How to Select the BEST Repayment Plan in Two Steps

November 30, 2022

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If you have federal student loan debt, the good news is that you get to choose how to pay it back, and it takes only two simple steps to pick the best plan for you. 

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Develop Your Own “Best” Strategy

There’s no single “best” way to repay your federal student loans. Your “best” plan will be what best fits your life and your financial goals.

Step #1: Set a Student Loan Repayment Goal

Decide what is most important to you when repaying your student loan debt. Your options ultimately include:

Minimize total repayment cost (You’re focused on reducing cost, reducing time and saving money overall.)


Minimize monthly payments (You’re focused on immediate affordability, flexibility and possibly loan forgiveness.)

Step #2:  Select the “Best” Repayment Plan for You

Choose the federal student loan repayment plan that best supports your goal. If you’re focused on total cost or time, you may want to choose one of the Traditional Repayment plans. The Standard, Extended and Graduated plans all fall within this category.  

These plans will likely have a higher monthly payment in comparison to the Income-Driven Repayment plans. The reason for this is because traditional repayment plans base the monthly payment on the term of the loan and amount of debt. The most aggressive plan within the traditional plans is likely the Standard plan. This plan requires the borrower to repay their entire loan balance in 10 years.

If you want to minimize your monthly payment, you may want to select one of the Income-Driven Repayment plans. These plans include Income-Contingent Repayment (ICR), Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE).   

These plans may offer more affordable monthly payments because they limit your monthly payment to 10-20% of your discretionary income (depending on the plan).  Keep in mind, the lower the monthly payment, the longer it may take to repay the debt. More time in repayment allows for more interest to accrue, which can result in a higher total cost; however, borrowers can always choose to make larger payments, without a penalty, and borrowers can ultimately determine the length of time they take to pay off their loans.

Crunch Your Numbers

To see monthly payments, interest costs, and potential forgiveness amounts -- based on your loan debt, use the MedLoans® Organizer and Calculator

You Can Change Your Plan

Ultimately, you are in control of how to repay your student loans, and to a degree, how much it costs to repay your debt. So, start now, set your goals, and then pick the “best” plan for you.

Related Resources

Student Loans and Repayment Strategies 
Loan Repayment and Financial Testimonies of Medical Residents

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