Student Loan Repayment: The Options That Actually Exist

Federal loans offer a menu—income-driven plans, forgiveness timelines, deferment. Private loans typically come with almost nothing. Know which you hold first.

The federal menu

Income-driven repayment caps federal payments at a share of discretionary income and forgives the remainder after 20–25 years of qualifying payments. For low-income years, IDR beats forbearance—which just lets interest compound while you look away.

Public Service Loan Forgiveness forgives the balance after 120 qualifying payments while working for government or 501(c)(3) employers. The program’s administrative horrors are real; the approvals are also real. Certify employment annually.

Private loans and refinancing

Private loans offer none of that. Refinance only when a materially lower rate meets solid income. Refinancing federal into private is a one-way door that surrenders IDR and forgiveness forever.

Extra payments on any loan go to principal, not future payments—always verify the servicer applied them correctly. Servicer errors are common; only you are checking.