Graduated Repayment Plan

The Graduated Repayment Plan starts with lower payments that increase every two years. Payments are made for up to 10 years (between 10 and 30 years for consolidation loans). If your income is low now, but you expect it to increase steadily over time, this plan may be right for you.

When it comes time to repay your loans, you have the option to choose a repayment plan. If you don’t choose a different repayment plan, your loan servicer, the company that handles the billing and other services on your federal education loan, will place you on the Standard Repayment Plan.

Eligible Federal Loans

The following loans from the William D. Ford Federal Direct Loan (Direct Loan) Program and theFederal Family Education Loan (FFEL) Program are eligible for the Graduated Repayment Plan:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans
  • Direct Consolidation Loans
  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans
  • FFEL PLUS Loans
  • FFEL Consolidation Loans

Monthly Payments for Federal Education Loans Except Consolidation Loans  

Under this plan, your monthly payments:

  • start out low and increase every two years,
  • are made for up to 10 years for all loan types except Direct Consolidation Loans and FFEL Consolidation Loans,
  • will never be less than the amount of interest that accrues between your payments, and
  • won’t be more than three times greater than any other payment.

Monthly Payments for Consolidation Loans

Under this plan, your monthly payments

  • start out low and increase every two years,
  • are made for a period of between 10 and 30 years for Direct Consolidation Loans and FFEL Consolidation Loans,
  • will never be less than the amount of interest that accrues between your payments, and
  • won’t be more than three times greater than any other payment.

If you have a Direct Consolidation Loan or FFEL Consolidation Loan, the length of your repayment period will depend on the amount of your total education loan indebtedness. This total education loan indebtedness includes the amount of your consolidation loan and your other student loan debt.  Other student loan debt includes any federal student loans that are not included in the consolidation loan, as well as private education loans that are not eligible for consolidation. The maximum amount of other student loan debt that may be considered in determining your repayment period may not exceed the loan amount you are consolidating.

To include other student loan debt in the determination of the repayment period for your Direct Consolidation Loan, be sure to list those loans on your consolidation application in the section for listing loans that you do not want to consolidate, but want considered in the determination of your repayment period.

Using the Repayment Estimator to Estimate Your Eligibility and Payment Amount Under the Graduated Repayment Plan

Your loan servicer, the company that handles the billing and other services on your federal student loan, can help you choose a loan repayment plan that’s best for you. Before you contact your loan servicer to discuss repayment plans, use our Repayment Estimator to get an early look at what repayment plans you may be eligible for and to receive a comparison of estimated monthly payment amounts for all federal student loan repayment plans. This comparison is important because the Graduated Plan may not provide you with the lowest payment amount based on your individual circumstances. You may find that your payment will be lower under another repayment plan.