If you are currently on an income-driven repayment (IDR) plan, but you are wondering whether you can switch back to a standard repayment plan, the short answer is yes—you can. But before you make the switch, you need to understand how it works and what that decision means for you. Let us break this down step by step, in plain, simple English.
How to switch from an IDR plan to a standard plan
Switching from an IDR plan to a standard plan is actually not complicated. You just need to contact your loan servicer and request to leave the IDR plan. You can do this at any time. There is no special window or deadline—you can make the switch whenever you decide that an IDR plan no longer works for you.
Your loan servicer may ask you to complete a repayment plan request form. Once they process your request, they will move you to the standard repayment plan, which is usually a 10-year plan with fixed monthly payments.
Key steps to switch:
- Contact your loan servicer directly.
- Request to leave your IDR plan.
- Complete a repayment plan request form if needed.
- Review and accept your new monthly payment amount.
What happens to your monthly payments when you switch
One of the biggest things you need to know is this: your monthly payment will likely go up when you leave an IDR plan and move to a standard plan.
Under an IDR plan, your monthly payment is based on your income and family size. This usually means lower payments, sometimes even $0 if you have very low income.
Under a standard repayment plan, your payment is based on how much you owe, the interest rate, and a fixed 10-year schedule. So when you switch:
- Your payment amount will no longer adjust based on your income.
- You will probably pay more each month.
- You will likely pay off your loan faster because the standard plan is designed to pay off your loan in 10 years.
For example, if you owe $30,000 at a 6% interest rate, your standard plan payment will be about $333 per month. Under an IDR plan, you may have been paying much less than that.
Will you lose loan forgiveness if you switch
If you have been on an IDR plan and you are counting on loan forgiveness after 20 or 25 years of payments, switching to a standard plan will reset the clock. That means:
- You will lose any progress toward forgiveness under the IDR plan.
- Payments you made under IDR will not count toward forgiveness on the standard plan.
- If you switch back to an IDR plan later, the payment count will start over.
So if loan forgiveness is part of your long-term strategy, think carefully before switching.
Can you switch back to an IDR plan after leaving
Yes, you can. If you leave an IDR plan and later decide that you need lower payments again, you can reapply for an IDR plan. You will need to submit another application and provide your income information.
However:
- If you switch back, you will not get credit for the time you spent on the standard plan toward IDR loan forgiveness.
- You may also need to recertify your income and family size when you re-enroll.
Why would someone want to switch to a standard plan
You might wonder why anyone would leave an IDR plan, especially if it lowers your payment. Here are some common reasons:
- To pay off the loan faster: If you want to get out of debt quickly and can afford higher payments, a standard plan helps you do that.
- To save money on interest: The longer you are on an IDR plan, the more interest you may pay over time.
- To simplify payments: Some people prefer a fixed monthly payment that does not change year to year.
- No longer need income-based payments: If your income has increased and you can afford the standard payment, switching makes sense.
Continue reading:
How do I find the status of my Income-Driven Repayment (IDR) plan application?
