The Extend Plan (Graduated) entails initially making low monthly payments that gradually increase every two years over a 25-year repayment term.
- Borrowers must have at least $30,000 in outstanding Direct Loans and no outstanding Direct Loans on 10/7/1998
- Borrowers must have at least $30,000 in outstanding FFEL Loans and no outstanding FFEL Loans on 10/7/1998
- As an example, if you have $35,000 in outstanding FFEL Loans and $10,000 in Direct Loans, you can use the extended repayment plan for your FFEL Loans only.
Increases every two years over the life of the loan by a fixed percentage
|Required Payment Minimum|
Payment must cover interest
|Required Payment Cap|
Highest payment cannot exceed 3 times the lowest payment
|Maximum Repayment Period||25 Years|
Monthly payments always exceed interest under the Extended Plan. However, if the borrower is unable to make payments, any unaccrued interest will be capitalized when:
Borrowers can switch to any other plan for which they are eligible
- Borrowers with highly-variable monthly incomes who need a low monthly minimum.
- Borrowers with high debt and expenses relative to income.
- Borrowers with high debt relative to income who do not qualify for an income-driven repayment plan.
- Total amount paid in interest under this plan will typically be greater than total interest paid under Standard Plan.
- Since payments are initially low (and may just cover interest), interest accumulates more rapidly.
- Because borrowers can always pay more than the minimum, borrowers with highly-variable monthly incomes can use this plan to secure a low monthly payment and make larger payments during months they have a higher income.