Both the graduated and extended graduated repayment plans lower your monthly payments, but lengthen your repayment term.
These plans may initially lower your payments based on how much you owe, but the amount you pay in the graduated repayment plan may increase every two years and the amount you pay in interest in the extended plan will be more than in other plans.
News to know 🤓 Borrowers who take out federal student loans after July 1, 2026 will only be able to be repay their loans with the Tiered Standard Plan or the Repayment Assistance Plan.
Graduated repayment at a glance
- Repayment length: 10 years.
- Number of payments: 120.
- Payment amounts: Increase every two years, but can’t be more than triple any previous payment.
- Other qualifications: Must have federal student loans.
Extended graduated repayment at a glance
- Repayment length: 25 years.
- Number of payments: 300.
- Payments amounts: Increase every two years.
- Other qualifications: Must owe more than $30,000 in federal student loans.
Is an extended graduated or graduated repayment plan right for you?
While a graduated or an extended graduated repayment plan may lower your monthly payment, they can both extend your repayment term. This may result in you paying more in interest over time. These plans may make sense if you want smaller payments at first, but don’t think you’ll fit into an income-driven repayment (IDR) plan.
A repayment plan, like an IDR, might be a better option since it offers loan forgiveness after 20 or 25 years of payments. The standard repayment for student loans might be another repayment option to consider.
These plans might make sense if you aren’t going to earn much money right after you graduate, but expect your income to grow over time so you can afford the larger payments.
Payments under the graduated and extended graduated repayment plan for student loans
Graduated repayment amounts can start small, then rise substantially. For example, let’s say you have a $35,000 student loan with an interest rate of 4%. Under the graduated repayment plan:
- Your first payment would be $198.
- Your last payment would be $595.
- You’d pay about $44,390 in total.
Under extended graduated student loan repayment, your payments start small and then increase every two years. You can also choose a fixed version of the extended repayment plan, which splits payment amounts evenly over the 25 years.
Plug your own loan information into the Education Department’s Loan Simulator to get an idea of how your payments under graduated repayment would compare to other student loan repayment plans.
Graduated and extended graduated repayment plans are very similar, but the key difference is that extended graduated repayment plans have much longer terms.
Repayment plans for federal student loans include:
- Income-Based Repayment (IBR): Payments are limited to 10% or 15% of the borrower’s discretionary income.
- Income-Contingent Repayment (ICR): Monthly payments are generally limited to 20% of the borrower’s discretionary income. ICR plans will end July 1, 2028.
- Pay As You Earn (PAYE): Pay 10% of discretionary income for 20 years. PAYE plans will end July 1, 2028.
- Standard Repayment: Entire loan is paid off in fixed payments over the loan term.
- Repayment Assistance Plan (RAP): For any loan borrowed after July 1, 2026. Payment is 1 to 10% of the borrower’s annual adjusted gross income, and the loan term is 30 years.
- Graduated or Extended Graduated Repayment: Payments start low and gradually increase every two years. Loan terms range from 10 to 25 years.
How to switch to repayment plans
Contact your federal student loan servicer to change to the graduated repayment plan for student loans. You can change repayment plans at any time. When you do, any interest you owe will be capitalized, or added to your balance. This will further increase the amount you repay.
Should you refinance student loans?
If you’re switching to graduated repayment because you make too much money for an income-driven repayment plan, consider refinancing your student loans instead. Refinancing could lower your payments without increasing the amount you repay overall, if you qualify for a lower interest rate.
Refinancing federal student loans is risky. You’ll lose access to income-driven repayment, loan forgiveness and other federal loan-specific benefits. Make sure you’re comfortable giving up those options before you refinance.
