Loan Repayment

Selection of the appropriate repayment plan for Direct Loans is essential, and saves money in the long run.  Students are urged to please read the following information carefully and do not hesitate to contact the Financial Aid Department with any questions that they may have.

Remember: The Financial Aid Department at AOMA is committed to providing support, guidance, and education regarding the financial aid process from the point of origination to the process of repayment.

During an Exit Counseling online session, the borrower is given repayment plan options that are available based on the borrower’s loan balance. Payment plans should be selected during the grace period. Borrowers who do not select a payment plan are automatically enrolled in the Standard (10 Year) Repayment Plan. To enroll in a different repayment plan, borrowers should contact their loans servicer about 2 months before their grace period ends. If other loans were taken before attending AOMA, it is encouraged that students contact their servicer as soon as possible before the end of the final term, as the repayment status may change immediately after graduating from AOMA or no longer attending at least half-time status in a term. Loan servicer information can be found via the National Student Loan Data System.

The repayment plans outlined below are available for federal Direct Subsidized, Unsubsidized, and PLUS loans for graduate students. If you need assistance selecting a repayment plan, please contact the financial aid office by email or by phone (512-492-3077).

Repayment Plans

Standard Repayment Plan

A borrower is automatically enrolled in the Standard Repayment Plan (SRP) if he/she does not elect a different plan. The SRP allows a borrower to repay a loan over a maximum of ten years, making monthly payments of a fixed amount until the loan is paid in full. Because the loan is repaid in the shortest amount of time, the SRP offers the lowest, overall cost of loan repayment. As a result of the short time frame for repayment, monthly payments under the SRP are higher than under other plans, but borrowers may pay the least amount of total interest.

Extended Repayment Plan

To be eligible for the Extended Repayment Plan (ERP), a borrower must have more than $30,000 in Direct Loan debt and must not have an outstanding balance on a Direct Loan as of October 7, 1998. The ERP allows a borrower to repay a loan over a maximum of 25 years by making monthly payments of a fixed amount until the loan is paid in full (for the ERP graduated payment option, see “Graduated Repayment Plan” below). The fixed monthly payment is lower under the ERP than under the SRP; however, the borrower ultimately pays more for the loan because of the interest that accrues during the longer repayment period.

Graduated Repayment Plan

Under the Graduated Repayment Plan (GRP) the monthly payment amount increases every two years throughout the repayment period. Monthly payments in the beginning of the repayment period are typically lower under the GRP than under the SRP; however, monthly payments at the end of the GRP repayment period are typically higher than under the SRP. The GRP repayment period is 10 years; however, borrowers with high loan balances may be eligible for a GRP with a 25 year repayment period. Finally, under the GRP, the monthly payment is never less than the interest that has accrued between payments, and no single payment is more than three times greater than any other payment.

Income Based Repayment Plan

The Income Based Repayment Plan (IBR) caps a borrower’s required monthly loan payment at an amount intended to be affordable based on the borrower’s income and family size. The IBR is available for borrowers who experience a partial financial hardship after graduation. The primary benefit of IBR comes in the form of 25-year loan cancellation. A borrower who makes 25 years of qualified payments under IBR may be eligible for cancellation of the remaining amount of their loan.

The Department of Education offers an IBR calculator that can help borrowers determine eligibility and calculate an initial monthly payment.

Under the IBR, a borrower’s monthly payment is less than the required monthly payment under the SRP. Although lower monthly payments may benefit a borrower, lower payments may result in a longer repayment period and additional accrued interest. For IBR borrowers whose monthly payment amount is less than the monthly accrued interest on the loan, the federal government offers an Interest Payment Benefit. Under this benefit, the federal government pays the unpaid,  accrued interest on Direct Subsidized loans for up to three consecutive years from the beginning of IBR.

Pay As You Earn Plan (PAYE)

Under this plan, eligible loans are Direct Subsidized and Unsubsidized loans, Direct Graduate PLUS loans, and/or Direct Consolidation loans incurred by students (not parents). With this plan, the maximum monthly payments will be 10 percent of discretionary income and the payment will change as the borrower’s income changes. A borrower will have up to 20 years to repay.

Note: You must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011. You must have financial hardship. Your monthly payments will be lower than payments under the 10-year standard repayment plan. You’ll pay more for your loan over time than you would under the 10-year standard plan. Your outstanding loan will be forgiven, if you have not repaid your loan in full after you have made the equivalent of 20 years of qualifying monthly payments. However, you may have to pay income tax on any amount that is forgiven.

Income Contingent Repayment (ICR)

The Income Contingent Repayment Plan (ICR) caps the required monthly loan payment at 20% of all earnings above the federal poverty level. Monthly payments are recalculated annually, based on the borrower’s adjusted gross income (AGI, including spouse's income for married borrowers), family size, and total Direct Loan debt. The Department of Education offers an ICR calculator that can help borrowers determine eligibility and calculate an initial monthly payment.

