Standard Repayment Plan

The Standard Repayment Plan is the default option for federal student loans. You make fixed monthly payments for 10 years (120 payments) until the loan is completely paid off. This plan pays the least interest over time but requires the highest monthly payment.

How It Works: Your payment amount is calculated so that you'll pay off your loan in exactly 10 years, including principal and interest. Payments stay the same every month (unlike income-driven plans).

Example: $30,000 loan at 5% interest = $318/month for 10 years

• Total paid: $38,184
• Interest paid: $8,184

Compare to 25-year income-driven plan: $212/month initially but $50,000+ total paid.

Advantages: ✅ Lowest total interest cost ✅ Debt-free in 10 years guaranteed ✅ Predictable fixed payments ✅ Builds credit history with consistent payments ✅ Qualifies for PSLF (Public Service Loan Forgiveness)

Disadvantages: ❌ Highest monthly payment ❌ No payment based on income ❌ Can strain budget for first 5-10 years of career

When to Choose Standard:

• You can afford the monthly payment
• You want to minimize total interest paid
• You value being debt-free faster
• Your income is stable and sufficient
• You're pursuing PSLF (10 years = 120 qualifying payments)

When to Avoid:

• Payments exceed 15% of take-home pay
• You need flexibility (consider income-driven plans)
• You're experiencing financial hardship

Alternative: Extended Repayment (25 years, lower payments, more interest) or Income-Driven Repayment (based on income/family size).