Federal Direct-Loan Repayment and Consolidation

Loan Repayment

Repayment begins six months after graduation, withdrawal or less than half-time enrollment. There are several repayment options available, which are listed below.  We also encourage you to use the loan simulator, which is a new resource made available by the Federal Department of Education as a tool to help you decide which repayment plan will best meet your goals and whether you should consolidate.

Standard Repayment Plan

• fixed annual repayment amount with the monthly repayment amount of at least $50
• paid over a fixed period of a maximum of 10 years

Graduated Repayment Plan

• payments lower at first and then increase, generally every two years
• paid over a maximum period of 10 years
• scheduled payments shall not be less than the interest that accrues between payments, nor will payments be more than three times greater than any other payment

Extended Repayment Plan

• fixed or graduated monthly repayment amount
• paid over an extended period of time with the maximum being 25 years

Income-based Repayment Plan (IBR)

• annual amount due on a 10-year repayment plan limited to 15 percent of the amount by which the adjusted gross income exceeds 150 percent of the poverty line
• based on family size, income and a partial financial hardship
• annual amount due will be divided by 12 to calculate monthly payments
• may change repayment at any time
• must reapply every year

Income Contingent Repayment Plan (ICR)

• each year monthly payment is based on adjusted gross income, family size and total amount of direct loans borrowed
• maximum repayment period is 25 years.

Revised Pay As You Earn Repayment Plan (REPAYE)

• monthly payments will be ten percent of discretionary income
• payments are recalculated each year and are based on your updated income and family size
• if you're married, both your and your spouse’s income or loan debt will be considered, whether taxes are filed jointly or separately (with limited exceptions)
• any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 or 25 years

Income-Sensitive Repayment Plan

• your monthly payment is based on annual income
• up to 15 years

The U.S. Department of Education will provide the borrower with an opportunity to select a repayment plan based on the plans for which the borrower may qualify. If the borrower does not select a plan, the department will assign the borrower the standard repayment plan. The U.S. Department of Education will issue a repayment schedule that provides payment amounts and due dates. The education department may grant the borrower forbearance to eliminate a delinquency. The borrower may prepay all or any part of the unpaid balance on the loans at any time without penalty.

Loan Consolidation

Consolidating allows borrowers to combine one or more of their federal education loans into one new loan to simplify repayment, which can extend the repayment term and allow for lower monthly payments.

More Information

Please visit the Department of Education's Federal Student Aid page for more information on repayment and consolidation.

Learn more about the Federal Direct Loan Program:

• loan limits
• interest rates
• loan forgiveness