How to Pick the Best Debt Repayment Plan in 2024

According to the latest data, the total outstanding student loan debt in the United States has reached a staggering $1.63 trillion. With millions of individuals diligently making payments towards their loans, it is crucial to select the best debt repayment plan based on your unique circumstances.

You finally obtained your college degree, and now you are trying to figure out the best loan repayment plan. It’s never easy to start paying your student loans, especially right after graduating and being unemployed or making minimum wage. Depending on your financial aid situation, the answer to the best debt repayment plan question may vary.

This process can be overwhelming and scary, but we have good news — the right repayment plan can save you a ton of money! So what are the best?

Income-driven or standard repayment plans are typically your best bet. 

Debt Repayment Plans

When it’s time to repay your loans, you have the option to choose the repayment plan that works best for you. 

There are two options when it comes to your federal student loans: Standard Repayment plans and Income-Drive Repayment plans.

As we dive deeper into your options, keep these four essential thoughts in mind:

  • Eligibility requirements for each plan
  • Advantages and disadvantages of individual plans
  • Percent of your discretionary income used by every plan
  • Assess your personal/financial situation

Standard Repayment Plan

This is by far the most popular repayment plan for those with federal student and parent loans. In fact, if you don’t choose your own repayment plan, you will be automatically put on a standard repayment schedule.

Why is it the most popular? A standard repayment plan offers:

  • 120 fixed-monthly payments during a repayment term of up to ten years.
  • Payment amounts are fixed depending on the size of your loan with a minimum of $30 per month.
  • Standard repayment period of ten years (with the exception of being Direct Consolidation loans)

Each loan requires a minimum monthly payment:

  • Direct Subsidized and/or Unsubsidized Loans = $50/mon
  • Direct Consolidation Loans = $40/mon
  • Perkins Loans = $30 per month

Standard repayment offers the shortest repayment term. Essentially, if you choose this plan, you will probably save money by paying less interest over a standard repayment term. 

You can estimate your monthly payments easily by just calculating 1.0% to 1.3% of your total loan balance when the loan enters repayment. 

Contact your schools for more information about repaying back your loans. They will provide you with instructions on how to apply for the standard repayment plan.

Income-Driven Repayment Plan

Income-Driven Repayment (IDR) Plans are super convenient for those who are struggling to make ends meet. This form of repayment sets your monthly student loan payment at an amount that is intended to be affordable based on your income and family size. 

Most federal student loans are eligible for at least one IDR  plan. If your income is low enough, your payment could be as low as $0 per month. 

Your federal student loans must be in good standing to qualify for an income-driven repayment plan. Additionally, you’ll need to provide some financial and family information when you apply for one of the plans.

The Federal Student Aid offers four IDR plans:

  • Pay As You Earn Repayment Plan (PAYE Plan)
  • Revised Pay As You Earn Repayment Plan (REVISE Plan)
  • Income-Based Repayment Plan (IBR Plan)
  • Income-Contingent Repayment Plan (ICR Plan)

No matter what debt repayment plan you choose, make your decision based on thorough research that addresses each of their pros and cons. 

Debt Repayment Plan Resources

Applying for an IDR Plan is free and super easy. You can apply by completing an online Income-Driven Repayment Plan Request or a Direct Consolidation Loan application on

We suggest you use the Repayment Estimator before contacting your loan servicer to discuss the best repayment option for you. Doing so will allow you to compare the various monthly payment amounts for all federal student loan repayment plans.

Ultimately, if you are interested in paying less interest on your loans, then a standard repayment plan is your best option. However, if you are looking for the lowest possible monthly payments, income-driven repayment plans will have more flexibility.

Whatever your bottom line, consider all the pros and cons to ensure you pick the right plan for you.

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