If you borrowed money from the government to help pay for college, the time will come when you need to pay your student loans back. That time typically arrives six months after you graduate or drop below half-time status.
While the prospect of paying student debt may seem daunting while you’re a student with little to no income, don’t stress. The U.S. Education Department offers a number of repayment options, including plans that require you to pay only a small percentage of your monthly salary. Plus, there are steps you can take to make it easier to repay your student loans and potentially save money on interest.
Read on to learn more on how to start paying back your federal student loans.
Table of Contents
Key Points
• You typically begin repaying federal student loans six months after graduating or dropping below half-time enrollment, but interest may accrue during this grace period.
• There are several repayment plans for loans disbursed before July 1, 2026, including the standard 10-year fixed plan and income-driven repayment (IDR) options tied to your income.
• You can consolidate multiple federal loans into a single Direct Consolidation Loan to simplify payments, though it doesn’t lower your interest rate.
• Refinancing federal loans through a private lender might lower your monthly payments or interest rate, but you’ll give up federal protections and forgiveness benefits.
• Your repayment plan isn’t permanent — you can switch plans as your financial situation changes, and consider consolidating or refinancing later if needed.
Types of Federal Student Loans
To determine the right student loan repayment strategy, it’s important to know what type of student loans you have. Here’s a look at the main types of federal student loans.
Direct Subsidized Loans
Direct Subsidized Loans are a type of federal student loan only for undergraduates who have demonstrated financial need. With these loans, the government pays the interest on the loan while you are in school and during the grace period.
Direct Unsubsidized Loans
Direct Unsubsidized Loans are available to eligible undergraduate, graduate, and professional students, and eligibility is not based upon financial need. Borrowers are responsible for all interest that accrues on the loan.
Direct PLUS Loans
Direct PLUS Loans are federal loans that graduate or professional students and parents of dependent undergraduate students can use to help pay for education expenses. These loans are unsubsidized, meaning that interest accrues throughout the life of the loan, including while the student is enrolled in school.
Starting on July 1, 2026, though, Direct Grad PLUS Loans will no longer be available. Students will instead rely on Direct Unsubsidized Loans, which will have new annual and lifetime borrowing caps. Parent PLUS Loans will still be an option, but new limits will apply starting on July 1, 2026.
Direct Consolidation Loans
Direct Consolidation Loans allow borrowers to combine multiple existing federal loans into one new loan with a single monthly payment. This simplifies repayment and can extend the repayment term, potentially lowering monthly costs. However, it won’t reduce your interest rate, since the new rate is a weighted average of the original loans rounded up to the nearest eighth of a percent.
When Do You Have to Pay Back Federal Student Loans?
You need to begin paying back most federal student loans six months after you leave college or drop below half-time enrollment.
Direct PLUS Loans enter repayment once your loan is fully disbursed. However, graduate/professional students who take out PLUS loans get an automatic deferment, which means they don’t have to make payments while they are in school at least half time and for an additional six months after they graduate.
If you’re a Parent PLUS Loan borrower, though, payments are due upon disbursement. You can, however, request a deferment (it’s not automatic). This deferment means you won’t have to pay while your child is enrolled at least half time and for an additional six months after your child leaves school or drops below half-time status.
Grace Periods and Deferment Options
A grace period is the span of time after you graduate, leave school, or drop below half-time enrollment during which you are not required to make federal student loan payments. Most federal loans, including Direct Subsidized and Unsubsidized Loans, offer a six-month grace period. Grace periods give borrowers time to find work, organize finances, and prepare for repayment.
Deferment allows borrowers to temporarily pause federal student loan payments due to qualifying circumstances such as economic hardship, unemployment, military service, or returning to school. During deferment, interest does not accrue on subsidized loans, though it typically continues to accumulate on unsubsidized loans.
Note that under the 2025 federal budget bill, loans made after July 1, 2027 are no longer eligible for deferments based on unemployment or economic hardship.
How to Pay Federal Student Loans
When you leave school, you’ll be required to complete exit counseling. This is an online program offered by the government that helps you prepare to repay your federal student loans. Once you’ve completed your exit counseling, here’s what you’ll need to do to start paying back your federal student loans.
1. Find Your Student Loan Servicer
You can find your federal student loan servicer by logging into your account at StudentAid.gov, where all federal loans and their assigned servicers are listed in your dashboard. This portal provides the servicer’s name, contact information, and details about each loan.
2. Review and Select a Repayment Plan
You’ll then have the option to pick a repayment plan. If you don’t choose a specific plan, you’ll automatically be placed on the 10-year Standard Repayment Plan. However, you can change plans at any time once you’ve begun paying down your loans.
Here’s a look at your repayment plan options, plus tips on why you might choose one plan over another.
Standard Repayment Plan
The Standard Repayment Plan is the default loan repayment plan for federal student loans. Under this plan, you pay a fixed amount every month for up to 10 years (for loans disbursed before July 1, 2026). For loans disbursed after this date, the repayment term will depend on your federal student loan balance. This can be a good option for borrowers who want to pay less interest over time.
