Consolidation Loan Repayment Options

Generally speaking, there are four repayment options available for your federal consolidation loan, together with an option to extend payments for additional years under each plan. The repayment term is a maximum of 10 to 30 years, depending on your loan balance.

Loan Balance	Maximum Repayment Term
Less than $7,500	10 years
$7,500 - $10,000	12 years
$10,000 - $20,000	15 years
$20,000 - $40,000	20 years
$40,000-$60,000	25 years
$60,000+	30 years

Consolidation Loan Monthly Payments Under Various Repayment Options*
Current Loan Amount	$25,000	$50,000	$75,000
Equal Repayment Plan	$188	$341	$480
Select 2 Graduated Repayment Plan: Years 1-2 Years 3+	$138 $198	$276 $353	$414 $491
Select 5 Graduated Repayment Plan: Years 1-2 Years 3-5 Years 6+	$138 $171 $207	$276 $318 $363	$414 $456 $500

*Estimated payments assume consolidation during grace period at 6.625% and extended repayment terms of 20 years for the $25,000 loan, 25 years for the $50,000 loan and 30 years for the $75,000 loan. Actual rate and payment may vary.

1. Equal Repayment Plan. This option provides equal monthly payments over the term of the loan (generally 10 years).

   Extended Equal Repayment Plan. This option allows up to a 30-year repayment term (depending on your loan balance) of equal monthly payments.

2. Select 2 Graduated Repayment Plan. This option allows for interest-only payments for the first two years of repayment. In the third year, payments increase to level installments of principal and interest for the remainder of the loan (generally 10 years).

   Extended Select 2 Repayment Plan. This option allows up to a 30-year repayment term with the Select 2 Graduated Payment Plan.

3. Select 5 Graduated Repayment Plan. This option allows for interest-only payments for the first two years of repayment. In the third through fifth years, payments increase to include a portion of principal. In the sixth year, payments increase to level installments of principal and interest for the remainder of the loan (generally 10 years).

4. Extended Select 5 Repayment Plan. This option allows up to a 30-year repayment term with the Select 5 Graduated Payment Plan.

5. Income-Sensitive Repayment Plan. This option provides for payments to be adjusted annually based on your expected total monthly gross income from employment and all other sources. Unless you are consolidating together with your spouse, expected total monthly gross income from all sources does not include income earned or received by a your spouse.

   Your account will initially be disbursed on a Select 2 Graduated Repayment Plan. After the consolidation loan is disbursed, you can apply for the income sensitive repayment plan.

   View sample income sensitive repayment plan application.

   Under the income sensitive repayment plan, your monthly payment amount will be the greater of (1) the monthly interest accrual on the loan(s) for which you are requesting an income sensitive repayment schedule and (2) 4% of you total monthly gross income; unless you request a higher amount. Please note that once we determine your payment amount based on this formula, it may be necessary to increase it in order to comply with Federal Regulations that require us to ensure no single installment amount in an income sensitive repayment schedule is more than three times greater than any other installment amount.

• Click here to see how much you can save through Vault's no-obligation loan consolidation service.

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Ask Vault's Expert

Have questions? Please drop Vault's expert, Peter Wilkniss, a line at pwilkniss@vault.com. Peter holds a BA in Economics for the University of Virginia and a JD/MBA from Columbia (with tons of student loans!). He practiced law at Wachtell, Lipton, Rosen & Katz in New York, and held senior financial management positions on Wall Street, before helping start and run a student loan company.