If possible, repaying a student loan while attending college can help save the person the most money. Paying a student loan helps a person develop a good credit history that can save a person even more, when they choose to borrow money in the future. 

A person who has graduated or is about to graduate, can explore options for repaying a student loan now.  

Action to Take:

Find The Loan Servicer – Who owns the loan 

Understand The Grace Period – When payments are due to start 

Estimate The Payments  

Choose a Repayment Plan 

Start Making Loan Payments  

Need Help?

There may be free help in a community to explain which repayment plan a person qualifies for, and which plan may save the most money over time. Call 211 (311 in NYC) and ask if there are free services available to help with student loan repayment options. Online help is also available through TISLA (fair & free student loan advice).

People who have a student loan that is due or those who had selected the Save Plan, need to choose a repayment option before July 1, 2026. Previous student loan payments will apply towards another type of payment plan. It may take up to 3 months to enroll in a repayment plan, so it is best to start now. 

A person who does not take action will automatically be enrolled into the Standard Plan. This could cost more than other repayment plan options that are listed below! 

Types of Repayment Plans: (Eligibility depends upon when the funds were received) 

Fixed Repayment Plans:

• Standard Plan: Payments are a fixed amount that ensures the loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans). This plan might result in a higher monthly payment than other options that a person could select. 
• Extended Repayment Plan: Owe $30,000 or more. Payments can be fixed or graduated and will ensure that the loans are paid off within 25 years. 
• Graduated Repayment Plan: Payments are lower at first and then increase, usually every two years. Payment amounts are designed to ensure the loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).

Income-Driven Repayment (IDR) Plans:

Defaulted loans are not eligible for repayment under IDR plans. 

Months of an economic hardship deferment, payments to certain repayment plans and/or calculated payments of $0 may count toward an IDR plan. Please note: as of 2026, the amount of student loan forgiven in Income-Driven Repayment Plans is now taxable income. 

IDR Monthly Payment:

Pay As You Earn (PAYE) New Borrower Requirement: A new borrower may qualify for the PAYE Plan if they received a disbursement of a Direct Loan on or after Oct. 1, 2011. 

Public Service Loan Forgiveness (PSLF Program): For those who work for a non-profit or a public service job (federal, U.S. Military, state, local, or tribal) or certain non-profit organizations. A nurse, doctor or other medical professional for a non-profit agency), might be eligible for the Public Service Loan Forgiveness (PSLF) Program. 

A person may add up qualifying years they worked an average of at least 30 hours per week – in a year, for a qualifying employer. After making a total of 10 years of qualifying payments, the remaining student loan balance is forgiven. 

Total and Permanent Disability Discharge: A person may qualify for student loans to be discharged. (This means creditors cannot sue, garnish wages, or contact a person for payment.) For example, a Teacher Education Assistance for College and Higher Education (TEACH) Grant* service obligation if they are totally and permanently disabled, and they have a Direct Loan, Federal Family Education Loan (FFEL) Program loan, or Perkins Loan.  

*TEACH Grant service obligations are discharged if the grant recipient dies, or if the recipient is subject to extended periods of qualifying military service. Visit StudentAid.gov/TPD-Discharge.

Important Tax Information:

Loan amounts discharged due to Total Permanent Disability are not considered taxable income by the Internal Revenue Service (IRS) for federal tax purposes. However, certain states may consider the discharged amount to be income for state tax purposes. Check with the state tax office or a tax professional before filing a state tax return.  

Total and Permanent Discharge Information 

Parent PLUS borrowers who haven’t yet consolidated their student loans need to consolidate by 7/1/2026 to possibly qualify for an income sensitive repayment plan or a forgiveness plan. Caution: New parent plus loans received after 7/1/2026 do not allow for an income sensitive or forgiveness plan for any Parent Plus Loan. A person can find their information by going to “My Aid” to view information about all of their federal student loans and other financial aid received and to get contact information for the loan servicer. 

Borrower Defense: Borrowers who have federal student loans and can demonstrate that they enrolled in a school or continued to attend a school based on misleading information from the school or other misconduct covered by the regulation, and suffered a detriment that is of a nature and degree warranting a full discharge of their applicable federal loans may apply for this provision. 

Qualifying for Student Loan Discharge in Bankruptcy 

A person may file for bankruptcy and demonstrate to the bankruptcy court that repaying a student loan would cause undue hardship. This must be decided in an adversary proceeding in bankruptcy court. Creditors may be present to challenge the request. 

If the Court Determines Repayment Would Cause Undue Hardship

What happens next depends on the terms of the bankruptcy court’s determination. The terms may include one of the following: 

• The student loan may be fully discharged, and a person will not have to repay any portion of the loan. All collection activity will stop. 

• The loan may be partially discharged, and the person will still be required to repay some portion of the student loan. 

• The person may be required to repay the loan, with different terms, such as a lower interest rate.

If a Court Does Not Discharge the Loans:

The person can select from the repayment options listed above.