What Student Loan Repayment Plan Should You Choose? Take The Quiz

March 25, 2019 · 6 minute read

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What Student Loan Repayment Plan Should You Choose? Take The Quiz

When the time comes for you to begin to pay back student loan debt, options can seem confusing, maybe even overwhelming—so this post (and accompanying quiz) has been created to help you better understand your options and help you decide which repayment plan could work for you.

Student loan repayment options explored here include:

•   Standard Repayment Plan
•   Extended Repayment Plan
•   Graduated Repayment Plan
•   Income-driven repayment plans
•   Student loan refinancing

You can take this quiz to get a better understanding of each option and see example scenarios that could be similar to yours. Want to skip to the answers? You can also check out overviews of the different repayment plans below.

Student Loan Repayment Plan Options

Standard Repayment Plan

If you have federal student loans, the Standard Repayment Plan is essentially the default repayment plan. Payments are a fixed amount and made for up to 10 years at the interest rate you received when you first took out your loan(s).

If you have taken out private student loans, the “standard” repayment plan is whatever you agreed to in your note and the only option that applies to those loans is the student loan refinancing option.

One of the benefits of the Standard Repayment plan is that it saves you money in interest over the life of your loan because, generally, you’ll pay back your loan in the shortest amount of time (10 years) compared to the other federal repayment plans (20 to 30 years).

A common challenge associated with the standard repayment plan is that payments can be too high for some borrowers to manage. Remember that this is the default option when it comes time to set up a repayment plan, so if you would prefer another option, you’ll need to choose one when the time comes to start repaying your loan(s).

One thing to note with the Standard Repayment Plan is that although this plan is qualified for Public Service Loan Forgiveness (PSLF), you cannot receive PSLF unless you are under an Income-Driven Repayment Plan (or IDR—more on that below). If you want to try and qualify for PSLF, it can be a good idea to switch to an IDR plan as soon as possible.

Student Loans Eligible for the Standard Repayment Plan

The following federal loans are eligible for the Standard Repayment Plan :

•   Direct Subsidized Loans
•   Direct Unsubsidized Loans
•   Direct PLUS Loans
•   Direct Consolidation Loans
•   Subsidized Federal Stafford Loans
•   Unsubsidized Federal Stafford Loans
•   FFEL PLUS Loans
•   FFEL Consolidation Loans

Extended Repayment Plan

If payments are too high for you to manage on the standard 10-year repayment plan, you can choose the Extended Repayment Plan for your federal loans, where the term is up to 25 years and payments are generally lower than with the Standard and Graduated Repayment Plans. With this plan you can also choose between fixed or graduated payments.

If you’re eligible, an Extended Repayment Plan can provide significant relief if you are struggling to pay your monthly loan payments by lengthening your term and potentially lowering your monthly payments.

This can help keep you out of default (which is important!). But it is important to remember that lengthening your loan term usually means you will be paying significantly more interest over the life of the loan—because it will take you longer to pay off your loan—and it may not give you the lowest monthly payments, depending on your circumstances. (Read more about eligibility here .)

Student Loans Eligible for the Extended Repayment Plan

The following federal loans are eligible for the Extended Repayment Plan :

•   Direct Subsidized Loans
•   Direct Unsubsidized Loans
•   Direct PLUS Loans
•   Direct Consolidation Loans
•   Subsidized Federal Stafford Loans
•   Unsubsidized Federal Stafford Loans
•   FFEL PLUS Loans
•   FFEL Consolidation Loans

Graduated Repayment Plan

With this plan, you would still pay your federal student loans back over a 10- to 30-year period, with lower payments at the beginning of the term that gradually increase every two years.

The idea behind the Graduated Repayment Plan is that a borrower’s income will likely increase over time, but may not be much to start out (which makes sense, since you’re fresh out of school).

Of course, the income boost may not happen. With this plan, because interest keeps accruing on the outstanding principal balance over a longer period of time, even though you’re making payments, the longer you take to repay your loan(s), the more interest you’ll wind up paying in the end. (Remember, more payments with interest = more interest paid total.) More information about eligibility for the Graduated Repayment Plan may be found here .

Student Loans Eligible for the Graduated Repayment Plan

The following federal loans are eligible for the Graduated Repayment Plan:

•   Direct Subsidized Loans
•   Direct Unsubsidized Loans
•   Direct PLUS Loans
•   Direct Consolidation Loans
•   Subsidized Federal Stafford Loans
•   Unsubsidized Federal Stafford Loans
•   FFEL PLUS Loans
•   FFEL Consolidation Loans

Income-Driven Repayment Plans

Each of the three plans listed above (Standard, Extended, and Graduated) are considered traditional repayment plans. Income-driven repayment plans , though, are different because your student loan payment amount is based upon your income and the size of your family.

To be eligible for an income-driven repayment plan, you’d need to go through a recertification process each year and, each year, your monthly payment could change (increase or decrease) based upon your current income and family size.

Maximum payments are set at 10% or 20% of what’s considered your discretionary income (the difference between 150% of the poverty guideline and your adjusted gross income), depending on the loan and the plan. And, there are multiple types of income-driven plans , including the Income-Based Repayment Plan (IBR), Pay As You Earn Repayment Plan (PAYE), Revised Pay As You Earn Repayment Plan (REPAYE), and Income-Contingent Repayment Plan (ICR).

A significant advantage of using income-driven repayment plans is that your payment can be adjusted to accommodate a lower income. And, in most cases, if you choose one of these plans, any remaining balance after 20 or 25 years may be forgiven if repayment has been satisfactorily made.

Again, the longer you extend your loan term, the more payments (with interest) you’ll be making. Not all loans qualify for this type of program; you’ll need to be vigilant about recertifying for this repayment program and regularly provide updated info to the federal government and, if the remaining portion of the debt is forgiven, you’ll owe taxes on that dollar amount. Visit studentaid.ed.gov to understand which federal loans are eligible for each type of Income-Driven Repayment Plan.

Student Loan Refinancing

If you refinance all of your student loans with a private lender, this means they’d be consolidated (that is, combined) and then refinanced into a brand new loan; not all lenders will refinance federal and private loans together (although SoFi does). This provides the convenience of having just one monthly payment and, if you qualify for a lower interest rate, it can help save significant sums of money for you in the long run.

You typically need a certain credit score to qualify, among other fairly standard lending qualifications (like income and employment verification, among other factors). And, once you refinance your federal loans with a private lender, you lose the opportunity to take advantage of their repayment plans and other benefits like deferment and forbearance.

Refinancing Student Loans at SoFi

At SoFi, you may qualify for a lower interest rate than what you’re paying and select different options for your term. If you currently want to increase your cash flow, you can select a longer term to lower your payments, keeping in mind that you could pay more in interest over the life of your loan if you do this; or, if your goal is to pay off debt more quickly and pay less back in interest overall, you can pick a shorter term.

We charge no application fees. No origination fees. No prepayment fees. No fees, period.

You’ll have access to live customer support, seven days a week, and it takes just two minutes to discover your rate. You can check out an estimate of how much money you could save by using our student loan refinancing calculator, and applying online is streamlined and convenient.

If you’ve decided to refinance your student loans, we’re here to help. Check your rate today!


The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
IMPORTANT: The projections or other information generated by this quiz regarding the likelihood of various outcomes are purely hypothetical, do not reflect actual results and are not guarantees of future results. The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

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