Standard Repayment Plan
This is the default repayment plan and will take effect if you do not choose an alternative option. Payments are set at a fixed amount, and the loan is repaid over a period of up to 10 years (or up to 30 years for consolidated loans).
Advantages:
- Shorter repayment period
- Lower overall loan cost
- Available for all types of federal student loans
Disadvantages:
- Monthly payments are not based on income or earning ability and may be higher than other plans
- Low-income borrowers may find the standard repayment plan’s payments unsustainable
- Not ideal for borrowers seeking public service loan forgiveness
Graduated Repayment Plan
Initial payments start low and gradually increase, usually every two years. Similar to the standard repayment plan, you will pay this amount for up to 10 years or up to 30 years for consolidated loans.
Advantages:
- Payments start low and increase over time
- Student loans are repaid within just 10 years
- Available for most federal student loans
Disadvantages:
- The total loan cost may be higher than the standard repayment plan
- Higher loan balances in the case of consolidated loans may lead to longer repayment periods
- Payments may become unsustainable if income does not increase in parallel
Loan Consolidation
Loan consolidation is the process of combining multiple loans into one debt, with a single payment. Consolidating federal loans gives you the option to change repayment plans.
Advantages:
- May lower payments and give you up to 30 years to repay student loans
- Turns variable rate loans into fixed rates
- Consolidation can make income-driven repayment plan options available
Disadvantages
Source: https://www.thebalancemoney.com/federal-student-loan-repayment-plans-4140729
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