Income-Driven Repayment Plans
With income-driven repayment plans (IDRs), the amount you pay each month on your student loans is tied to the amount of money you make, so you never need to pay more than you can reasonably afford. Generally, your payment amount under an IDR plan is a percentage of your discretionary income.
Graduated Repayment Plan
The Graduated Repayment Plan starts with lower payments that increase every two years. Payments are made for up to 10 years (between 10 and 30 years for consolidation loans). If your income is low now but you expect it to increase steadily over time, this plan might be right for you. Keep in mind that this plan is only available for loans disbursed before July 1, 2026.
Extended Repayment Plan
The Extended Repayment Plan, also only available for loans disbursed before July 1, 2026, is similar to the Standard Repayment Plan, but the term of the loan is longer. Extended Repayment Plans generally have terms of up to 25 years. The longer term allows for lower monthly payments, but you may end up paying more over the life of your loan thanks to additional interest charges.
3. Make a Payment
Once you know your servicer and your repayment plan, the next step is making your actual student loan payment. Most borrowers choose the most convenient method, but your servicer typically offers several options.
Online
Most servicers allow you to make payments directly through their online portal, where you can schedule one-time or recurring payments. Paying online is usually the fastest and most reliable method, making it easy to track your balance and payment history.
By Mail
You can also make payments by mailing a check or money order to your loan servicer. Be sure to include your account number and allow enough time for the payment to arrive and be processed before your due date.
4. Set Up Autopay and Payment Alerts
You might also consider signing up for autopay through your loan servicer. Since your payments will be automatically taken from your bank account, you won’t have to worry about missing a payment or getting hit with a late fee. Plus, you’ll receive a 0.25% interest rate deduction on your loan.
5. Explore Other Repayment Options
If your current repayment plan isn’t sustainable, there are several ways to adjust your monthly payments or overall loan strategy. You could consider loan forgiveness, refinancing to a private student loan, or student loan deferment or forbearance.
Loan Forgiveness
Federal student loan forgiveness programs can reduce or eliminate your remaining balance if you meet specific criteria, such as working in public service or teaching in underserved areas. Programs like Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness reward borrowers who make consistent payments while serving their communities. These options can significantly reduce long-term loan costs for eligible borrowers.
Refinancing to Private Student Loan
When you refinance your student loans, you combine your federal and/or private loans into one private loan with a single monthly payment. This can simplify repayment and might be a smart move if your credit score and income can qualify you for lower interest rates.
With a refinance, you can also choose a shorter repayment term to pay off your loan faster. Or, you can go with a longer repayment term to lower your monthly payments (note: you may pay more interest over the life of the loan if you refinance with an extended term).
If you’re considering a refinance, keep in mind that refinancing federal loans with a private lender disqualifies you from government benefits and protections, such as IDR plans and generous forbearance and deferment programs.
Deferment or Forbearance
Deferment or forbearance can temporarily pause your student loan payments during financial hardship, unemployment, health issues, or other qualifying situations. While these options offer short-term relief, interest may continue to accrue, depending on the loan type. They should be used sparingly and strategically to avoid increasing your overall loan balance.
Again, for loans made after July 1, 2027, borrowers are no longer eligible for deferments based on unemployment or economic hardship.
Recommended: Student Loan Consolidation vs Refinance
The Takeaway
If you have federal student loans, you generally don’t need to start paying them down until six months after you graduate. At that point, you’ll have the opportunity to choose a repayment plan that fits your financial situation and goals. Whatever plan you choose, you’re never locked in. As your finances and life circumstances change, you may decide to switch to a different payment plan, consolidate, or refinance your student loans.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
FAQ
Is there a way to get rid of federal student loans?
If you repay your loans under an income-driven repayment plan, any remaining balance on your student loans will be forgiven after you make a certain number of payments over 20 or 25 years. Other ways to pursue federal student loan forgiveness are through Public Service Loan Forgiveness and Teacher Loan Forgiveness.
What is the best option for repaying student loans?
The best federal student loan repayment plan for you will depend on your goals and financial situation. If you want to pay the least possible in interest, you might want to stick with the standard repayment plan. If, on the other hand, you want lower monthly payments and student loan forgiveness, you might be better off with an income-driven repayment plan.
What happens if you don’t pay federal student loans?
Typically, If you don’t make payments on your loan for 90 days, your loan servicer will report the delinquency to the three national credit bureaus. If you don’t make a payment for 270 days (roughly nine months), the loan will go into default. A default can cause long-term damage to your credit score. You may also see your federal tax refund withheld or some of your wages garnished.
Can you refinance federal student loans into private loans?
Yes, you can refinance federal student loans into private loans, but this means losing federal benefits like income-driven repayment plans and loan forgiveness options. Private lenders offer competitive rates, but eligibility depends on credit score and financial stability. Consider the pros and cons carefully.
How does income-driven repayment affect loan forgiveness?
For loans disbursed before July 1, 2026, income-driven repayment plans can lead to loan forgiveness after 20-25 years of on-time payments, depending on the plan. Payments are based on your income, making them more manageable. However, any forgiven balance may be taxable as income, and you must maintain eligibility throughout the repayment period.
SoFi Student Loan Refinance SoFi Loan Products
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