When do I start making student loan repayments?

1 min readLast updated February 29, 2024by Rachel Carey

This article will take you through everything you need to know about making your student loan repayments.

Summary 

  • For federal loan recipients, you do not have to start paying back your student loans until six months after graduation.  

  • Student loan repayment restarted in October 2023. 

  • There are many ways to repay your student loans based on your unique circumstances and which is the best option for you.  

  • Getting good financial advice and developing a financial plan is the best place to start when planning your student loan repayments.  

When do student loan repayments start? 

For federal loan recipients, you do not have to start paying back your student loans until six months after graduation.  

For those who are repaying student loans, President Trump placed a pause on repaying federal student loans during the pandemic in March 2020.  

This was then extended to December 31, 2022, by the Biden administration.   

However, repayments began again in October 2023, with interest accruing again from September 1, following a Supreme Court ruling against President Biden’s student debt relief plan.   

How do student loan repayments work?  

When you do so, there are many different ways to repay, including:  

  • Standard repayment plans: Graduates will make equal monthly repayments for 10 years. You are automatically enrolled in this plan when you take out your student loan.   

  • Graduated repayment plans: The amount you repay monthly will increase every two years over 10 years. This is due to newly graduated students' salaries increasing over time.   

  • Extended repayment plans: This is similar to the graduated repayment plans but allows you to extend your repayment time from 10 to 25 years. This reduces the monthly amount you pay but increases the amount of interest you owe.   

  • Income-driven repayment (IDR) plans: The amount you pay is tied to a portion of your income. You can also extend the repayment time to 20 or 25 years. Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 or 25 years, depending on when you received your first loan. There are multiple types of IDR plans, which are detailed below.  

It’s important to remember federal student loan recipients can change their repayment plan for free once every year, subject to certain circumstances.   

For private student loan recipients, repayments depend entirely on the lender, with repayment terms agreed upon when you take out the loan. 

What are the different types of IDR plans? 

There are four different types of IDR plans:  

  • Saving on a Valuable Education (SAVE) plan  

This is the newest IDR plan and replaces the previous Revised Pay As You Earn (REPAYE) plan. With this new plan, you pay 5% of your monthly discretionary income. 

The new plan also places a new threshold for how your discretionary income is calculated – your household income minus 225% of the federal poverty guideline for your family size and location. 

The previous plan was 150%. Any remaining debt after 20 or 25 years is forgiven, and if you have a smaller loan amount under $12,000, the debt is forgiven after 10 years of repayments.  

  • Pay As You Earn Repayment (PAYE) plan 

 You pay 10% of your monthly discretionary income but never more than the 10-year standard repayment plan amount. Any remaining debt after 20 years is forgiven.  

  • Income-Based Repayment (IBR) plan 

If you’re a new borrower on or after July 1, 2014, you pay 10% of your discretionary income per month but never more than the 10-year standard repayment plan amount. Any remaining debt after 20 years is forgiven. 

If you’re not a new borrower on or after July 1, 2014, you pay 15% of your discretionary income per month but never more than the 10-year standard repayment plan amount, and any remaining debt after 25 years is forgiven.  

  • Income-Contingent Repayment (ICR) plan  

You pay 20% of your discretionary income or what you would pay on a repayment plan with a fixed payment over 12 years, which is adjusted according to your income. Any remaining debt after 25 years is forgiven.  

How do I prepare to make student loan repayments?  

After three years of no repayments, making repayments again, or for the first time, is a big adjustment. Waving goodbye to part of your paycheck may be a bitter pill to swallow.   

One of the first and most important things to do when making repayments is to contact your loan provider. 

As repayment dates differ depending on who manages your loan, they can tell you when payments are due and how much you will have to pay.   

You can also speak to your loan provider about payment plans that work best for you.   

This will allow you to start budgeting and preparing for repayments rather than have them sneak up on you.   

Get expert financial advice 

Seeking the right financial advice can also make a big difference to your repayment plan and can prove far more valuable than the price of not finding the advice you need. 

Getting expert advice is for everyone and getting it before financial situations get dire could save you a lot of money.  

If you’re wondering how to repay your student loans, seeking expert advice is best. 

 Financial advisors are on hand to provide advice and guidance, taking the time to learn all about your situation to create a tailored plan so you can meet your financial goals.  We can connect you to a trusted financial advisor tailored to your needs.   

Find an expert advisor.    

Senior Content Writer

Rachel Carey

Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.