Which Federal Student Loan Repayment Term Is Right For Me?

Three different sized books - there are different sized student loan repayment term options too

Flickr user Ginny

Many college students take out federal student loans, which also means paying them back someday. When that day comes, federal student loans have multiple repayment plans for students to choose from. The student loan repayment term that you choose directly impacts the amount that you have to pay back every month. It also affects the total amount of interest you will end up paying over the life of the loan.

The standard repayment term length on a federal student loan is 10 years. That means you are expected to pay back the loan in 120 equal monthly installments. You may choose to extend this term or choose a shorter term depending on your immediate financial circumstances and your long term financial goals.

Let’s take a closer look at both scenarios and the pros and cons of each:

Extending Your Student Loan Repayment Terms

Extending your loan repayment term beyond 10 years may be the solution for you if you are struggling to meet the monthly payments.

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This will lower your monthly payments and also reduces your risk of default. Defaulting occurs when you miss payments and don’t make up those payments in a certain amount of time.


A longer loan repayment term length means you pay much more by way of accrued interest by the time you finish paying off your student loan.

You should choose this option only if you absolutely cannot meet your monthly loan obligations.

Choosing a Shorter Student Loan Repayment Term

If your monthly income allows you to meet all your monthly debts and still have some left over, you may want to consider choosing to pay off your loan in less than the standard 10 years.


It will mean making higher monthly payments. That also means you’ll have to budget to make sure that you can afford those payments without defaulting.


You will end up saving a substantial amount of money by way of lower accrued interest because of the shorter loan period. The shorter your loan’s life is, the less time you spend repaying the money and whatever interest accrues.

You should choose this option only if you have the funds to make higher payments every month.

Which One Should You Choose?

There’s no one-size-fits-all decision here. It will depend on your financial preferences and circumstances. If you can comfortably afford to, you can shorten your loan. Otherwise, if you’re having trouble repaying each month, extend the loan. You end up paying more over time due to accruing interest, but you won’t default, which is the important part. Don’t feel pressured into lengthening or shortening your loan if you don’t have to; only do what makes you financially comfortable. There’s no problem with sticking to the standard 10 years, nor is there an issue if you need to change the length. There are pros and cons to each option, so be sure to plan well, do your research, and think ahead!

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