Graduating from college or university is an exciting milestone, but for many students, it also marks the beginning of loan repayment. Understanding your repayment options can help you manage debt effectively and avoid financial stress. This article explores the most common loan repayment strategies available to graduates.

1. Standard Repayment Plan

The Standard Repayment Plan is the default option for federal student loans. It involves fixed monthly payments over a 10-year period. This plan is ideal for borrowers who can afford consistent payments and want to minimize interest costs over time.

2. Graduated Repayment Plan

The Graduated Repayment Plan starts with lower payments that increase every two years. This option suits graduates who expect their income to rise steadily. While it provides initial flexibility, the total interest paid may be higher than with the standard plan.

3. Income-Driven Repayment Plans

Income-driven repayment (IDR) plans adjust monthly payments based on your income and family size. Popular IDR options include:

• Income-Based Repayment (IBR) – Caps payments at 10-15% of discretionary income.
• Pay As You Earn (PAYE) – Limits payments to 10% of income, with forgiveness after 20 years.
• Revised Pay As You Earn (REPAYE) – Similar to PAYE but available to more borrowers.
• Income-Contingent Repayment (ICR) – Bases payments on income and loan balance.

4. Extended Repayment Plan

Borrowers with over ,000 in federal loans may qualify for the Extended Repayment Plan, which stretches payments over 25 years. While this reduces monthly payments, it results in higher total interest.

5. Loan Forgiveness Programs

Certain professions and public service roles qualify for loan forgiveness after a set period. Examples include:

• Public Service Loan Forgiveness (PSLF) – Forgives remaining debt after 10 years of qualifying payments for government or nonprofit employees.
• Teacher Loan Forgiveness – Offers up to ,500 in forgiveness for educators in low-income schools.

6. Refinancing and Consolidation

Graduates with strong credit may benefit from refinancing private or federal loans to secure lower interest rates. Federal loan consolidation combines multiple loans into one, simplifying repayment but potentially extending the term.

Final Tips for Managing Student Loans

• Review all repayment options before selecting a plan.
• Set up autopay to avoid missed payments and qualify for interest discounts.
• Communicate with your loan servicer if facing financial hardship.

By exploring these repayment strategies, graduates can make informed decisions to manage their student debt responsibly and achieve long-term financial stability.