Best Student Loan Repayment Plans (Updated For OBBBA)

Your Loan Servicer

Loan servicers aren’t known for the best customer service. However, a loan servicer can provide you with information about your current loans including your current repayment plan. Best Student Loan Repayment Plans

This is their job, and you’ll have to work with them eventually. Don’t be shy to give them a call or use their online tools.

However, they cannot provide you information about repayment plans that are not active yet – like the RAP plan. If you’re in the SAVE forbearance and trying to decide if you wait for RAP or leave now, they can’t necessarily help you decide that.

Refinancing Marketplaces

Can you easily afford your loan payment on a 10-year repayment plan or are you looking to change your private student loan options? If so, refinancing your debt could make sense. Use a marketplace like Credible to find student loan refinancing options.

You can also look at our list of the top lenders for student loan refinancing here.

Graduated Repayment Option

A graduated repayment plan is a payment program that allows borrowers to pay off loans over a 10-year period. If you’ve taken a Direct Consolidation Loan, the repayment period may last up to 30 years depending on the balance.

Under the Graduated Repayment Plan, payments start low. But your minimum payment increases every two years. Ostensibly, this gives borrowers the ability to adjust their payments as their income rises.

However, this is a plan that seems like the worst of all possible worlds. In many cases, payments under this plan triple over the course of 10 years. Plus, a ton of your payment goes towards servicing interest in the early years, so you’re unlikely to see real progress until your last few years.

In most cases, if you can’t afford your payments right now, an income-driven repayment plan makes the most sense. Best Student Loan Repayment Plans

Standard Plan (Post-July 2026)

For loans originated after July 1, 2026, the default repayment plan will be the updated Standard Plan. This plan is a hybrid of the old standard and extended plans.

Term length varies by loan size:

• Under $25,000 → 10 years
• $25,000–$50,000 → 15 years
• $50,000–$100,000 → 20 years
• Over $100,000 → 25 years

For borrowers in a 10 year version of this plan, it will qualify for Public Service Loan Forgiveness (PSLF), which is a program that forgives the remaining balance on federal student loans after 120 qualifying monthly payments while working in a public service job. However, that doesn’t really help since PSLF is 10 years. Best Student Loan Repayment Plans

Income-Based Repayment (Pre-June 2026)

For borrowers looking for an income-driven repayment plan, and who took out a loan before June 30, 2026, can enroll in the Income-Based Repayment Plan.

If you started borrowing after July 1, 2014, your payment is capped at 10% of your discretionary income, and you will make payments for 20 years. If you borrowed before July 1, 2014, your payments will be capped at 15% of your discretionary income, and your term will be 25 years.

After 20 or 25 years, your loans will be forgiven, but you need to watch out for the tax bomb the year the loans are forgiven.

Previously, to qualify for IBR, your payment under IBR must be less than the payment under the Standard Repayment Plan. However, that “partial financial hardship” requirement was waived with the OBBBA. This is critical for some borrowers pursuing Public Service Loan Forgiveness, since IBR is a qualifying repayment plan. Best Student Loan Repayment Plans

o determine a borrower’s monthly payment, the base payment is divided by 12 and adjusted by subtracting $50 for each dependent reported on the borrowers’ tax return.

If the calculation ends up less than $10 per month, the borrower would pay a minimum of $10/month. Best Student Loan Repayment Plans

The RAP plan is also PSLF-eligible.

It’s important to note that existing borrowers who enroll in RAP will see their long-term IDR loan forgiveness payment counts carry forward. But, if they leave the RAP plan, that time in RAP won’t count towards long term IDR loan forgiveness. They basically don’t want you to take advantage of a lower RAP payment, but then leave for a 20 or 25 year IBR loan forgiveness term, rather than RAP’s 30 year term.

Private Loan Repayment Options

Private student loans don’t have the same repayment plan options that are offered by the Department of Education. Rather, the loan terms are set by your lender when you take out the loan.

Private loans have terms ranging from 1 year to 20 years, and the interest rate can be fixed or variable. We break down the best private loans here so you can see how yours compares.

Most lenders offer some or all of the following types of plans:

• Immediate Repayment – This is where you start making monthly payments immediately
• Deferment In School – This is where your payment is deferred while you’re in school, and typically for 6 months after you graduate
• Set Monthly Payment In School – This is where you have a small, set monthly payment (such as $25) while in school
• Interest Only In School – This is where you pay only your accrued interest each month while in school

It’s important to note that there aren’t really any private student loan forgiveness options either. Best Student Loan Repayment Plans

If you already have private loans, the typical way to change your repayment plan is to simply refinance your student loan into another student loan with better rates or terms. You can find our guide to Student Loan Refinancing here.

Which Repayment Plan Is Right For You?

Once again, the best repayment plan for your student loans is the one that you can afford to make every month.

If you fail to make your monthly payments, not only will your credit score be hurt, but you can see your wages garnished and more. Plus, going into default will see your loan balance automatically rise by about 25% due to accrued interest and collection costs.

The bottom line is to make sure you get in the best repayment plan that works for you!

Next Steps To Enroll

Once you understand the best student loan repayment plan for you, you need to enroll.

Changing student loan repayment plans is relatively easy:

• Login to StudentAid.gov and select “Income Driven Repayment Plan Application”. Note: if you want to enroll in a standard plan, you can only do so by calling your lender.
• Enter the information requested
• Make sure you link your tax return automatically using the IRS data retrieval tool
• You should be enrolled in your new repayment plan in the next several weeks Best Student Loan Repayment Plans

If you need more help with your loans, check out The College Investor forum and ask a question, The College Investor’s sub-Reddit, or our related student loan guides.