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.
Mark Kantrowitz is a nationally-recognized expert on student financial aid, scholarships and student loans. His mission is to deliver practical information, advice and tools to students and their families so they can make informed decisions about planning and paying for college.
Mark writes extensively about student financial aid policy. He has testified before Congress and federal/state agencies about student aid on several occasions.
Mark has been quoted in more than 10,000 newspaper and magazine articles. He has written for the New York Times, Wall Street Journal, Washington Post, Reuters, Huffington Post, U.S. News & World Report, Money Magazine, Bottom Line/Personal, Forbes, Newsweek and Time Magazine. He was named a Money Hero by Money Magazine. He is the author of five bestselling books about scholarships and financial aid, including How to Appeal for More College Financial Aid, Twisdoms about Paying for College, Filing the FAFSA and Secrets to Winning a Scholarship.
Mark serves on the editorial board of the Journal of Student Financial Aid and the editorial advisory board of Bottom Line/Personal (a Boardroom, Inc. publication). He is also a member of the board of trustees of the Center for Excellence in Education. Mark previously served as a member of the board of directors of the National Scholarship Providers Association.
Mark is currently Publisher of PrivateStudentLoans.guru, a web site that provides students with smart borrowing tips about private student loans. Mark has served previously as publisher of the Cappex.com, Edvisors, Fastweb and FinAid web sites. He has previously been employed at Just Research, the MIT Artificial Intelligence Laboratory, Bitstream Inc. and the Planning Research Corporation.
Mark is President of Cerebly, Inc. (formerly MK Consulting, Inc.), a consulting firm focused on computer science, artificial intelligence, and statistical and policy analysis.
Mark is ABD on a PhD in computer science from Carnegie Mellon University (CMU). He has Bachelor of Science degrees in mathematics and philosophy from MIT and a Master of Science degree in computer science from CMU. He is also an alumnus of the Research Science Institute program established by Admiral H. G. Rickover.
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