What you pay depends on your loan type and the repayment plan you choose
Student loan payments are not one fixed amount. What you owe each month depends on three things: whether your loans are federal or private, which repayment plan you selected (if federal), and your loan balance. Federal loans offer multiple repayment plans with different monthly amounts and forgiveness timelines. Private loans typically have one payment structure set by your lender. You can change federal repayment plans at any time, but private loan terms are locked in your promissory note.
Federal loans do not require payment while you are in school at least half-time. Private loans often do, even during enrollment. After graduation or when you drop below half-time status, a six-month grace period applies to most federal loans before your first payment is due. Private loans may have no grace period at all. Understanding which type you hold and when payment begins is the first step to managing what you owe.
Key Takeaways
- Federal student loans offer six repayment plans with different monthly amounts, ranging from 10 years of fixed payments to 20 or 25 years with income-based amounts.
- Private student loans have one payment structure per loan, set by your lender, and typically cannot be changed once the loan is disbursed.
- Federal loans enter a six-month grace period after you graduate or drop below half-time enrollment; private loans may require payment when ready.
- You can pause federal loan payments through deferment or forbearance, which temporarily stops or reduces what you owe each month.
- Income-driven repayment plans for federal loans cap your monthly payment at a percentage of your discretionary income, which may be as low as $0.
Federal repayment plans and how monthly payments are calculated
The U.S. Department of Education offers six federal repayment plans. The Standard Repayment Plan charges a fixed amount each month for 10 years. The amount depends on your total loan balance; the department's loan simulator at studentloans.gov can estimate it. Most borrowers pay between $100 and $300 monthly under this plan, though balances above $60,000 can result in higher amounts.
Four plans tie your payment to your income: Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR). These plans calculate your monthly payment as a percentage of your discretionary income — the difference between your adjusted gross income and 150 percent of the federal poverty line for your household size. PAYE and REPAYE cap payments at 10 percent of discretionary income. IBR caps them at 10 or 15 percent depending on when you took out the loan. ICR uses a different formula and typically results in higher payments. All four plans extend repayment to 20 or 25 years, meaning your balance may not shrink as quickly as under the Standard plan.
The Graduated Repayment Plan starts with a lower payment and increases every two years over 10 years. It is designed for borrowers who expect their income to rise. Your first payment is typically lower than the Standard plan, but your final payments are higher.
You choose or change your plan by logging into your federal loan servicer's website or calling them directly. Your servicer's contact information appears on your loan statements. Changing plans takes effect the next billing cycle, usually within 30 days.
Private student loan payments and lender requirements
Private loans are issued by banks, credit unions, and online lenders, not the federal government. Each lender sets its own repayment terms, which are written into your promissory note when you sign. Most private loans require monthly payments starting either while you are in school or after a grace period of six months to one year. Some lenders offer in-school deferment, meaning you can delay payments until after graduation, but this is not may provide.
Private loan payments are typically fixed — the same amount every month for the life of the loan. The amount depends on your loan balance, interest rate, and loan term (usually 5 to 20 years). A $30,000 private loan at 7 percent interest over 10 years might cost around $350 per month, but this varies by lender and rate. You can contact your lender or check your promissory note to see your exact payment amount and start date.
Unlike federal loans, you cannot change your private loan repayment plan after the loan is disbursed. If you want a different payment structure, your only option is to refinance with a new lender, which creates a new loan and new terms. Refinancing may lower your rate if your credit has improved, but it also resets your loan term and may extend how long you pay.
Grace periods and when your first payment is due
Federal loans include a six-month grace period after you graduate, leave school, or drop below half-time enrollment. During this time, you do not have to make payments. Interest still accrues on unsubsidized loans, meaning it is added to your balance, but subsidized loans do not accrue interest during the grace period. Your servicer will contact you before the grace period ends to tell you when your first payment is due.
Private loans vary by lender. Some offer a grace period of six months to one year; others require payment to begin when ready or while you are still in school. Check your promissory note or contact your lender to confirm when your first payment is due. If you are still in school and your private lender requires payments, you may be able to make interest-only payments to reduce how much interest accrues before repayment begins in full.
Deferment and forbearance: pausing or reducing payments
If you cannot afford your federal loan payment, you can temporarily pause or reduce it through deferment or forbearance. Deferment stops your payment obligation for up to three years in certain situations: unemployment, economic hardship, enrollment in school, or military service. During deferment of subsidized loans, interest does not accrue. During deferment of unsubsidized loans, interest accrues but you do not have to pay it.
