Updated: Apr 26, 2025

Paying off student loans can feel overwhelming, but understanding your repayment options can help you manage your debt more confidently. Whether you’re just finishing school or have been making payments for years, the right plan can make a big difference in your monthly budget and your long-term financial health.

Know What You Owe

The first step to managing student loans is knowing exactly how much you owe, who your loan servicers are, and what types of loans you have. Federal student loans and private student loans work differently and offer different repayment and forgiveness options.

To find details about your federal loans, visit studentaid.gov. There, you can see your loan balances, interest rates, and loan servicer contact info. For private loans, you’ll need to log in to your lender’s website or check your credit report to see the full list.

It’s also important to note whether your loans are subsidized or unsubsidized. Subsidized federal loans don’t accrue interest while you’re in school or during deferment, while unsubsidized loans do. Knowing this helps you prioritize which loans to pay off first if you’re trying to reduce overall interest.

Standard Repayment Plan: A Quick Payoff

The standard repayment plan for federal student loans divides your total balance into equal monthly payments over 10 years. This plan gets your loans paid off the fastest and usually costs the least in total interest. But the monthly payments can be high, especially for borrowers with large balances.

This plan is a good fit if your income allows for higher payments and you want to be debt-free as soon as possible. There’s no penalty for paying off your loans early, so you can always pay more than the minimum if you want to shorten the timeline even further.

Income-Driven Repayment Plans

If your monthly payment feels unmanageable, income-driven repayment (IDR) plans may offer relief. These plans adjust your payments based on your income and family size, potentially reducing your monthly bill to as little as $0.

There are several types of IDR plans, including:

• SAVE (Saving on a Valuable Education): The newest IDR plan, replacing REPAYE. Payments are capped at 5–10% of discretionary income and interest not covered by your payment is waived.

• Income-Based Repayment (IBR): Caps payments at 10–15% of discretionary income, depending on when your loans were taken out.

• Income-Contingent Repayment (ICR): Capped at 20% of discretionary income or the amount you’d pay under a 12-year fixed plan.

After 20 or 25 years of qualifying payments, the remaining balance is forgiven, although forgiven amounts may be taxable depending on current law. You can apply for these plans at studentaid.gov.

Public Service Loan Forgiveness (PSLF)

If you work in public service or for a nonprofit, you may qualify for Public Service Loan Forgiveness. Under this program, your remaining federal student loan balance is forgiven after making 120 qualifying payments while working full-time for a qualified employer.

Only payments made under a qualifying IDR plan count toward the 120-payment requirement. PSLF is tax-free, and recent changes to the program have made it easier to qualify, especially with new one-time account adjustments for borrowers with older loans.

To check your eligibility and submit an employment certification form, visit the PSLF Help Tool.

Deferment and Forbearance

If you’re struggling due to temporary hardship—like unemployment or medical issues—you might qualify for deferment or forbearance. These options let you pause your payments for a set time, though interest may still accrue, especially on unsubsidized loans.

While deferment and forbearance can provide short-term relief, they aren’t long-term solutions. Payments paused during these periods typically don’t count toward forgiveness programs and may increase the total amount you owe over time.

Refinancing Student Loans

Refinancing is when a private lender pays off your existing student loans and gives you a new loan with different terms. This can be useful if you have high-interest private loans or want to simplify multiple payments into one.

You may get a lower interest rate through refinancing if you have strong credit and a stable income. However, refinancing federal loans means giving up access to federal benefits like income-driven repayment plans, deferment, and forgiveness programs. For that reason, many borrowers choose to refinance only their private loans.

Sites like Credible and LendKey let you compare rates from multiple lenders without affecting your credit score.

Student Loan Repayment Options at a Glance

Tips for Staying on Top of Payments

Set up auto-pay to ensure you never miss a payment—many loan servicers even offer a small interest rate discount for doing so. Make a budget that includes your loan payment as a non-negotiable expense each month. If possible, make extra payments toward your principal when you have extra cash, like a tax refund or bonus.

It’s also smart to periodically re-evaluate your repayment plan. If your income has changed, you may qualify for a different plan with better terms. Reapplying for income-driven plans annually ensures your payments remain affordable based on your current situation.

Final Thoughts

Student loan repayment doesn’t have to be a mystery. By understanding your options—whether that’s an income-driven plan, refinancing, or forgiveness—you can take control of your loan repayment strategy. Explore tools at studentaid.gov, compare repayment plans, and take small, consistent steps toward managing your debt and building your financial future.