What is Standard Repayment?

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By Mark Kantrowitz

June 26, 2020

Standard repayment is a level repayment plan with 120 equal monthly payments over a 10-year repayment term. For borrowers whose debt is less than their annual income, it yields an affordable monthly loan payment.

Standard repayment is the most popular repayment plan for federal student loans, with 42% of borrowers choosing it, followed by 32% in income-driven repayment plans.

There’s a simple rule of thumb for estimating the monthly student loan payments for a 10-year repayment term. Simply drop the two least significant digits from the original loan balance when the student loans entered repayment. For example, the monthly loan payment is $318 for $30,000 in debt, or about 1% of the loan balance, assuming a 5% interest rate on a 10-year repayment term. 

You can get a personalized calculation of the actual monthly loan payment under standard repayment for your loans using a loan calculator.

This table shows the monthly loan payment and total payments for $10,000 in debt on a 10-year repayment term at various interest rates.

Federal student loans have a $50 minimum payment. So, borrowers with low loan balances may repay their loans in less than 10 years using a standard repayment plan. For example, a $2,500 loan at 5% interest will have the calculated loan payment, $26.52, rounded up to $50, causing the debt to be paid off in only 57 payments (4.8 years). 

The shorter repayment term means higher monthly student loan payments, but lower total cost, with the total payments and total interest paid lower than with repayment plans that have longer repayment terms. 

If your total student loan debt is less than your annual income, you can afford to repay your student loans in 10 years or less using the standard repayment plan.

A good place to start:

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