Repaying Your Loans

When do I begin repaying my loans?

After you graduate, leave school, or drop below half-time enrollment, you have six months before you must begin repaying your loans. This is called the "grace period." Your repayment period begins the day after your grace period ends. Your first payment will be due within 60 days after your repayment period begins.

If you have Direct Subsidized Loans, you won't be charged any interest during your grace period. If you have Direct Unsubsidized Loans, you'll be responsible for the interest charged during your grace period. You may either pay this interest as it accumulates or have it capitalized when you start repaying your loans.

What is the interest rate on my loans?

For Direct and FFEL Stafford Loans disbursed on or after July 1, 2006, the interest rate is fixed at 6.8 percent.

For Stafford Loans disbursed before July 1, 2006, the interest rate is variable and is recalculated every year. The variable interest rate is equal to the rate of 91-day Treasury bills purchased at the final auction held before June 1, plus a certain percentage that depends on when the loan was first disbursed and on the loan’s status. (In all the cases indicated through the link below, the maximum allowable interest rate is 8.25 percent.)


The final auction of Treasury bills held prior to June 1, 2006 resulted in a rate of 4.84 percent. Click here for more detailed information on the 2006-07 interest rates.

What you need to know about repaying student loans...

After you graduate, leave school, or drop below half-time enrollment, you have a period of time before you have to begin repayment. This “grace period” will be

  • six months for a Federal (FFEL) or Direct Stafford Loan.
  • nine months for Federal Perkins Loans

(If you're a parent reading this and you have a FFEL or Direct PLUS Loan, you don't have a grace period-repayment generally must begin within 60 days after the loan is fully disbursed.)

Repayment Plans

There are four repayment plans available. If you do not select one, you will be assigned the Standard Plan.

  • Standard Repayment Plan. With the Standard Plan, you'll pay a fixed amount each month until your loans are paid in full. Your monthly payments will be at least $50, and you'll have up to 10 years to repay your loans.

    The Standard Plan is good for you if you can handle higher monthly payments because you'll repay your loans more quickly. Your monthly payment under the Standard Plan may be higher than it would be under the other plans because your loans will be repaid in the shortest time. For the same reason—the 10-year limit on repayment—you may pay the least interest.

  • Extended Repayment Plan. Under the Extended Plan, you'll still have minimum monthly payments of at least $50, but you can take from 12 to 30 years to repay your loans. The length of your repayment period will depend on the total amount you owe when your loans go into repayment.

    This is a good plan if you will need to make smaller monthly payments. Because the repayment period generally will be at least 12 years, your monthly payments will be less than with the Standard Plan. However, you may pay more in interest because you're taking longer to repay the loans. Remember that the longer your loans are in repayment, the more interest you will pay.

  • Graduated Repayment Plan. With this plan, your payments start out low, then increase, generally every two years. The length of your repayment period will depend on the total amount you owe when your loans go into repayment. If you expect your income to increase steadily over time, this plan may be right for you. Your initial monthly payments will be equal to either the interest that accumulates on your loans or half of the payment you would make each month using the Standard Plan, whichever is greater. However, your monthly payments will never increase to more than 1.5 times what you would pay with the Standard Plan.

  • Income Contingent Repayment (ICR) Plan. This plan gives you the flexibility to meet your Direct Loan obligations without causing undue financial hardship. Each year, your monthly payments will be calculated on the basis of your Adjusted Gross Income (AGI), family size, and the total amount of your Direct Loans. To participate in the ICR Plan, you must sign a form that permits the Internal Revenue Service to provide information about your income to the U.S. Department of Education. This information will be used to recalculate your monthly payment, adjusted annually based on the updated information.

Get Your Loan Information

The U.S. Department of Education's National Student Loan Data System (NSLDS) allows you to access information on loan and/or federal grant amounts, your loan status (including outstanding balances), and disbursements made. Go to

Paying Back Your Loan

You have a choice of repayment plans if you received a FFEL or a Direct Loan. Federal Perkins Loans don't have repayment plan choices; you generally have up to 10 years to repay, however. Your monthly payment will depend on the size of your debt and the length of your repayment period. 

Note to parents: Generally, Direct PLUS Loan borrowers can choose all but the Income Contingent Repayment Plan. FFEL PLUS Loan borrowers usually can choose from among all the FFEL repayment plans. See Funding Education Beyond High School: The Guide to Federal Student Aid and contact your loan holder for details.

Federal Family Education Loans (FFEL) and Federal Perkins Loans

After you've looked at Funding Education Beyond High School: The Guide to Federal Student Aid, if you have specific questions about repaying these types of loans, please contact your loan provider. (In the case of Perkins Loans, this will be the school that made you the loan). Don't know who your loan provider is? Go to to find out.

The information on this site was produced by the US Dept. of Education and has been compiled by the site owners. We are not responsible for accuracy or completeness. Site design (c)2007

Other Topics: