Graduated Repayment Schedule

"Graduated Repayment Schedule" submitted by SchoolGrantsfor Editorial Team and last updated on Thursday 21st July 2011

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Under a Graduated Repayment Schedule, your payment amount changes, usually by increasing in two or more increments during the course of the repayment term. The Graduated Repayment Schedule cannot exceed ten years, excluding in-school, grace, deferment, or forbearance periods.

When it comes time to pay back your federal student loans, there are five repayment options, including payments that stay the same each month (standard), payments that rise gradually (graduated), payments that are linked to your income (income-sensitive; income-based) and payments that stretch over a longer period of time (extended). You’ll usually have up to 10 years to repay your loan, but you could have as long as 25 years, depending on your loan amount and repayment plan.

A Graduated Repayment Plan paid over a fixed period of time not to exceed 10 years. With this plan, your payments start with a relatively low amount and then increase, generally every two years.

Your payments start out low (as little as interest only) and gradually increase over time, with up to 10 years to repay. Example: 6.8 percent interest for 10 years: $5.67 per $1,000 borrowed for first two years, then $13.53 per $1,000 for remaining eight years.

Overview of Graduated Repayment Plan or Schedule:

Further Read: