6Student Loan Payment Strategies to Keep You in Good Standing

The federal government offers several different student loan payment strategies to keep your accounts in good standing. Other than making a regular monthly payment, the government offers: graduated repayment plans, income sensitive repayment plans, extended repayment plans, several deferment options, and forbearance. Each one of these plans will keep you in good standing, provided you are able to file the appropriate paperwork according to the guidelines. 

Graduated Repayment Plans

These repayment plans start with low payments that gradually increase every two years. This helps people who are able to make payments adjust to the commitment gradually. These loan terms vary from 12 to 30 years. The loan payment cannot be less than half of what the standard repayment plan has it, and it cannot be more than 150% of what the standard payment plan calls for. Your account is in good standing so long as payments are made on time.

Income Contingent Repayment Plans

Available for Direct borrowers only, this plan extends the loan term to up to 25 years, and makes payments based on the borrower's income. The payments change every year as the borrower’s income changes. At the end of the 25 years, the remaining loan balance is discharged under current tax law. As long as your payments are made on time, your account remains in good standing. 

Income Sensitive and Income Based Repayment Plans

This plan designates a percentage of gross income as a student loan payment. The loan term is 10 years. As income grows, the payment amount grows. The Income Based Repayment Plans work much like the income contingent plan, except it works for both FFEL and Direct programs. The payments are capped at a lower percentage of income, yet allow for less discretionary income.

Extended Repayment Plans

The extended repayment plans change your repayment from 10 years to 25 years, to make the payments lower and more manageable. These plans are suited for people who have the means to make some form of payment, but who cannot handle the full payment they way they want and otherwise do not want to do income sensitive or graduated repayment plans.


If you cannot make payments at all, because you are in the military, in school or you do not have the means to make the payments, you may be eligible for a deferment. Deferments stop your payments for 12 months, to allow you to get your finances back on track and make payments again. This does not apply to private loans, which must be placed in deferment with the lender directly. You may still have to make payments on private loans to keep those accounts in good standing.


Like deferment, forbearance stops payments and keeps the account in good standing, but only stops payments for a period of time you designate. It must be approved by the lender and a limited amount of time can be taken throughout the course of the loan term. This does not apply to private loans, which must be placed in forbearance with the lender directly. You may have to make payments on those loans to keep them in good standing.

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