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Education Loan Repayment


I’m worried about paying back my student loans. What can I do?

There are laws that give you options for paying back some student loans. These laws apply only to certain federal student loans, not private loans, but may help you manage the cost of paying back student loans after college or training without undue financial hardship. Two repayment options that may help you are Income-Based Repayment (IBR) and Public Service Loan Forgiveness (PSLF). You can obtain information and plan carefully to make sure that paying back your loans won’t be burdensome.

What is Income-Based Repayment (IBR)?

For the major types of federal student loans, IBR is a repayment plan which will make your monthly payment affordable. If your loan debt is high relative to your income, family size, and state of residence, you may be able to decrease the amount of your monthly bill that you would regularly be required to pay under a standard repayment plan.

The types of loans eligible under the IBR plan are:

  • Stafford Loans;
  • PLUS Loans (but not Parent PLUS loans); and
  • Consolidation Loans made under either the Direct Loan or Federal Family Education Loan (FFEL) program (but not Consolidation Loans that repay Parent Plus loans).

Am I eligible?

You may enter the IBR plan if your loan debt is high relative to your income and family size. You are eligible for IBR if the monthly payment amount calculated under the IBR plan (see below) is lower than your regular monthly payment under a standard repayment plan, based on the greater of the amount you owed on your loans when you were first required to start paying them back or the amount you owe when you apply for IBR.

If you are married and your spouse also has IBR-eligible loan debt, the combined amount of your loan liability and required monthly payments is taken into account.

While your loan provider will calculate to determine your eligibility, you can use the Department of Education’s IBR Calculator to see if you may be eligible.

For more specific information on IBR, go to StudentAid.ed.gov.

What is the Public Service Loan Forgiveness (PSLF) Program?

120 on-time, scheduled, monthly loan payments, not lump sums or advance payments, under either an Income-Based or Income-Contingent repayment plan, the PSLF program will forgive the remaining balance due on your federal student loans. This process may take at least 10 years. Only Federal Direct Loans are eligible for PSLF. If you have an FFEL or a Perkins loan or both, you may consolidate them into a Direct Consolidation Loan to take advantage of PSLF.

For more specific information on PSLF, go to StudentAid.ed.gov.

More Information and Resources

If you aren’t sure what type(s) of loans you have, visit nslds.ed.gov.

For more information on consolidating a FFEL and a Perkins loan and for an electronic application, visit LoanConsolidation.ed.gov.

For more information on different options of repayment plans, visit Federal Student Aid.

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