How to Apply for the Extended Repayment Plan to Lower Loan Payments

• The Extended Repayment Plan lets you spread payments over 25 years, lower monthly payments and offering quick relief if you’re struggling to keep up.

• If you’re nearing retirement or have used forbearance options, this can help you avoid default and buy time to improve your personal finances.

• Extending the loan means paying more interest over time. Consider other options like income-driven repayment or student loan refinancing to see what best fits your long-term goals.

If your monthly federal student loan payments feel unmanageable, the Extended Repayment Plan could help by stretching your loan term to 25 years, effectively lowering your monthly payments.

But it comes with a trade-off: while your payments decrease, the total interest you’ll pay increases over time, potentially adding up to tens of thousands of dollars in extra costs.

To qualify, you’ll need to have at least $30,000 in federal student loans, including Direct or Federal Family Education Loans (FFEL).

Now, let’s walk through how you can apply and start taking control of your payments today.

Related

• How Do I Change My Student Loan Repayment Plan?

• What Repayment Plans Qualify for PSLF?

1. Confirm Eligibility

To qualify for the Extended Repayment Plan, you must have more than $30,000 in federal student loan debt, which can include Direct Consolidation Loans, FFEL loans, or Stafford Loans.

Unsure about your loan type or total balance? Log into your Federal Student Aid account to check your remaining balance and confirm your eligibility requirements.

This is an important first step in making sure this payment plan is right for you.

2. Contact Your Student Loan Servicer

Your loan servicer is the company that manages your loan program payments. You can reach out to them by phone or log into your account online to begin the application process.

Most lenders offer convenient online options, making it quick and easy to apply for the Extended Repayment Plan.

3. Fill Out the Repayment Plan Request Form

Next, complete the repayment plan request form, selecting the Extended Repayment Plan.

If you’re unsure which repayment plan is best for your financial situation, don’t hesitate to ask your loan servicer for guidance, or use the Loan Simulator tool on the Federal Student Aid website to estimate your new monthly payments.

Having a clear picture of how this plan affects your budget will help you feel more confident moving forward.

4. Understand the Terms

Once your application is processed, your loan servicer will send you a confirmation outlining the terms of your new federal student loan repayment plan.

Take the time to review how your monthly payments and total interest will change under the Extended Repayment Plan. If anything is unclear, reach out for clarification—your loan servicer is there to help guide you.

5. Begin Your New Payment Schedule

After your application is approved, your loan servicer will notify you of the date to begin making payments under the Extended Repayment Plan.

Stay on top of your payments to avoid penalties or the risk of default, and ensure your new plan is helping you stay financially stable. Related: Can You Get Student Loan Forgiveness If You Are in Default?

Both the Extended Repayment Plan and the Extended Graduated Repayment Plan extend your loan term up to 25 years, lowering your monthly payments. But the way your payments are structured differs between the two:

Extended Repayment Plan (Fixed Payments)

With the Extended Repayment Plan, your monthly payments remain consistent throughout the life of the loan.

This predictability can make it easier to manage your budget, as you’ll know exactly what to expect each month.

If you value stability and prefer knowing your payment amounts ahead of time, this plan could be the right fit for you.

Extended Graduated Repayment Plan (Stepped Payments)

The Extended Graduated Repayment Plan offers a different approach. It starts with lower payments that increase every two years.

This plan might be ideal if you anticipate your income growing over time.

But be prepared for your payments to step up as the years go by, so it’s important to consider whether you’ll be able to afford the higher amounts later on.

Which Plan Should You Choose?

Both plans reduce your monthly payments by extending the repayment period, but they also increase the total amount of interest you’ll pay over time.

To make the best choice, think about your current and future financial situation.

Do you prefer the stability of fixed payments, or are you comfortable starting with lower payments and having them increase over time?

Table Explanation:

• Loan Balance: These are examples of common loan amounts.

• Monthly Payment (Extended Plan): This column shows the fixed monthly payments under the Extended Repayment Plan for the full 25 years.

• Monthly Payment (Extended Graduated Plan): This column shows the initial lower payment under the Extended Graduated Repayment Plan, which increases every two years.

• Total Interest Paid: These figures represent the total interest you’ll pay over 25 years. The Extended Graduated Plan generally results in higher interest because lower initial payments allow more interest to accrue.

