Standard Student Loan Repayment Plan

One student loan payment, balanced with your budget.

One student loan payment balanced with your income

Just as the name suggests, a standard repayment program is the most basic consolidation program for federal student loan debt. If you have multiple student loans – even a variety of different types of federal loans – you can combine all of those monthly payments into one low payment.

It’s important to note that a standard repayment program is designed to restructure student debt for someone who is making decent income and doing well enough that they’re not facing financial distress. If you’re facing financial hardship because you’re underemployed or underpaid, then you may be better off with programs designed for people who are struggling. These programs include:

If you’re not sure whether you qualify for at least partial financial hardship in order to use the above programs, we can help you connect with a student loan consultant for a free evaluation.

How to qualify for a standard repayment program

Amongst the five programs available for student loan consolidation, standard repayment is one of the easiest to qualify for because you don’t have to prove you’re struggling. Even if you are making a good salary and making your payments every month without juggling bills or falling behind, you can still consolidate with a standard repayment program.

As long as you have federal student loans (not private) that still need to be paid back, you can put them into this program. It doesn’t matter how big the debt is, how many years ago you took it out or even whether it’s debt for your education or your children’s education, this program should be available to you.

Fact: Parents who take out PLUS loans for their children’s education can use 4 out of 5 student loan consolidation programs.

It should be noted that your loans can’t be in default if you want to use any consolidation program. However, student loan consolidation consultants can usually help you make arrangement to get caught up so you can then qualify for the program. So if your loans are in default, it’s still worth it to talk to someone in order to develop a strategy that gets you into consolidation as quickly as possible.

The following loans can be consolidated with a standard repayment program:

  • Direct loans (subsidized and unsubsidized)
  • Federal Stafford loans (subsidized and unsubsidized)
  • PLUS loans

What to expect when you consolidate

All of the debts you include in the program will be combined. Depending on when you took out your loans and the rules for interest rates in place at the time, you may qualify for lower interest at the same time.

As for the payment schedule, it works just like you see with other loans – the amount you pay each month is directly tied to how much you owe in total. The more debt you have, the more you’ll be expected to pay. So if you have a large amount of debt and you’re not making a lot of money, you may be better off with another program.

One of the biggest differences between this program and the other four is that the payments in a standard repayment program are fixed for the life of the loan. This can be a big benefit for your budget, because you know exactly how much you’ll need each month to cover your student loan debt. You don’t have to worry about your payment switching next month or next year because your salary change or the government adjusted the Federal Poverty Line in your state – something you have to worry about with the hardship programs.

Pop Quiz

What is the maximum amount of time you would have to make payments on consolidated student loan debt?

a) 10 years

b) 15 years

c) 20 years

d) 25 years

Reveal Answer

Tip: The maximum term on all 5 consolidation programs is 25 years. If you make payments for 25 years and have debt left over, any remaining balances are cleared out and forgiven without penalty.

d) 25 years

Return to question

What happens if you have a change in your income?

A standard repayment program is great assuming that you can maintain your financial outlook, but what happens if you change jobs, get fired or have your hours reduced? What happens if something changes and you can no longer afford the payments for your standard repayment program?

It’s actually pretty simple – you can just switch to one of the three hardship-based programs. Even if you have already consolidated your debt on a standard repayment program, you can re-consolidate with an IBR, ICR or Pay as You Earn program as long as you meet the standards to qualify for one of those programs. So even if you have a change in your situation, you aren’t stuck just because you used a standard repayment program.