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Repayment options

What repayment plan is best for you?

Note: The information below is specific to Federal Family Education Loan Program (FFELP) loans. If you have a private loan serviced by HESC and would like additional information regarding your repayment options, please contact us at (800) 366-4372 between 8:00 a.m. – 6:00 p.m. CT, Monday through Friday, or email us at

While enrolled in school at least half-time, Federal Stafford and Grad PLUS Loan borrowers are not required to make loan payments. Upon graduation or dropping below half-time status, these borrowers are eligible to receive a (one time) six-month grace period prior to entering repayment. Parent PLUS Loan borrowers generally begin repayment 60 days after the loan has been fully disbursed; however, parents may be eligible to request an in-school deferment and receive a six-month deferment extension after the student graduates or drops below half-time status.

Once a borrower enters repayment, they are automatically set up on a standard repayment plan. This plan establishes a schedule of equal payments over a 10-year repayment term. During this time, borrowers are required to pay their federal loan(s), including interest, and make at least a $50 minimum monthly payment. (Note: the 10-year repayment term excludes periods of enrollment of at least half-time, grace, deferment and forbearance, if applicable)

Additional repayment options may be available to borrowers. These options include graduated, income-sensitive, income-based and extended repayment. You can learn more about each plan below. To enroll in a different repayment plan, visit our forms page to download the appropriate application.

Standard Repayment
Standard repayment establishes a schedule of equal payments over the life of the loan. Borrowers are automatically assigned this repayment plan once they enter repayment unless a different plan is requested.

Graduated Repayment
Graduated repayment allows borrowers to begin repaying their loan(s) at a lower payment amount than normal. Every two years, the payment amount will increase until the balance of the loan is repaid within the maximum repayment term applicable to the loan. Your monthly payments will never be less than the amount of interest that accrues between your payments, and they will never be more than three times greater than any other payment. Overall, borrowers will pay more in interest, but the initial payments are lower than the standard repayment plan.

Income-Based Repayment
Income-based repayment is an option effective July 1, 2009, for borrowers who experience a partial financial hardship (as explained below). Under this plan, your required monthly payment amount is determined by your annual gross income (AGI) and the poverty level associated with your family size and state of residence. If your total annual student loan payments are greater than 15% of the difference between your AGI and 150% of the poverty level applicable to you, you are considered to be experiencing a partial financial hardship and are eligible for the income-based repayment plan.

Example: For 2022, 150% of the poverty level for a family of one living in Texas was $20,385. A borrower with an AGI of $40,000 would have a partial hardship if their annual student loan payments were greater than $2,942 or $245 per month ($2,942 is 15% of the result from subtracting $20,385 from $40,000).

The maximum repayment period under this plan may exceed 10 years. If after 25 years of qualifying payments your student loan balance is not paid in full, your remaining balance will be forgiven. The income-based repayment plan is not available for a Parent PLUS Loan(s), consolidation loan(s) that repaid any Parent PLUS Loan, or any defaulted loan(s).

Income-Sensitive Repayment
With this option, the monthly payment amount is adjusted annually to reflect changes in income, based on the borrower’s total monthly income and total student loan debt. This option may be used for a maximum of five years at which time the borrower’s account(s) will convert to graduated or standard payments. Under this option, the borrower is required to provide documentation of income on an annual basis. If documentation of income is not provided each year, the loan(s) will be placed on a standard repayment schedule.

Extended Repayment
Extended repayment allows borrowers to extend their standard or graduated repayment plan for up to 25 years. This plan is only available to "new borrowers" whose federal loan(s) was disbursed on or after Oct. 7, 1998, and who have an outstanding Federal Family Education Loan (FFELP) balance of principal and interest totaling more than $30,000.

Repayment forms

Additional Information

To learn more about "How to Repay Your Loans," visit the links below from Federal Student Aid.