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Loan Repayment and Loan Forgiveness Programs

Loan Repayment Plans

There are various loan repayment plans available for students who have borrowed Federal Student Loans. You may choose the plan that best meets your needs based on your financial goals and what you can afford to pay each month. Students will automatically be placed into the Standard Repayment plan, unless you select a different plan when you complete your Exit Counseling. Students may change their repayment plan if necessary.

Eligibility for repayment plans will be determined by the type(s) of student loans you have borrowed, when you borrowed, and/or how much you have borrowed to date. To review your loan history and learn about what repayment plans you are eligible for, please log in to www.studentloans.gov.

Repayment PlanRepayment Time FrameMonthly Payment
StandardUp to 10 yearsPayments are a fixed amount.
GraduatedUp to 10 yearsPayments are lower at first then increase, usually every two years.
ExtendedUp to 25 yearsPayments may be fixed or graduated.
Income-Based (IBR)Up to 25 yearsGenerally 15% of you discretionary income, but never more than the 10-year Standard Repayment Plan amount. Payments will change as your income changes.
Income-Based (IBR)
(New Borrowers on/after July 1, 2014)
Up to 20 yearsGenerally 10% of you discretionary income, but never more than the 10-year Standard Repayment Plan amount. Payments will change as your income changes.
Pay As You Earn (PAYE)Up to 20 yearsGenerally 10% of you discretionary income, but never more than the 10-year Standard Repayment Plan amount. Payments will change as your income changes.
Revised Pay As You Earn (REPAYE)Undergraduate: Up to 20 years
Graduate: Up to 25 years
Generally 10% of you discretionary income. Payments will change as your income changes.
Income-ContingentUp to 25 yearsBased on adjusted gross income (AGI), family size, and DL debt amount. Payments will change as your income changes.
Income-SensitiveUp to 10 yearsBased on your annual income. Payments will change as your income changes.

Discretionary Income is the difference between your adjusted gross income and 150 percent of the poverty guideline for your family size and state of residence.

Loan Forgiveness

The Federal Public Service Loan Forgiveness program is available for graduates who go into public service employment. This program is available to borrowers who are employed full-time in certain public service jobs, have eligible loan type(s), make 120 qualifying payments under an eligible repayment plan and maintain a full-time employment status while working for a qualifying public service organization.  For details on this program, go to www.MyFedLoan.org/PSLF

In New Mexico, the following loan repayment assistance programs are offered to eligible borrowers:

  • Public Service Law Loan Repayment Program
    The Public Service Law Loan Repayment Program is available to borrowers whose annual salary may not exceed $55,000, student loans are not in default, and work for a qualifying organization. For more details on this program, go to http://www.hed.state.nm.us/students/publicservice_lrap.aspx.
  • New Mexico John R. Justice Program
    The New Mexico John R. Justice Program provides educational loan repayment benefits to eligible prosecutors and public defenders in New Mexico. For eligibility and application requirements, go to http://www.hed.state.nm.us/students/jrj_lrap.aspx.

For more information on loan repayment programs, consolidation information and debt management, go to www.studentloans.gov.