The maximum repayment period for the ICR is 25 years. If, after 25 years of payments, a borrower has not fully repaid his/her loans, the unpaid portion of the loan is forgiven. It is important to note that time spent in deferment or forbearance does not count toward the 25 year period and that a borrower may be required to pay taxes on the amount the loan that is forgiven. 

Income-Sensitive Repayment Plan (ISR)

Eligible loans include Federal Stafford Subsidized and Unsubsidized loans, FFEL PLUS loans and FFEL Consolidation loans. Monthly payment is based on annual income. Payments will change as income levels change, and the borrower will have up to 10 years to repay. The borrower will pay more for the loan over time than he or she would under the 10-year standard plan. Each lender’s formula for determining the monthly payment amount under this plan can vary.

Loan Consolidation

Federal Student Loan Consolidation Program

Direct Consolidation Loans allow borrowers to combine one or more of their Federal education loans into a new loan.

The process of consolidation offers several advantages, including:

  • Direct PLUS Loans may be consolidated with other eligible student loans into a single consolidation loan where all loans are held by one servicer, creating one, single, monthly payment for the borrower and making communication with the lender/servicer more convenient;
  • Consolidation loans offer many of the same repayment plans as federal Direct Loans (SRP, ERP, GRP, ICR, IBR and PAYE) and, by consolidating, borrowers may have the opportunity to change a previously selected repayment plan;
  • Consolidation resets exhausted deferment and forbearance options on loans;
  • Allows the borrower to choose a servicer during application;
  • Upon completion of an application, borrowers have 180 days to add more loans;
  • The minimum required monthly payment on a consolidation loan may be lower than the combined payments charged on multiple federal loans;
  • Borrowers retain their subsidy benefits on subsidized loans that are consolidated; and
  • Consolidation reduces the likelihood of delinquency and default, since payments are more manageable.

There may also be some disadvantages to consolidation, including:

  • If consolidation extends the repayment period, the overall cost of the loan will increase due to the entire loan balance resetting with a slightly higher interest rate and resetting the life of repayment time;
  • Borrowers who consolidate Direct Subsidized/Unsubsidized Loans while those loans are in an in-school status, will lose the grace period on those loans but excludes loans that are “in-school deferment status”; and
  • Borrowers who consolidate Direct PLUS Loans with a first disbursement date of July 1, 2008 or later will lose the six month possible post-enrollment deferment period on those loans, if consolidation occurs sooner (earlier in the term) than later towards the end of a grace period.

For more information about the Loan Consolidation Program or to apply, visit the Direct Consolidation Loan online website.

Repayment: How to Manage Your Student Loans [VIDEO]

Accessing your Loan Accounts

NSLDS and Direct Loan Account Access

Monitoring is an important part of loan management, and AOMA encourages all students/graduates to check the status of their federal loans on a regular basis. Borrowers can access their federal student loan history through the National Student Loan Data System (NSLDS). Borrowers can access their Direct Loan accounts through the Direct Loan website. For each of these websites, borrowers will need their:

  • FSA ID & Password

Loan Servicers

Any Loan Servicer provides the aforementioned repayment options. It is important to keep their contact information available should you ever need to request to postpone repayment via deferment or forbearance at any time.

CornerStone  1-800-663-1662
ECSI Federal Perkins Loan Servicer 1-866-313-3797
FedLoan Servicing (PHEAA) 1-800-699-2908
Granite State – GSMR 1-888-556-0022
Great Lakes Educational Loan Services, Inc. 1-800-236-4300
HESC/Edfinancial  1-855-337-6884
Mohela 1-888-866-4352




OSLA Servicing


If you’re not sure which Loan Servicer to contact, call the Research and Customer Care Center by email at or call them at 800-433-7327.                                       
The Federal Student Aid Ombudsman Group of the U.S. Department of Education is dedicated to helping resolve disputes related to Direct Loans, Federal Family Education Loan (FFEL) Program loans, Guaranteed Student Loans, and Perkins Loans. The Office of the Ombudsman is the mediator acting on behalf of the student and the loan servicer. The Ombudsman Group is a neutral, informal, and confidential resource to help resolve disputes regarding your federal student loans. If a servicer does not adhere to regulations by offering repayment options to a borrower, the borrower should contact this office to mediate on behalf of the student to resolve the issue.

The Ombudsman Group recommends that borrowers gather certain information prior to first contacting them. Review the recommended Self-Resolution Checklist for details.

U.S. Department of Education
FSA Ombudsman Group
830 First Street, N.E.
Fourth Floor
Washington, DC 20202-5144


To obtain resources, tools, repayment information and financial awareness counseling log sign in at The financial awareness counseling tool includes online modules to help a borrower budget and estimate repayment amounts.

Poverty Guidelines for 2020

Indian Health Services Loan Repayment Assistance

The Indian Health Services is a program from the Federal Health Program for American Indians and Alaska Natives with many opportunities for health professionals including loan repayment programs. For more information, visit their site at