On the Extended Repayment Plan, borrowers can make reduced monthly payments for up to 25 years. While payments on the Extended Repayment plan may be much more affordable than the 10-Year Standard Repayment Plan, borrowers will typically pay more in interest as a result of the extended term.
Borrowers who qualify for the Extended Repayment Plan have the option to choose from a fixed payment or a graduated payment. Fixed payments will not change for the length of the repayment period, while graduated payments start out low and increase every few years.
Loans Eligible for Extended Repayment
To qualify for the Extended Repayment Plan, borrowers must have started borrowing after October 7, 1998, or must have had no outstanding balance on a loan before taking out a loan after October 7, 1998. Also, borrowers must have a total loan balance of over $30,000 to qualify. While both Direct and FFEL loans qualify for the Extended Repayment Plan, borrowers must owe over $30,000 in Direct loans or FFEL loans to qualify.
For instance, if a borrower owes $40,000 in outstanding Direct loans and $15,000 in outstanding FFEL loans, the Extended Repayment Plan can only be applied to the borrower’s Direct loans. A borrower with $15,000 in Direct loans and $25,000 in FFEL loans will not qualify for the Extended Repayment Plan on either loan balance.