When you enter repayment on your loans, ask your loan holder about repayment plans and incentives that they offer. Stafford loan lenders offer four different kinds of repayment plans:

1. The Standard Repayment Plan requires you to pay a fixed amount each month -- at least $50 -- for up to 10 years. The length of your actual repayment period will depend on your loan amount.



2. The Extended Repayment Plan allows you to extend loan repayment over a longer period (usually 12 to 30 years, depending on your loan amount) if your outstanding principal and interest in FFELP loans totals more than $30,000. Your monthly payment might be lower than it would be if you repaid the same total loan amount under the Standard Repayment Plan, but you will repay a higher total amount of interest over the life of your loan because the repayment period is longer. The minimum monthly payment is $50.



3. Under the Graduated Repayment Plan, your payments will be lower at first and then increase, usually every two years. The length of your repayment period cannot exceed 10 years (or 25 years for borrowers eligible for an Extended Repayment Plan). Your monthly payment may range from 50 percent to 150 percent of what it would be if you were repaying the same total loan amount under the Standard Repayment Plan.



4. The Income Sensitive Repayment Plan bases your monthly payment amount on your expected monthly gross income. The length of your repayment period cannot exceed 10 years.

You are allowed to change your repayment plan at least once every 12 months. Your repayment plan will not change unless you request a change. If you do not choose a repayment plan when you first begin repayment, you will repay under the Standard Repayment Plan.

Many lenders also offer repayment incentives. It is common in the industry to offer a percentage rate decrease if you get set up to have your monthly payment automatically deducted from your checking account. It is also common for a lender to offer a lower interest rate after you have made a certain number of on-time payments in a row. Before you choose a Stafford loan lender, you may want to ask them what repayment incentives they offer.