Student loans default to a standard 10-year schedule when they enter repayment.

Yet, with larger student loan balances, payments on 10-year plans can be high and unaffordable. Even student loan payments on low balances can be too expensive for borrowers struggling with unemployment or low income.

Two common solutions are refinancing student loans or enrolling in an income-driven repayment (IDR) plan.

Both options lower monthly student loan payments, but each through different ways. Read on to find out which option is best for your student loans.

Income-driven repayment plans are programs administered by the Department of Education to help ease the burden of student loans. IDRs cap your monthly payments based on a certain percentage of your discretionary income and costs of living.

An IDR is ideal for borrowers struggling with their monthly payments who need something more manageable.

Borrowers can submit forms to enroll in an income-driven repayment plan.

The IDR will reset your monthly payments and lower them to an affordable amount. Monthly payments can be adjusted any time your income changes. So if you become unemployed with no income, your IDR payments will be lowered to $0 to match.

There are several different income-driven plans you can enroll in, so choose carefully.

Important: You must “recertify” your income and family size every year so your payment can be recalculated. Your lender will send you a reminder and you’ll provide updated information on your income and family size.

You will still have to recertify even if nothing has changed.

Refinancing student loans, on the other hand, changes monthly payments by changing the terms of your debts.

With this method, you will sign an agreement for a new private student loan to replace any former debts. Your lender will fund the payoff of your student debts, and re-amortize your debts over the agreed-upon term.

Monthly payments might be lowered by refinancing, but this will depend on the terms you choose for the new student loan. The longer your repayment period, the smaller your monthly payments will be.

Depending on the types of federal loans you have, you could also refinance to a lower interest rate, which could lower monthly payments. So for some borrowers, refinancing student loans can be a smart option.

Wondering if refinancing is a good idea for you? Answer a few questions below and we’ll help you find the right solution! Otherwise, scroll down to read on.

Important: When you apply to refinance your loans, there are certain requirements that must be met. Most banks and lenders will review your credit score, income, savings, and college degree (certificate of enrollment if still in school).

If you don’t think you meet the requirements, you can apply with a cosigner to increase your chances of approval.

So is enrolling in an income-driven repayment plan or trying to refinance student loans a better move for you? Well, that all depends on your student debt goals and financial needs.

Get clear on what you’re hoping to accomplish by restructuring your student debts. Then, properly evaluate the features of each option and choose the one that will get the result you need.

The chart below lays out some common student loan goals and needs, along with whether an IDR plan or refinancing will get your closer to that goal.

You can also plug some numbers into our Student Loan Hero income-driven repayment calculator and refinancing calculator to see how your payments will shake out. Then, compare your results.

With this information, you’ll be well-equipped to decide whether refinancing student loans or choosing an income-driven repayment plan is best for you.