Extended repayment offers a level payment plan for some types of federal student and parent loans, with a fixed monthly payment for the duration of the repayment term, but with a longer repayment term than under standard repayment.
Extended repayment has a $50 minimum monthly loan payment.
Extended repayment offers one of the lowest monthly payments, other than the repayment plans based on income.
There are two types of extended repayment. One version of extended repayment is available only for federal consolidation loans. It bases the repayment term on the loan balance, according to the following chart for loans entering repayment on or after July 1, 2006.
The other version offers a 25-year repayment term for new borrowers as of October 7, 1998 who have more than $30,000 in federal student loan debt. This version of extended repayment does not require consolidation.
Impact of Repayment Term on Loan Payments
Extended repayment yields a more affordable monthly loan payment, but increasing the repayment term also increases the total payments over the life of the loan. For example, increasing the repayment term from 10 years to 20 years on a 6.8% rate loan will cut the monthly payment by a third, but more than double the total interest paid over the life of the loan.
This chart shows the monthly payments for each $20,000 in student loan debt under extended repayment for various interest rates and repayment terms. Extended repayment can reduce the monthly payment by as much as half of the monthly payment under standard repayment. To calculate the monthly payment for a different loan balance, multiply the monthly loan payment by the ratio of the loan amount to $20,000.
Please note that these charts show the monthly payments without regard to repayment term restrictions or minimum monthly loan payments.
This chart shows the total payments for $20,000 in student loan debt under extended repayment for various interest rates and repayment terms. Extended repayment can more than double the total payments over the life of the loan as compared with the total payments under standard repayment.
Disclaimer: These charts provide estimates only. Borrowers should consult with their student loan servicers for a more precise estimate of monthly loan payments and the total amount that will be repaid based on their actual loan balances.