Repayment options are different depending on whether or not you are in default. If you have defaulted on your loans, the Collections section of this website has information on consequences of default and how to get out of default. If you are not in default, there are several pre-default repayment plans described in this section. The good news is that there are a number of flexible and affordable payment plans for federal loan borrowers. You should pay particular attention to the income-driven payment plans. These generally require you to pay more in the long run, but may be needed to keep you current on your payments and out of default.
Switching Repayment Plans
If you have federal student loans, you can change plans to suit your financial circumstances by contacting your lender. FFEL lenders must allow you to switch at least once each year but most will let you switch more often if necessary. Borrowers with Direct Loans may change plans at any time by notifying the Department of Education.
There are some important consequences if you choose to leave the IBR plan. Under current policy, if you choose to leave the IBR plan, you will be required to pay under the standard repayment plan. You do not have to leave IBR, however, if you no longer have a partial financial hardship. You can remain in IBR in these circumstances, but your payment amount will be recalculated. This is a big reason why it’s so important to make sure that you respond to all requests for information from your servicer, including the annual recertification process for IBR.
Distribution of Outstanding Federal Direct Loan Dollars and Recipients by Repayment Plan
Participation in income-driven repayment plans for federal student loans has grown dramatically in recent years. In 2016, 25% of the borrowers in repayment on federal Direct Loans are in programs limiting their payments to an affordable percentage of their disposable incomes, up from just 11% in 2013.