 TITLE: How to Choose the Best Student Loan Repayment Plan for You CONTENT: If you have federal loans, you may have up to seven different repayment plans from which you can choose. Depending on the plan you choose, your payments may remain the same throughout the life of your loans, or they may change over time.\nHere's what you need to know about each plan.\n### Standard Repayment Plan\nThis is the plan you typically start out on when you first get federal loans. Your payments remain fixed for the life of your loan, which is typically 10 years but can be as much as 30 years if you consolidate your loans.\nAll federal student loan borrowers can choose this plan.\n### Graduated Repayment Plan\nWith this plan, you can keep the 10-year repayment term but start off with lower payments and have them increase—usually every two years—over time. If you consolidate your loans, you can extend the term to up to 30 years.\nAll federal student loan borrowers can opt for graduated repayment.\n### Extended Repayment Plan\nExtended repayment allows you to lengthen your repayment term to up to 25 years. Depending on which option you choose, you can have fixed or graduated payments during that time.\nTo qualify for this plan, you need to have at least $30,000 in federal student loan debt.\n### Revised Pay As You Earn Repayment Plan (REPAYE)\nThe REPAYE plan is the first of four income-driven repayment plans. Your monthly payment will be 10% of your discretionary income, which is calculated as the difference between your annual household income and 150% of the poverty guideline for your family's size and state of residence.\nYour payments will be recalculated every year as your income and family size changes. Your repayment term will also increase to 20 or 25 years, depending on the type of loans you have, and any amount that's left over at the end of the term will be forgiven. Note, however, that any amount that's forgiven under an income-driven repayment plan may be considered taxable income.\nMost federal loan borrowers can qualify for the REPAYE plan. However, parents who take out PLUS loans are not eligible.\n### Pay As You Earn Repayment Plan (PAYE)\nSimilar to the REPAYE plan, the PAYE plan sets your monthly payment at 10% of your discretionary income. The biggest difference is that while your payment can increase as your income increases, it will never be set higher than what you would have paid on a 10-year standard repayment plan. Your payments are recalculated each year.\nAlso, to qualify for this plan, you need to show financial need, specifically that you have a high debt burden relative to your income. Your repayment period will be extended to 20 years, and anything that's not paid off by that time will be forgiven.\nParents with PLUS loans are not eligible for the PAYE plan.\n### Income-Based Repayment Plan (IBR)\nWith this plan, your monthly payment will be set at either 10% or 15% of your discretionary income, depending on when you received your first loans. As with the PAYE plan, your monthly payments will never be higher than what they'd be on a 10-year standard repayment plan.\nPayments are recalculated each year, and your repayment term will be extended to 20 or 25 years, again depending on when you first got your loans. After that time, the remainder will be forgiven.\nTo qualify for an IBR plan, you'll need to prove that you have high debt relative to your income. As with the other income-driven repayment plans so far, parent PLUS loans are ineligible.\n### Income-Contingent Repayment Plan (ICR)\nThe ICR plan is available to all federal loan borrowers, including parents with PLUS loans. You don't need to prove financial need, and your monthly payment will be the lesser of:\n*   20% of your discretionary income, which is calculated as the difference between your income and 100% of the poverty guideline.\n*   The amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income.\nPayments are recalculated each year, and any amount that's left over after 25 years will be forgiven. END