The Extended Graduated Repayment Plan reduces your monthly student loan payments by spreading out payments over a longer period and requiring you to only pay interest for the first two years.
Paying back your federal student loans during the Standard 10-year repayment period can be challenging, especially if you owe more than $30,000. Through the Extended Graduated Repayment Plan, you can make your monthly payments lower and more manageable than with other student loan repayment plans.
How to Qualify for an Extended Graduated Repayment Plan
To get approved for the Extended Graduated Repayment Plan, you will first need to meet a few requirements that are unique to the program. The first of these requirements is having a federal student loan that falls under the William D. Ford Federal Direct Loan (Direct Loan) Program or the Federal Family Education Loan (FFEL) Program. These include:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS Loans
- Direct Consolidation Loans
- Subsidized Federal Stafford Loans
- Unsubsidized Federal Stafford Loans
- FFEL PLUS Loans
- FFEL Consolidation Loans
If you have one of these loans, you will then need to meet certain conditions that apply to each loan type. Private loans are ineligible for the Extended Graduated Repayment Program.
As a Direct Loan borrower, you will need to owe more than $30,000 on your loans, and have no outstanding balance on these loans prior to October 7, 1998. These same rules apply to FFEL loan borrowers as well. However, even if you have both Direct and FFEL loans, only those loans with outstanding debt totaling more than $30,000 are eligible, and can’t be combined under this plan.
Find out if you are eligible for the Extended Graduated Repayment Plan for free.
How the Extended Graduated Repayment Plan Works
The Extended Graduated Repayment Plan is designed to keep monthly payments lower than other repayment plans by extending the period for repayment up to 25 years, depending on the amount you owe to lenders.
Regardless of how long your Extended Graduated Repayment Plan is scheduled for, your first two years on the plan will include interest-only payments, which reduces the amount you’re paying each month for your loans. After two years, and every two years afterward, payments under this plan will increase based on the amount you owe, with more of your payments going towards principal until the loans are paid off completely.
For more details on the Extended Graduated Repayment Plan, speak with student loan specialist by phone at (800) 670-4196.