What’s the Best Student Loan Repayment Plan for Me?

Repayment plans are not one-size-fits-all. To figure out which one fits you best, consider your annual income, how much debt you have, your family size, and your current financial situation.

Knowing the key differences, benefits, and financial impact of each federal student loan repayment program can empower you to make a choice that’s tailored to your situation.

⚠️ Important Update: Many of the income-driven plans listed here — including SAVE, PAYE, and ICR — will no longer be available for new borrowers after July 1, 2026, and will be completely phased out by July 1, 2028. If you want to stay on one of these plans, you must select and enroll before then. A new income-based Repayment Assistance Plan (RAP) will replace most IDR plans, and all borrowers will be transitioned unless grandfathered in.

Federal Student Loan Repayment Options

Currently, there are four main types of federal student loan repayment plans. As mentioned above, big changes are coming starting July 1, 2026. If you want to stay on one of the current plans — like SAVE, PAYE, or ICR — it’s important to enroll soon. Doing so could help you stay on that plan even after it’s closed to new borrowers.

Here’s a quick summary before we dig into the details of each plan:

• Standard Repayment Plan: The default plan with a 10-year repayment period that borrowers are automatically enrolled in unless they choose a different plan.

• Income-Driven Repayment (IDR) Plans: IDR plans are based on the borrower’s income and family size; there are four main programs:

  • Income-Based Repayment (IBR) Plans

  • Income-Contingent Repayment (ICR) Plans

  • Pay As You Earn (PAYE) Plans

  • Saving on a Valuable Education (SAVE) Plan

• Graduated Repayment Plan: Payments increase every two years of the loan’s 10-year repayment period.

• Extended Repayment Plan: Payments increase every two years of the loan’s 25-year repayment period.

✨ Feeling overwhelmed by all these repayment options? Upsolve’s partner, Student Debt Solutions (SDS), helps you explore which federal repayment and forgiveness programs you qualify for and the best path forward based on your income, loan type, and goals.

SDS is an affiliate partner, which means Upsolve may earn a small commission if you choose to use their paid service. This helps keep our services free.

What Is the Repayment Assistance Plan (RAP)?

The Repayment Assistance Plan (RAP) is a new income-driven repayment plan that takes effect July 1, 2026. Starting in 2028, RAP will become the default plan for most borrowers unless they’ve already enrolled in and remain eligible for a grandfathered plan like SAVE or PAYE.

💰Under RAP, monthly payments are based on a sliding scale from 1% to 10% of your adjusted gross income (AGI), with a minimum payment of $10. You’ll also get a $50 monthly deduction for each dependent you claim on your taxes. 

Unlike other IDR plans that calculate payments based on discretionary income, RAP uses your full AGI, which could result in higher payments for some borrowers, especially those with lower incomes. 

🗓️ Forgiveness under RAP takes 30 years. This is significantly longer than the current 20-year timeline. The forgiveness timeline for those who qualify for Public Service Loan Forgiveness (PSLF) will remain the same at 10 years. 

RAP also includes interest subsidies: If your payment doesn’t fully cover interest, the excess interest won’t be added to your balance. However, principal subsidies are limited to $50 per month. 

Which Student Loan Repayment Plan Should You Enroll In?

It depends on the state of your finances and your main goal. Which of the following do you identify with most:

• I want the lowest monthly payment possible.

• I want to pay the least interest possible.

• I want to enroll in whatever plan qualifies me for Public Service Loan Forgiveness (PSLF) or another forgiveness plan.

Jump to the section to learn about your best options. We’ll look at the pros and cons of different plans later on.

I Want the Lowest Monthly Payment Possible

If you’re trying to get the lowest monthly payment possible, you have two options, depending on your income.

1️⃣ If your income is too low to be able to afford the monthly payment under the Standard Repayment Plan, start by looking at income-driven repayment options.

2️⃣ If you make enough income that you can afford the monthly payment under the Standard Repayment Plan but don’t want to make a payment that high, start by looking at a Graduated Repayment Plan.

Most borrowers find themselves in the first situation: They can’t afford to pay what’s required under the Standard Repayment Plan because they don’t make a lot of income.

I Want To Pay Off My Loans as Fast and Cheaply as Possible

If your main goal is to pay off your loans fast so you don’t have to pay a lot of extra money toward accumulated interest, stick with the Standard Repayment Plan. The SRP has the shortest repayment period of all the federal repayment plans — 10 years.

If you’re really committed to tackling your student loan debt and you can afford it, pay more toward your principal balance each month or put a chunk of “found” money toward your principal as it comes in. For example, some people use all or some of their state or federal income tax refund money to make extra payments on student loans.

I Want To Enroll in a Repayment Plan That Is Eligible for Student Loan Forgiveness

PSLF is the most popular forgiveness program, and unfortunately, it’s also one of the most cumbersome for borrowers to understand. If you want to qualify for Public Service Loan Forgiveness (PSLF), you’re required to enroll in an income-driven repayment plan and work for a qualifying employer. Learn more in our Ultimate Guide to PSLF.

