Being in debt can be overwhelming, especially when you have a significant student loan to pay back. Fortunately, there are various repayment plans available to help make things easier for you. But how do you determine which one is best for you? In this blog, we’ll go through the most common types of repayment plans and help you find the right one for you.

Standard Repayment Plan 📊💳

The Standard Repayment Plan is the most straightforward plan and is what most borrowers start with. With this plan, you make fixed monthly payments for ten years. While it means paying off your loans quicker, the payments can be higher than other repayment plans. If you’re looking to pay off your loans quickly, this is the plan for you.

A graph of a steady line going up for 10 years

Graduated Repayment Plan 🔝📈

The Graduated Repayment Plan also takes ten years but initially starts with lower payments that increase every two years. This repayment plan is great if you’re starting a low-income job and expect your earnings to increase over time. The downside is that you’ll pay more interest over the life of the loan.

A graph showing gradually increasing payments every 2 years

Income-Driven Repayment Plans 💰📈👨‍👩‍👧‍👦

Income-Driven Repayment Plans base your monthly payments on how much you earn, and the payment structure can vary depending on the plan. These kinds of repayment plans are great if you’re struggling financially and need lower monthly payments. You’ll need to recertify your income and family situation every year to stay on track. The downside to these plans is that you’ll pay more interest over the life of the loan.

A chart detailing the different income-driven repayment plans available

Pay as You Earn Repayment Plan 💳💰👌

The Pay as You Earn Repayment Plan is a type of Income-Driven Repayment Plan that limits your payment to 10% of your discretionary income. Discretionary income is the difference between your income and 150% of the poverty line for your family size. This plan has the same 20-25 year loan forgiveness option as the others.

A person using their phone to check their income versus the poverty line for their family size

Revised Pay as You Earn Repayment Plan 💳💰🤔

The Revised Pay as You Earn Repayment Plan (REPAYE) has a monthly payment structure, like the Pay as You Earn Repayment Plan, based on your income. But this plan is different as it requires you to pay 10% of your discretionary income, but there’s no cap. The REPAYE plan does offer interest subsidies, so if your payment doesn’t cover the interest added to your loan, the government will pay for it. This plan has the same 20-25 year loan forgiveness option as the others.

A person paying for their loan on a computer, with a government official behind them looking pleased

Conclusion 🎉💰💻

Paying off student loans can be overwhelming, but finding the right repayment plan can make it more manageable. It’s essential to explore different repayment plans to find the one that fits your financial situation and goals. Not all plans work the same way, so take the time to research them, ask questions, and consult your loan servicer.

A person celebrating with streamers and balloons as they pay off their student loans

At the end of the day, you want to find a repayment plan that’ll help you pay off your loan comfortably without breaking the bank or adding too much interest. Once you find the right repayment plan, it’ll give you peace of mind, making it one less thing to worry about. So start exploring today!