• Repayment Term: Both plans offer a 25-year repayment period, which reduces monthly payments but increases the total interest paid over time.

Here’s what you need to know to qualify for the Extended Repayment Plan:

• Loan Balance: You’ll need to have more than $30,000 in federal student loans to be eligible.

• Loan Types: Eligible loans include Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans for graduate or professional students, FFEL loans, and FFEL PLUS Loans.If you have Parent PLUS Loans, they must be consolidated before you can qualify.

• Repayment Term: The Extended Repayment Plan allows you to extend your loan term up to 25 years, lowering your monthly payments. But keep in mind that extending your loan term means you’ll pay more in interest over time.

• Switching Plans: You can switch to the Extended Repayment Plan from most other plans, including Standard, Graduated, or Income-Driven Plans, as long as your total loan balance exceeds $30,000.

To check your eligibility, simply log in to studentaid.gov or contact your loan servicer for more information.

Unfortunately, the Extended Repayment Plan doesn’t qualify for loan forgiveness through standard programs like Public Service Loan Forgiveness or Income-Driven Repayment forgiveness. This is because the Extended Plan doesn’t meet the income-driven criteria required for forgiveness.

But, there’s an exception: the one-time IDR account adjustment. The Department of Education has been reviewing past payments made under any repayment plan—including the Extended Repayment Plan—and counting them toward forgiveness under IDR or PSLF.

The adjustment is meant to fix past errors and could benefit borrowers who were on non-qualifying plans, like the Extended Repayment Plan.

That said, the Department was expected to finish these adjustments by September 1, 2024, so it’s unlikely you’ll receive credit for payments made under this plan going forward.

To ensure future payments count toward forgiveness, you’ll need to switch to a qualifying income-driven repayment plan. Related: Pros and Cons of Income-Driven Repayment Plans

The Extended Repayment Plan can lower your monthly payments by spreading them out over 25 years, but it’s not always the best long-term solution. Here are a few situations where it might make sense to consider this option:

You’re Nearing Retirement

If you’re only a few years away from retirement and expect your income to drop significantly, the Extended Repayment Plan can be a temporary way to reduce your monthly payments until you retire.

Once your income decreases, you could switch to an income-driven repayment plan like SAVE, Pay As You Earn (PAYE), Income-Based Repayment (IBR), or Income-Contingent Repayment (ICR), which bases your payments on your new, lower discretionary income.

You’ve Exhausted Forbearance Time

If you’ve run out of forbearance options but still need a way to keep your payments manageable before switching to a more suitable plan, the Extended Repayment Plan can offer some breathing room.

Related: SAVE Plan Forbearance – What It Means for Borrowers

When your income changes or your situation improves, you can reassess and move to a repayment plan that fits your long-term financial goals.

You’re a High Earner With Few Dependents

If you’re a high-income professional, like a doctor or lawyer, with a small family, IDR plans might not lower your payments much because your discretionary income is higher.

For doctors, the PSLF Program might be a better option after medical training. But for other professionals who don’t qualify for such programs, the Extended Repayment Plan might seem appealing as a temporary solution.

In these cases, refinancing or aggressively paying off your loans could be smarter moves—especially if you qualify for lower interest rates on private loans.

The Extended Plan can also be a short-term bridge while you explore refinancing or other repayment options.

• Standard Repayment Plan: Fixed monthly payments over 10 years. Learn more about the Standard Repayment Plan. 

• Graduated Repayment Plan: Payments start low and increase every two years, with a 10-year repayment term. Learn more about Graduated Repayment Plan

• Income-Driven Repayment Plans: Payments are based on your income and family size, with potential loan forgiveness after 20-25 years. Learn more about Income-Driven Repayment Plans.

• Income-Sensitive Repayment Plan: Available for FFEL borrowers, this plan adjusts your monthly payments based on your income. Learn more about Income-Sensitive Repayment Plan.

Applying for the Extended Repayment Plan is a smart move if you’re looking to lower your monthly student loan payments by extending your term to 25 years. It’s easy to get started!

First, confirm your eligibility, then contact your loan servicer to complete the request form. Review the terms carefully, and once approved, you’ll start your new, more manageable payment schedule.

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