borrower would have under ICR.

Pay As You Earn

The Pay As You Earn (PAYE) option affords student loan borrowers the opportunity to have the monthly payment on their federal loans calculated as a percentage of available income rather than being dependent upon the amount borrowed. The PAYE option results in a smaller monthly payment than a borrower would have under ICR or IBR.

This program is available only to those borrowers who did not have an outstanding Federal Stafford or PLUS Loan balance as of October 1, 2007 and who also received a new disbursement from a Federal Direct student loan on October 1, 2011 or later.


Consolidation offers the borrower the opportunity to combine together any federal student loans into one consolidation loan. The consolidation loan will have a longer repayment term and a slightly higher interest rate (based on the interest rates of the loans included in the consolidation), which results in a lower monthly payment. Consolidation is often a good option for borrowers who have multiple lenders and wish to make their repayment less complicated. Borrowers can learn more and start the consolidation application here.

Public Service Loan Forgiveness

Public Service Loan Forgiveness can be a relief for public service employees who carry significant federal student loan debt. This program allows any student loan borrower who has made 120 qualifying payments on their Federal Direct Student Loans while working full-time in public service work to have the remaining balance of the loan forgiven.