Loan Repayment Options
Congratulations - Graduation is just around the corner! Now is the time to start thinking about the financial transition
from student to graduate. It’s also time to begin planning for your student loan repayment.
You have options – it’s important to understand how to evaluate and use them!
The Brown University Financial Literacy Team is offering sessions to help you plan for loan repayment and manage your
finances. Attendance is strongly encouraged. Visit training.brown.edu to register!
What do I need to know about my loans?
At a minimum, it is important to know the following terms about each loan program:
• Length of grace period and repayment term
• Minimum monthly payment
• Payment options
• Deferment/forbearance options
Where do I find this information?
This information will be found on the Loan Repayment Chart, in your online exit counseling, and in your signed
Length of grace period and repayment term
Once you leave school, your loans will enter a grace period – a length of time when no payments are required. Each
loan will enter repayment at the end of the grace period. The repayment term is the length of time you have to repay
Federal Perkins Loans and Brown University Institutional Loans Repayment Plan Options: These loan programs are
repaid to Brown University. These loans have a fixed monthly payment amount; there are no alternate repayment plans
available. You may view your account information online at https://borrower.ecsi.net.
Federal Direct Loans (Stafford & PLUS): These loan programs are repaid to a federal servicer. These programs offer
varied repayment plan options. Review the following details about each repayment plan and begin thinking about which
plan best meets your individual needs. Once you determine which plan is right for you, contact your servicer to make
your selection. You may determine which agency services your loan online at NSLDS.
It will be helpful for you to have an estimate of how much you borrowed in Federal Direct Loans before reviewing the
repayment plans. Use the calculator links referenced after each plan to get an idea of your estimated monthly
With the standard plan, you will pay a fixed amount each month until your loans are paid in full. The monthly
payments will be at least $50, and you'll have up to 10 years to repay your loans. Under this plan, your monthly
payment may be higher compared to other plans, and your loan will be repaid in the shortest amount of time. You
will also pay the least amount of interest under this plan. This is a good option if you are able to afford the higher
monthly payments. Standard payment calculator
With the graduated plan, your payments start out low and increase every two years. The length of your repayment
period will be up to ten years. The monthly payment will never be less than the amount of interest that accrues
between payments. Although the monthly payment will gradually increase, no single payment will be more than
three times greater than any other payment. This is a good option if you expect your income to be low right after
graduation and increase over time. Graduated payment calculator
With the extended plan, you may extend repayment for up to 25 years. You may choose either fixed payments or
graduated payments. A minimum of $30,000 in Direct Loans is required to be eligible for this plan. The monthly
payments will be lower since the loan will be repaid over a longer period of time. You will pay a significantly higher
amount of interest under this plan. This is a good option if you borrowed a large amount and cannot afford to repay
the loan within 10 years. Extended payment calculator
Income Contingent Repayment (ICR)
With the income contingent plan, the monthly payments will be based on your adjusted gross income (AGI, plus
your spouse's income if you're married), family size, and total amount of your Direct Loans. The maximum
repayment period is 25 years. If you haven't fully repaid your loans after 25 years (time spent in deferment or
forbearance does not count) under this plan, the unpaid portion may be discharged. The discharged amount may be
taxable. Income Contingent payment calculator
Income Based Repayment (IBR)
With the income based plan, the monthly payment is capped at an amount that is intended to be affordable based
on income and family size. You are eligible for IBR if the monthly repayment amount under IBR will be less than the
monthly amount calculated under a 10-year standard repayment plan. Under this plan, your remaining balance after
25 years may be discharged. Additionally, if you work in public service, you may be eligible to have the remaining
balance forgiven after 10 years. (See details of Public Service Forgiveness below) Income based payment calculator
Loan Consolidation: Consolidation is an option for combining your Stafford, PLUS, and Perkins loans into one new loan.
Consolidation can extend your repayment period and potentially lower your monthly payment. However, you will pay a
higher amount of interest by extending your repayment period. Visit LoanConsolidation to learn more.
Public Service Loan Forgiveness: If you are employed in certain public service jobs and have made 120 payments on
your Direct Loans (after October 1, 2007), the remaining balance that you owe may be forgiven. Only payments made
under certain repayment plans may be counted toward the required 120 payments. Federal Perkins Loans and FFEL
loans are not eligible for Public Service Loan Forgiveness, but you may include them in Direct Consolidation and make
If you work in public service, you may be eligible to have your federal loans discharged after 10 years of full-time work. It
is important to save all supporting documents surrounding the qualifying work and payments. Eligible borrowers may
apply upon completion of requirements. There are 4 qualifying areas to ensure eligibility:
Qualifying work: employed full-time for 10 yrs in a public service position while making payments, at the time you
request forgiveness, and at the time the remaining balance is forgiven
Qualifying payments: make 120 on-time payments under the Standard, Income Contingent, or Income Based plans.
Income based repayment leaves the largest balance to be forgiven.
Eligible lender: only eligible lender is Direct Loans; if federal loans are with another lender, can combine into
Federal Direct Consolidation Loan
Eligible loans: Federal Direct Stafford, PLUS, or Consolidation; if you have borrowed Perkins or LDS you may include
them in Federal Direct Consolidation and make them eligible for forgiveness.
Visit StudentAid’s Public Service section for additional details.
Teacher Loan Forgiveness: If you borrowed Direct Stafford Loans after Oct 1, 1998, and are a full-time teacher in a low
income school for 5 consecutive years, you may be eligible to have up to $17,500 of your Stafford loans cancelled. Visit
StudentAid’s Teacher Loan Forgiveness section for details about the program and contact your servicer with any
Federal Perkins Loans are also eligible for Teacher Loan Forgiveness. If you have been teaching in a low income school
district, teach in a special education program or teach in a field considered to have a teacher shortage, please contact
the Brown University Loan Office for information regarding eligibility for this program.
Evaluate Your Options
With so many options, it can be difficult to know which ones are right for your individual situation. Begin by thinking
about what your income and expenses will be after graduation. What will your budget look like?
Once you have an idea of your budget, think about which Direct Loan repayment plan fits your needs. Will you qualify
for forgiveness? Do you need to extend repayment? Or do you prefer to pay the loan as quickly as possible, and pay the
least in interest? You are able to change your selected plan during repayment if your needs change.
Don’t forget about your Perkins and Brown Institutional loans! Remember to include these monthly payment amounts
when figuring out your budget.
Consider consolidation to combine existing loans into one new loan. This is a good option if you are working toward
Public Service Forgiveness and have a Perkins or LDS loan.
Need to postpone repayment?
Each loan program offers different deferment or forbearance options to postpone repayment. These options are meant
to help you manage your loans during times of re-enrollment, unemployment, residency, or financial hardship. If you
face any of these situations, contact your servicer to discuss the options and the application process.
Our next email will include details about the options available by loan type. We’ll also provide guidance about
evaluating and using those options.
Contact Loan Office for guidance
Calculators & information at StudentLoans.gov
Loan Repayment & Deferment chart handouts