Student Loan Refinancing - Repayment Plans

You Are in Repayment or Deferment Period, Now What?

You will need to choose a repayment plan for Federal student loans. There are a variety of options for repayment of Federal student loans. Current options include:

  • Fixed Repayment Plans

    • Standard Repayment - loan repayment with fixed payments within 10 years

    • Graduated Repayment - loan repayment with gradually increasing payments with payoff within 10 years

    • Extended Repayment - fixed or graduated repayments with payoff within 25 years

  • Income-Driven Repayment (IDR)

    • Saving on A Valuable Education (SAVE) Plan - payment is 10% of discretionary income. If your payment is not large enough to cover the month’s interest payment, the remainder of the interest is forgiven.

    • Pay As You Earn (PAYE) Plan - payment is 10% of discretionary income, but capped at the 10 year Standard Repayment Plan payment amount

    • Income-Based Repayment (IBR) Plan - 10% or 15% of your discretionary income, but capped at the 10 year Standard Repayment Plan payment amount

    • Income-Contingent Repayment (ICR) Plan - payments are the lesser of 20% of discretionary income or a fixed payment plan over 12 years

Which Program is Right for Me?

For most individuals, Loot would recommend an Income-Driven Repayment (IDR) Plan rather than a fixed repayment plan.

  • IDR plans offer insurance against periods of economic hardship

    • Your payment can be reduced when your income is lower or when you add dependents to your family

  • IDR plans offer forgiveness of the remainder of the loan after a 20- or 25-year repayment period. Periods of time when your required payment was $0 or you had an economic hardship can count toward your repayment period in an IDR repayment plan for loan forgiveness calculations.

  • If you qualify for Public Service Loan Forgiveness (PSLF) and plan on pursuing this option, you must use an IDR plan.

Fixed Repayment plans may make sense in certain situations where your income is stable, student loan refinance rates are high, and you do not qualify for PSLF.

All of these recommendations come with an important caveat: legal and political decisions may impact your ability to complete these programs. There is risk that you may not have your loans forgiven due to unforeseen political or legal challenges to the current program. For example, in July 2024 a Federal Court issued a ruling preventing the Federal government from operating the SAVE plan.

Student Loan Refinancing

Student loan refinancing is a large industry with several options for borrowers looking to save on their student loan payments.

Refinancing student loans makes sense in the following situation:

  • Your income is high enough that you won’t get significant reductions in your student loan payment using an IDR plan

  • You do not qualify for PSLF - or - you qualify for PSLF, but your income would result in payment of the total loan within 10 years

  • Refinancing interest rates are less than your student loan interest rate

Additionally, individuals who are unsure about the long-term viability of the IDR plans due to legal and political challenges who also have higher student loan interest rates than current refinancing rates should consider refinancing.


Loot Lasso recommends the following student loan refinancing companies:

(Loot Lasso may earn a commission if you choose to use these links and sign up for the recommended services)

Earnest is one of the first companies formed that focused on student loan refinancing. Earnest will match any rate and by using this link to refinance your loans, you get $200 bonus!

SOFI is also one of the first companies formed that focused on student loan refinancing. SOFI has since grown to a full-fledged bank. SOFI gives discounts to those who are referred by a member. If you would like a link to save (currently $300) on your student loan refinance, click here.

Doctors and dentists, SOFI gives even bigger discounts (currently $1000) when you use my referral link. If you would like a link to save on your student loan refinance, click here.

Due to the rules of the program, I cannot provide a direct link, but I am happy to e-mail you the referral - lickity split.

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Student Loan Refinancing - Types of Loans