Advertiser disclosure

Extended Repayment Plan Eligibility

The Extended Repayment Plan can extend a borrower’s student loan repayment period to up to 25 years. This plan can help borrowers by granting them more time to repay their debt. This can also give borrowers lower monthly payments. However, there are some eligibility requirements for this plan. Continue reading to learn more about Extended Repayment Plan eligibility!

What is the Extended Repayment Plan?

The Extended Repayment Plan is a student loan repayment plan offered by the Department of Education for federal student loans. This plan allows borrowers to extend their repayment period to up to 25 years. Student loan borrowers have the option to choose between fixed or graduated payments on this plan. 

See also: What is a graduated repayment plan for student loans?

In addition to giving you more time to repay your loans, extending your repayment plan can lower your monthly payments. This can make your debt easier to manage. 

See also: How to lower student loan payments

What loans are eligible for the Extended Repayment Plan?

The following federal student loans are eligible to be repaid on the Extended Repayment Plan:

There are additional eligibility requirements to use the Extended Repayment Plan.

Borrowers with Direct Loans must have more than $30,000 in unpaid federal Direct Loans. Borrowers must also have no outstanding balance on a Direct Loan from October 7, 1998 to the date you obtained a Direct Loan. This means you can’t have had a Direct Loan balance when borrowing the one(s) for which you intend to use the Extended Repayment Plan.

FFEL borrowers must have more than $30,000 in outstanding FFEL Program loans. They also must not have had a FFEL balance on October 7, 1998, or when borrowing the initial FFEL loans.

Some borrowers may have both Direct Loans and FFEL Program loans. If these borrowers want to use the Extended Repayment Plan for both loan types, they must have $30,000 in debt for each. For example, if you have $30,000 in outstanding FFEL Program loans, but only $5,000 in Direct Loans, the Extended Repayment Plan can be applied to only the FFEL Program Loans.

Things to consider

The Extended Repayment Plan gives federal student loan borrowers the chance to extend their repayment period to up to 25 years. As mentioned before, the longer repayment period will lower your regular monthly payments. This can make paying off student loans more manageable. However, because of the longer repayment period, borrowers may end up paying more because of interest. If you wish to keep interest down, consider making small extra payments when you can.

If your goal is to get the lowest monthly payment possible, check out Income-Driven Repayment plans. These 4 repayment plans are also for federal student loans. Monthly payments will be calculated relative to your income.

See also: How does interest work on a student loan?

Change your repayment plan

When repayment starts, you’ll automatically be put on the Standard 10-year Repayment Plan. Borrowers who are eligible for the Extended Repayment Plan should contact their student loan servicer to change their repayment plan! Make sure to be proactive about making your plan work for you. This helps you avoid student loan default and damage to your credit score.

Other resources for student loan repayment

If you’re considering making a change in your student loan repayment plan, you’ve got options. Federal loans are typically the most flexible in their repayment plans, but as of 2022, many private loans have significantly lower interest rates than federal loans from five or more years ago. Our guide to consolidating and refinancing student loans can help you through the process of assessing whether refinancing is the right solution for you, and how to do it.  We also can guide you through the process of shopping around for different loans.

Also see: Can you consolidate federal and private loans together?

Don’t miss: How to refinance student loans with bad credit

Stay on top of it

Although student loans can easily get lost in the day-to-day hustle and bustle, it’s very important that you stay on top of them. If you fail to deal with your loans and budget them into your expenses, you might end up defaulting on them, which could have terrible impacts on your credit score. If you are planning on buying a house sometime down the line, having student loans in default might prevent you from doing it.

That all being said, as long as you plan ahead and make sure you know your options, student loan default should not be a risk for you. Best of luck with your decision-making!