Home Financial Aid Tips Choosing the Best Loan Repayment Plan for You
Choosing the Best Loan Repayment Plan for You

Choosing the Best Loan Repayment Plan for You


By Ryan Laspina
Analyst, Red Flags and External Reviews at

The prospect of paying back your student loan debt can be daunting. But the Department of Education (ED) has numerous repayment plans to make this process less stressful.

How do you know which repayment plan is right for you? Here are some guidelines.

Consider Your Income and Expenses

The first thing you should consider is what your financial situation will be when you have to start repaying your loans. Can you afford the standard monthly payment? Are you struggling to find gainful employment? Have you saved up enough money to put toward your loan debt?

Your answers to these questions will help you determine which loan repayment plan is available to you and best for you. In addition, the ED offers a repayment calculator that can aid you in your decision.

Know How Much You Owe

Some other things to determine are the number of your outstanding student loans, the total amount of your loan debt and how much interest has accrued on that debt. The best way to gather this information is to visit the National Student Loan Data System (NSLDS) website and view your federal student loan history.

Contact Your Loan Servicer

Your loan servicer can provide answers to all your questions regarding your Federal Student aid loans and repayment options. You can find your loan servicer by visiting the NSLDS website.

If you have multiple servicers, ask one of them about consolidating your student loans into one comprehensive loan. Depending on your situation, consolidation can reduce your loan debt and give you one monthly payment.

Find a Repayment Plan That Fits Your Budget

As we all know, loans accrue interest. Think about how much interest you are willing to pay on your loans.

Repayment plans that pay the loan off more quickly (such as the standard plan) accrue less interest than repayment plans with a long life and smaller monthly payments. The quicker you get your loan paid off, the less interest you accrue. Check the Student Loans website to see all of the repayment options.

Choosing a loan repayment plan is a personal choice that requires some thought and evaluation. The ED and its loan servicers offer several repayment plans. If you have questions about what repayment plan is best for you, contact your loan servicer(s) and provide them with information about your current financial situation.