Repaying a federal student loan

When it comes to repaying a federal student loan, there are several repayment plans available and the borrower will be asked to select one of them. If the borrower doesn’t make a choice, he or she will automatically be placed on the Standard Repayment Plan. With a Standard Repayment Plan, the repayment period is 10 years.

Do I have to stay with the same repayment plan until I have paid back all the money?

No, you can switch back and forth between the available repayment plans as you see fit.

Do I pay directly to the federal government?


No, when you repay your federal student loan you will be making payments to your loan servicer.

Each servicer have their own payment process. Visit your loan servicer’s website to find out more about how and when to make your payments.

Automatic debit

For a Direct Loan, it is possible to sign up for automatic debit through the loan servicer. This means that money will be taken automatically from your bank account each time a payment is due. Signing up for this service will give you an interest deduction.

Who is my loan servicer?

If you don’t know the name of your loan servicer, visit and log in to your account there to find out.

Examples of loan servicers:

FedLoan Servicing (PHEAA)
Granite State – GSMR
Great Lakes Educational Loan Services, Inc.
OSLA Servicing

An income-driven repayment plan

If your income is low, an income-driven repayment plan can make it possible for you to avoid falling behind with the repayments. Most federal student loans are eligible for at least one income-driven repayment plan. With some plans, it is possible to reduce the monthly payment down to zero if your income is low enough.

If you want to repay your student loan with an income-driven repayment plan, you need to apply for this.

Available income-driven repayment plans for federal student loans

  • Revised Pay As You Earn Repayment Plan (REPAYE Plan)
  • Pay As You Earn Repayment Plan (PAYE Plan)
  • Income-Based Repayment Plan (IBR Plan)
  • Income-Contingent Repayment Plan (ICR Plan)

With most income-driven repayment plans, the size of the monthly repayment is calculated based on the debtors discretionary income.

For the Income-Based Repayment, Pay As You Earn and loan rehabilitation, your discretionary income is the part of your income that exceeds 150% of the poverty guideline for your family size in your state.

For the Income-Contingent Repayment Plan, your discretionary income is the part of your income that exceeds the poverty guideline for your family size in your state.

The poverty guideline for each state is maintained by the U.S. Department of Health and Human Services. For more information, visit: