Standard or Level Repayment
The most common and typically the least expensive option in terms of total interest costs. This plan provides a fixed monthly payment of at least $50 over a period of up to 10 years. If your monthly payments under this plan exceed 8-10 percent of your gross monthly income, you might want to consider another repayment option or loan consolidation.
Monthly payments start low and increase over time. This may be a good choice if you have limited income to start, but expect higher earnings in the future. The maximum repayment under this plan is 10 years. Total interest costs are higher than those for the standard plan.
Payments can be adjusted up or down annually to account for changes in your income. The repayment period of 10 years can be extended to 15 years under a special forbearance provision. Total interest costs are higher with this plan than with the standard/level repayment.
Loan consolidation allows you to bundle all of your federal education loans into one convenient single monthly loan payment at a fixed rate. Depending on your total outstanding loan balance, you may also be able to extend your repayment period and lower your monthly payments. You may only consolidate your loans once you have graduated or have entered repayment.