Forbearance pauses your payment for up to three years when you do not meet the conditions for deferment but still cannot pay. Interest accrues on all loans during forbearance, and you are responsible for it. Both deferment and forbearance are temporary; your payment resumes when the period ends. You must request deferment or forbearance from your federal servicer; they do not happen automatically.
Private loans do not have deferment or forbearance programs set by law. Some lenders offer temporary payment reductions or pauses during hardship, but terms vary widely. Contact your private lender directly to ask what options exist if you cannot pay.
Interest rates and how they affect what you pay
Federal student loan interest rates are set by Congress and change each year for new loans. Rates for loans disbursed in the 2024–2025 academic year are fixed for the life of the loan. Undergraduate loans carry one rate, graduate loans another, and Parent PLUS loans a third. These rates do not change after disbursement. Your loan statement shows your rate; you can also find current rates on studentloans.gov.
Private loan interest rates depend on your credit score, income, and the lender. Rates can be fixed or variable. A fixed rate stays the same for the life of the loan. A variable rate changes periodically, usually tied to a market index, which means your payment may increase or decrease over time. Your promissory note specifies which type you have. If you have a variable-rate private loan, your lender must notify you before your rate changes.
Interest accrues daily on both federal and private loans. The longer you take to repay, the more interest you pay overall. Paying more than your minimum monthly payment reduces your balance faster and saves you money in interest, but it is not required.
Making payments and setting up automatic payments
Federal loan payments are made to your loan servicer, not directly to the Department of Education. Your servicer is the company that manages your account and collects your payments. You can find your servicer's name and contact information on your loan statements or by logging into studentloans.gov. Most servicers accept payments online through their website, by phone, by mail, or through automatic bank transfers.
Setting up automatic payments (autopay) is the most reliable way to may support you do not miss a payment. Most servicers offer a small interest rate reduction — typically 0.25 percent — if you enroll in autopay. You authorize your servicer to withdraw your payment from your bank account on a date you choose, usually around your payday. You can change or cancel autopay at any time.
Private loan payments go to your lender. Check your promissory note or your lender's website for payment instructions. Most private lenders also offer online payment, autopay, and phone payment options. If you have multiple private loans from different lenders, you will make separate payments to each one.
What happens if you miss a payment
Missing a federal loan payment triggers a series of consequences. Your loan enters delinquency as soon as a payment is one day late. After 90 days of delinquency, the late payment is reported to credit bureaus, damaging your credit score. After 270 days (about nine months) of delinquency, your loan goes into default. Once in default, your entire remaining balance becomes due when ready, your tax refunds can be seized, and your wages can be garnished.
If you miss a payment, contact your servicer when ready. You can catch up by paying the missed amount, or you can request deferment or forbearance to pause payments while you stabilize your finances. Rehabilitating a defaulted loan requires nine consecutive on-time payments within 20 days of the due date, after which the default status is removed from your credit report.
Private loans have similar consequences: delinquency after one missed payment, default after 120 days, and potential wage garnishment. However, private loans have no rehabilitation program. Once in default, your only path forward is to pay the full amount owed or negotiate a settlement with your lender.
Frequently Asked Questions
Can I change my federal repayment plan if my income changes?
Yes. You can switch between federal repayment plans at any time by contacting your servicer or using their website. If you move to an income-driven plan, you must recertify your income annually so your payment is recalculated based on your current earnings. Income-driven plans are especially useful if your income drops, as your payment may decrease or become $0.
What is the difference between subsidized and unsubsidized federal loans?
Subsidized loans do not accrue interest while you are in school at least half-time or during deferment. Unsubsidized loans accrue interest from the moment they are disbursed. Both have the same repayment plans and grace periods after graduation. If you have both types, your servicer will explore your payment to unsubsidized loans first.
Do I have to pay my student loans while I am in school?
Federal loans do not require payment while you are enrolled at least half-time. Most private loans also do not, but some do. Check your private loan promissory note or contact your lender. If your private lender requires payment, you can often make interest-only payments to reduce how much interest accrues before full repayment begins.
What happens to my student loans if I die or become permanently disabled?
Federal loans can be discharged (forgiven) if you become permanently and totally disabled or if you die. Your family or representative must submit documentation to your servicer. Private loans do not have automatic discharge for disability or death; your estate remains responsible for the debt unless your promissory note includes a death or disability clause.
Can I pay off my student loans early without a penalty?
Federal loans have no prepayment penalty. You can pay as much as you want toward your balance at any time, and the extra payment reduces your principal when ready. Most private loans also have no prepayment penalty, but some do. Check your promissory note or contact your lender to confirm.