Everyone’s financial goals are different, and there are other factors which might affect which repayment plans you are eligible for.
Every plan displayed in the Savi tool - with the exception of Standard - is an income-driven plan. Any Income-Driven plan (IDR) would be eligible for PSLF. However, they are calculated differently. If your goal is the lowest monthly payment, select the lowest available plan to you. If your goal is to pay off your loans as quickly as possible (this might mean a higher payment), select the plan that is most aligned with that goal.
Think carefully about your financial goals for your student loans, and which plan best aligns with those goals. Also note, for Income Driven Repayment plans, you need to recertify your income every twelve months. The plan you select will only reflect the payment amount until you recertify your income again the following year. This means that if your income increases, your payments will also increase. Same if your income decreases significantly.
*Quick Access:
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
- Income Based Repayment (IBR)
- Income Contingent Repayment (ICR)
- Income Sensitive Repayment (ISR)
- Standard Repayment
- Graduated Repayment Plan
- Extended Repayment Plan
Here is a general overview of each Income Driven Repayment Plan:
PAYE (Pay As You Earn) is an income-driven repayment plan (IDR) which calculates your monthly payment accordingly:
- Generally it's 10% of your discretionary income (cannot be more than your initial Standard Repayment plan amount)
- Eligible Loan Types include: Direct Subsidized, Direct Unsubsidized, Direct PLUS loans (graduate or professional students), Direct Consolidation Loans which do not contain any Parent PLUS Loans
- These Loan Types are NOT eligible: Direct PLUS Loans, Direct Consolidation Loans which contain Parent PLUS Loans
- Repayment period - 20 years
A few other things to consider about PAYE:
- To qualify for the PAYE Plan you must be a new borrower. This means that you must have had no outstanding balance on a Direct Loan or FFEL Program loan when you received a Direct Loan or FFEL Program loan on or after Oct. 1, 2007, and you must have received a disbursement of a Direct Loan on or after Oct. 1, 2011.
- If you’re married and you and your spouse file separate federal income tax returns, only your income will be used to calculate your monthly payment amount. If you’re married and you and your spouse file a joint federal income tax return, your joint income will be used to calculate your monthly payment amount.
- Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years.
REPAYE (Revised Pay As You Earn) is an income-driven repayment plan (IDR) which calculates your monthly payment accordingly:
- 10% of discretionary income, with no cap. Payments could be higher than they’d be on the standard plan.
- Eligible Loan Types include: Direct Subsidized, Direct Unsubsidized, Direct PLUS loans (graduate or professional students), Direct Consolidation Loans which do not contain any Parent PLUS Loans
- These Loan Types are NOT eligible: Direct PLUS Loans, Direct Consolidation Loans which contain Parent PLUS Loans
- Repayment period
- 20 years if you only have undergraduate loans.
- 25 years if you have any graduate school loans.
A few other things to consider about REPAYE:
- 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 years (if all loans were taken out for undergraduate study) or 25 years (if any loans were taken out for graduate or professional study).
IBR (Income Based Repayment) is an income-driven repayment plan (IDR) which calculates your monthly payment accordingly:
- Generally it's 10% of your discretionary income (if you're a new borrower on or after July 1, 2014) - not to exceed your Standard Repayment plan amount.
- Generally 15% of your discretionary income (if you're NOT a new borrower on or after July 1, 2014) - not to exceed your Standard Repayment plan amount.
- Eligible Loan Types include: Direct Subsidized, Direct Unsubsidized, Direct PLUS loans (graduate or professional students), Direct Consolidation Loans which do not contain any Parent PLUS Loans
- These Loan Types are NOT eligible: Direct PLUS Loans, Direct Consolidation Loans which contain Parent PLUS Loans
- Repayment period
- 20 years (if you are a new borrower on or after July 1, 2014)
- 25 years (if you are a NOT new borrower on or after July 1, 2014)
A few other things to consider about IBR:
- If you're married, your spouse's income or loan debt will be considered only if you file a joint tax return.
- Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years or 25 years, depending on when you received your first loans.
ICR (Income Contingent Repayment) is an income-driven repayment plan (IDR) which calculates your monthly payment accordingly:
- The lesser of the following:
- 20% of your discretionary income - OR
- The amount you would pay on a fixed repayment plan over the course of 12 years; adjusted according to your income
- Eligible Loan Types include: Direct Subsidized, Direct Unsubsidized, Direct PLUS loans (graduate or professional students), Direct Consolidation Loans which do not contain any Parent PLUS Loans
- These Loan Types are NOT eligible: Direct PLUS Loans, Direct Consolidation Loans which contain Parent PLUS Loans.
- **Direct Parent PLUS Loans would be eligible for ICR if consolidated
- Repayment period - 25 years
A few other things to consider about ICR:
- If you're married, your spouse's income or loan debt will be considered only if you file a joint tax return or you choose to repay your Direct Loans jointly with your spouse.
- Any outstanding balance will be forgiven if you haven't repaid your loan in full after 25 years.
Income-Sensitive Repayment (ISR) Plan is a repayment plan that is partially driven by your income which calculates your monthly payment accordingly:
- Eligible Loan Types include: Federal Family Education Loan (FFEL)
- These Loan Types are NOT eligible: all other federal loans, including any Direct Loan.
- The formula for determining the monthly payment amount can vary from lender to lender under the FFEL program. Your monthly payment is based on annual income, but your loan will be paid in full within 15 years.
A few other things to consider about ISR:
- This plan does not offer any opportunities for forgiveness. If you’re a FFEL borrower who expects your income to increase in the future, you could stand to benefit from this plan. If you’re a FFEL borrower seeking extended relief, you might be better off consolidating and applying for another income-driven repayment plan.
- You’ll pay more over time than under the 10-year Standard Plan.
The following repayment plans are not income-driven, but are listed to provide clarity to borrowers.
Standard Repayment Plan
Basic information about this plan:
- This is the default plan offered by the US Department of Education.
- If you do not qualify for loan forgiveness, you may pay less than plan than you would under an income driven repayment plan.
Additional information about this plan:
- Borrowers enrolled in this plan are technically eligible for PSLF, but will receive little to no forgiveness if they never switch into an income-driven repayment plan.
- Payments are a fixed amount that ensures your loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).
Graduated Repayment Plan
Basic information about this plan:
- This is a plan offered by the US Department of Education that sets a schedule for payments that start lower at first and then increase over time. This schedule is not tied to your income and increases every two years.
- All borrowers are eligible for this plan.
- You’ll pay more over time than under the 10-year Standard Plan.
Additional information about this plan:
- Generally not a qualifying repayment plan for PSLF, but could be under a special program called Temporary Expanded PSLF.
- Payments are lower at first and then increase, usually every two years, and are for an amount that will ensure your loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).
Extended Repayment Plan
Basic information about this plan:
- If you're a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans.
- All loan types are eligible.
- Repayment period of 25 years.
Additional information about this plan:
- A borrower can chose to have payments be fixed or graduated
- Generally not a qualifying repayment plan for PSLF, but could be under a special program called Temporary Expanded PSLF.
- Your monthly payments will be lower than under the 10-year Standard Plan or the Graduated Repayment Plan.
- You’ll pay more over time than under the 10-year Standard Plan.
- Not a qualifying repayment plan for PSLF.