There are other types of student loan forgiveness that may have their own eligibility requirements.

What Is the Standard Repayment Plan (SRP) and What Are the Pros and Cons?

After you graduate or leave school, you get a six-month grace period, during which you don’t have to make student loan payments. After that, federal student loans automatically enter into the Standard Repayment Plan unless you choose a different payment plan.

The Standard Repayment Plan requires you to make fixed monthly payments for 10 years. Every borrower is eligible for the SRP, and you don’t need to apply to get on this plan unless you previously changed your repayment plan and want to re-enter the SRP.

✅ The main upsides to the SRP are that you’ll pay your loan off in just 10 years and you’ll pay the least in interest of any plan. Another benefit: Since your loans are put automatically into the Standard Repayment Plan after you graduate, you don’t have to make an extra effort to change your plan.

❌ The main downside to the SRP is that you’ll have the highest monthly payment of any repayment plan. This may not be a con if you can afford it! But if you can’t afford it, you risk missing or falling behind on payments, which comes with serious consequences.

What Is the Graduated Repayment Plan and What Are Its Pros and Cons?

All borrowers are eligible for the Graduated Repayment Plan. Unlike the Standard Repayment Plan, your monthly student loan payments will increase over time. Your monthly payments will start lower at first and then increase every two years. This payment plan will ensure that your federal student loans are paid off within 10 years, or within 10–30 years for consolidated loans.

Federal student loans eligible for the Graduated Repayment Plan include:

• Direct subsidized and unsubsidized loans

• Subsidized and unsubsidized federal Stafford loans

• All PLUS loans

• All consolidation loans — Direct or Federal Family Education Loans (FFEL)

Like the Standard Repayment Plan, this is not ideal for those seeking Public Service Loan Forgiveness because it is generally not a qualifying repayment plan for PSLF.

Under the Graduated Repayment Plan, borrowers will pay more over the life of the loan because of higher accruing interest in the initial years when monthly payments are lower.

Extended Repayment Plan for Federal Student Loans

Borrowers will be eligible for the Extended Repayment Plan if they have one of the following loans:

• Direct Loans* (subsidized and unsubsidized)

• Federal Stafford loans (subsidized and unsubsidized)

• PLUS loans (any)

• Direct Consolidation Loans or Consolidated FFEL loans

*If you are a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans to qualify for the Extended Repayment Plan.

Under this plan, your federal student loan monthly payments will be lower than with both the Standard and Graduated Repayment plans. However, since the loans are paid off within 25 years, you will pay more over the life of the loan.

Borrowers can choose to have fixed monthly payments (meaning the payment amount remains the same for the 25-year term) or to start with a lower monthly payment at the beginning of the repayment plan that increases as the loan progresses.

What Is an Income-Driven Repayment Plan and What Are the Pros and Cons?

While there are four different types of income-driven repayment plans, they all have a few things in common:

• Your monthly payment is tied to your income and family size, and you must recertify this information annually, even if nothing has changed.

• After you make payments for the full loan term (which varies by the plan type), you are eligible to have any remaining balance forgiven.

• Your monthly payment amount will always be lower under an IDR plan than it would be under the 10-year Standard Repayment Plan.

Here’s a quick overview of the different IDR plans by monthly payment and repayment term.

Income-Based Repayment Plan (IBR Plan)

To be eligible for an Income-Based Repayment Plan, you must have high debt relative to your income. Your monthly payments will either be 10% or 15% of your discretionary income, depending on when you first took out your loan. Your repayment period will be 20 or 25 years, again depending on when you received your first federal student loans.

Income-Contingent Repayment Plan (ICR Plan)

If you have a Direct Loan (subsidized or unsubsidized), Direct PLUS loan (made to students), or a Direct Consolidation Loan, you are eligible for the Income-Contingent Repayment Plan.

Your monthly payments will be either 20% of your discretionary income OR the amount you would pay on a fixed payment plan over 12 years, adjusted according to your income. If that sounds confusing, it’s because it is! You can speak with your loan servicer to see what your payment would be under this or another IDR plan. They can help you figure out which plan is best for you given the type of loan(s) you have and your income and family size.

This plan may be advantageous to parent borrowers, who do not qualify under income-based repayment plans. Parent borrowers can access this plan by consolidating their parent PLUS loan into a Direct Consolidation Loan.

Pay As You Earn Repayment Plan (PAYE) for Federal Student Loans

To qualify for PAYE, you must meet both of the following requirements:

• You must be a new federal student loan borrower on or after Oct. 1, 2007.

• You must have received a disbursement of a Direct federal student loan on or after Oct. 1, 2011.

The Pay As You Earn (PAYE) Plan calculates monthly payments at 10% of your discretionary income.

Saving on a Valuable Education Plan (SAVE) for Federal Student Loans (Formerly the REPAYE Plan)

The SAVE Plan decreases monthly payments (compared to the previous REPAYE Plan) by increasing the income exemption from 150% to 225% of the poverty line.

Your monthly payment under a SAVE Plan is either 5% of your discretionary income (for undergraduate loans), 10% (for graduate loans), or a weighted average (if you have both undergraduate and graduate loans).

The forgiveness timeline for the SAVE Plan is 10 years (for low balance borrowers*), 20 years (for undergraduate loans), and 25 years (for graduate loans).

*Low balance borrowers are borrowers who owe less than $12,000 in federal student loans.

If you are married and file your taxes separately from your partner, the SAVE Plan excludes spousal income.

Do Private Student Loans Qualify for Repayment Plans?

This article focuses on repayment plan options for federal student loan borrowers. These options are standardized because they’re set by the federal government. Private lenders back private student loans, and the lender gets to set the terms of repayment.

If you have private student loans, your repayment plan is spelled out in the loan agreement you signed with the lender when you took out the loan. If you can’t afford the monthly payment for your private loans, you can call the lender to see if they offer any other repayment options. 

If you qualify, you can refinance your loan and get new loan terms like a lower interest rate or lower monthly payments. To refinance, you usually need a good credit score.

Student Debt Solutions offers comprehensive student loan repayment planning services that include private and federal loans. Users found 50% a month in savings on average utilizing their services.

Help! I Still Can’t Pay My Student Loans. What Are My Options?

If you’ve explored repayment plans but are still overwhelmed by student loans and other debts, bankruptcy might be an option worth considering. Bankruptcy is a legal process designed to give people a fresh start when they’re buried in debt. 

Only certain federal student loans can be discharged in Chapter 7 bankruptcy if you can show they cause undue hardship. This standard can still be tough to meet, but in 2022, the U.S. Department of Justice and Department of Education made it easier for borrowers to qualify by streamlining the process.

If you’re struggling with more than just student loans and don’t see a path forward, take Upsolve’s free screener to find out if you qualify for Chapter 7 bankruptcy. We’ve helped thousands of people get relief from debt and take the first step toward a fresh start — completely for free.

FAQs

What Is Student Loan Consolidation?

Student loan consolidation lets you combine multiple federal student loans into one new loan — called a Direct Consolidation Loan. This simplifies repayment because you’ll have just one monthly payment and one loan servicer instead of several.

There are pros and cons to consider:

Pros:

• One loan, one payment

• Access to certain repayment plans or forgiveness programs you may not qualify for otherwise

• Option to extend your repayment term, which can lower your monthly payment

Cons:

• Extending your repayment term may mean paying more interest over time

• You might lose special benefits on certain loans (like Perkins Loan cancellation)

• If you're already working toward Public Service Loan Forgiveness (PSLF), consolidating will reset your progress

⚠️ Important: You can’t use federal consolidation to combine private loans — only federal loans qualify. And consolidation is not the same as refinancing. Refinancing is done through a private lender and can cause you to lose federal protections like income-driven repayment or forgiveness options.

If you’re thinking about consolidating, it’s smart to look at your current loan terms, repayment goals, and whether you're pursuing forgiveness. You can consolidate through the Federal Student Aid website, and there’s no fee to apply.

Can You Pay Off Your Student Loans Early?

Yes, you can pay off your student loans early, and there’s no penalty for doing so. But whether it’s the best move depends on your overall financial situation and goals.

Before making extra payments, consider:

• Building an emergency fund (aim for an amount equal to least three months of expenses)

• Paying off higher-interest debt first (like credit cards)

• Contributing to retirement savings, especially if your employer offers matching funds

It may also make sense to hold off on early repayment if:

• You're eligible for loan forgiveness programs, like Public Service Loan Forgiveness

• Your interest rate is low and you'd rather save or invest

• You’re waiting to see if any federal relief or policy changes apply to your loans

If you decide to pay early, even small extra payments can help reduce your total interest and loan balance over time.

Can You Pause Your Student Loan Payments if You’re Unemployed?

Yes, if you're unemployed, you may be able to pause your federal student loan payments through deferment, forbearance, or by enrolling in an income-driven repayment (IDR) plan.

• Deferment lets you temporarily stop making payments. If you have subsidized federal loans, interest won’t accrue during this time. To qualify, you must show that you’re unemployed and actively looking for work or facing economic hardship. Deferment can last up to 36 months but usually needs to be renewed each year.

• Forbearance is another option if you don’t qualify for deferment. It’s easier to get, but interest continues to grow on all loan types. General forbearance can last up to 12 months at a time, with a maximum of 36 months total.

• Income-driven repayment plans are often a smart first step. These plans set your monthly payment based on your income—and if you have no income, your monthly payment could be as low as $0. These $0 payments may still count toward loan forgiveness programs like Public Service Loan Forgiveness (PSLF).

If you’re not sure which option is best, contacting your loan servicer is a good place to start.