•  You’ll be assigned a loan servicer and need choose a repayment plan when you graduate.

•  The Standard Repayment Plan is the best option to minimize your interest over time.

•  Other plans allow you to lower monthly payments, but ultimately cost more money in interest.

Congratulations! You’ve graduated. Now it’s time to start paying back your student loans. Luckily, you have a six-month grace period for federal student loans before you need to begin making payments.

For each of your loans, you’ll be assigned a servicer – a company that the government works with to handle your monthly payments and select your repayment plan. You may have more than one servicer if you have multiple student loans. If so, you can track all of your federal loans in one place by creating an account on the Federal Student Aid site.

What Are Your Repayment Options?

There are several different repayment plans you can choose from, but most people start with the Standard Plan. You’ll be put on this plan unless you indicate otherwise. Alternative options include the Graduated Repayment Plan, Extended Repayment Plan, and five separate Income-Based Repayment Plans. We’ll review each of these here.

Standard Plan

The Standard Plan is a 10-year repayment plan with fixed monthly payments. If you have a decent job and can meet your monthly payment amount, this is the best plan to start with. Compared to the other initial repayment plans, the Standard Plan will minimize the amount of interest you pay over the term of the loan.

Make sure you set up auto-pay each month so you don’t forget to make your payment. You’ll also receive a 0.25% discount on your rates, which servicers provide as an incentive to make your payments on time.

We recommend starting on the Standard Plan, then refinancing your student loans once you are in a position to do so. We’ll talk more about what you need to refinance in the Student Loan Refinance section.

Graduated and Extended Repayment Plans

Like the Standard Plan, the Graduated Repayment Plan is also based on a 10-year term. The difference is the Graduated Plan allows you to make lower monthly payments when you first graduate, then increasingly larger payments over time (typically every two years). This may be a good plan if you aren’t making much money to start. However, keep in mind that because of compound interest, the lower payments early on mean you’ll be paying more in interest fees over the life of the loan.

You can choose the Extended Repayment Plan if you have more than $30,000 in student loans and want to spread out the payments over a longer period of time. This plan has either a fixed or graduated monthly payment amount and can extend the loan term up to 25 years. Like the Graduated Plan, the Extended Plan allows you to decrease your monthly payment amount compared to the other plans, but will result in more interest over time. We advise against this plan unless you’re having a lot of trouble making your monthly payments. If that’s the case, you may also want to explore the income-based plans.

Income-Based Repayment Plans

The five income-based repayment plans are called Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), and Income-Sensitive Repayment (ISR). We’ll cover each of these in depth in the Repay Your Student Loans Based on Your Income section.

Federal Student Loan Repayment Options

Federal Student Loan Repayment Plan Options

Choosing the Right Plan for You

According to the latest numbers from the College Board, 53% of student loan holders are on the Standard Repayment Plan, 25% of borrowers are on Income-Driven Repayment Plans, 14% of borrowers are on the Graduated Plan, and 8% are on the Extended Repayment Plan.

At Student Loans Guy, we recommend making a dent in your payments earlier because of the effects of compound interest. This will save you money in the long run. If you’re on the path to a high-paying salary, you should start with the Standard Plan, and look to refinance your loans to a lower rate as soon as you can. If you know that you will not make a high salary for the foreseeable future, you may want to explore income-driven repayment plans and student loan forgiveness.

Remember, you’re not locked into the initial repayment plan that you choose. Once you establish a track record of making payments on time, you can explore student loan refinancing or student loan forgiveness.


  • When you graduate, you’ll be assigned a loan servicer and will need choose a repayment plan that works best for you.
  • The Standard Repayment Plan is the best option to minimize your interest over time.
  • The Graduated and Extended Plans allow you to lower your monthly payments, but will cost you more in interest in the long term.
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