Student Loan Repayment Options: How Student Loans Work and How to Pay Them Off
How student loans work and your repayment options: federal standard and income-driven plans, forgiveness programs, refinancing and paying less interest.
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Student Loans
Borrow for education wisely and choose the right way to repay.
How student loans work
Student loans help pay for college, graduate school and career training. Interest typically begins accruing when the loan is disbursed (except on subsidized federal loans while you are in school at least half-time), and repayment usually begins after a grace period once you leave school.
Federal vs. private student loans
| Federal loans | Private loans | |
|---|---|---|
| Rates | Fixed, set by law each year | Fixed or variable, based on credit |
| Credit check | Not required for most undergraduate loans | Required; co-signer often needed |
| Repayment options | Several plans, including income-driven options | Set by lender |
| Forgiveness | Programs such as Public Service Loan Forgiveness | Rare |
| Hardship relief | Deferment and forbearance | Varies by lender |
To apply for federal aid, complete the FAFSA at StudentAid.gov.
Repayment is changing
Federal student loan repayment options were reshaped by legislation enacted in 2025, and which plans are available to you depends on when your loans were disbursed and the plan you are already in. Use the official Loan Simulator and your servicer to confirm your options before making changes. Our guide to student loan repayment options explains the main approaches.
Paying less over time
Enroll in autopay for a possible rate discount, pay interest while in school if you can, and direct extra payments to the highest-rate loan. The student loan calculator shows how much time and interest extra payments can save.
Frequently asked questions
Should I take federal or private student loans first?
Federal student loans are generally the better first choice because they have fixed rates set by law and borrower protections such as income-driven repayment, deferment and forgiveness programs that private loans usually do not offer.
How do I find out who services my federal student loans?
Log in to your account at StudentAid.gov to see your federal loans, balances and servicer contact information.
Can student loans be discharged in bankruptcy?
It is difficult but not impossible. Borrowers must show undue hardship through a separate legal process, and federal guidance has made that process more consistent in recent years. Consult a bankruptcy attorney.
Part of our Loans hub and our complete personal finance guide. Read our editorial standards.
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