"Extended repayment" submitted by SchoolGrantsfor Editorial Team and last updated on Monday 9th January 2012
Extended repayment plan is like the standard plan in that your minimum monthly payment is still $50. But you can take 12 to 30 years to repay your loan. The longer repayment schedule allows you lower monthly payment at the expanse of greater interest payment throughout the life of your loan. This plan is for outstanding student loan debt greater than $30,000. Payments can be fixed or may gradually increase over time, with up to 25 years to repay. Example: 6.8 percent interest for 25 years: $6.94 per $1,000 borrowed.
An Extended Repayment Plan with a fixed annual or graduated repayment amount to be paid over a period not to exceed 25 years, instead of 10 years, using either fixed or graduated payments. If you’re a FFEL borrower, you must have more than $30,000 in outstanding FFEL Program loans to be eligible for this plan. If you’re a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loan. This means, for example, that if you have $35,000 in outstanding FFEL Program loans and $10,000 in outstanding Direct Loans, you can choose the extended repayment plan for your FFEL Program loans but not for your Direct Loans. Your monthly payment will be lower than it would be under the Standard Plan, but you’ll ultimately pay more for your loan because of the interest that accumulates during the longer repayment period.
If you have several federal student loans, you may want to ask your lender about consolidating them into a single new loan with a new interest rate and an extended repayment term of up to 30 years. Loan consolidation isn’t right for everyone.
Overview of Extended repayment schedule or plan:
- The extended repayment schedule is limited to borrowers with loans first disbursed on or after October 7, 1998 or had no loans when they acquired new loans after October 7, 1998, with an outstanding balance of principal and interest in FFEL Program loans totaling more than $30,000.
- Standard or graduated repayment plans
- Repayment term not to exceed 25 years, ie. The lender may schedule the borrower for standard or graduated installments over a period not to exceed 25 years.
- Payment must cover at least the interest due.
Extended Repayment Chart
Loan Amount Monthly Payment Years in Repayment Total Paid* (Loan + Interest $50,000 $347 25 $104,111
Sign Denotes: *A subsidized Stafford loan repaid at 6.80 percent interest, assuming an extended standard repayment plan of 25 years.