Graduated Repayment Plan

The Graduated Repayment Plan helps you reduce your monthly student loan payments by offering you interest-only payments for the first two years of the 10-year student loan repayment program.

If you are a borrower with a low income, the Graduated Repayment Plan may be the right choice for you, particularly if you expect your income to increase over the life of your student loan. For many former students who take entry-level positions right out of school, the Graduated Repayment Plan may save you money each month over other student loan repayment programs. It also might be a better fit if you will soon be making a higher income.


How to Qualify for the Graduated Repayment Plan

Like the Standard Repayment Plan, the Graduated Repayment Plan is available to anyone with federal student loans, including consolidation loans. Unlike the Standard Repayment Plan, however, your student loans won’t be automatically applied by your loan servicer, meaning you will need to convert your federal student loans into this type of plan.

The federal loans eligible to take part in the Graduated Repayment Plan include:

  • 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

Only federal student loans are eligible for the Graduated Repayment Plan. If you have private student loans and are looking at repayment options, please speak with your loan servicer.

Find out if you can take advantage of the Graduated Repayment Plan for free.



How the Graduated Repayment Plan Works

While consolidated and unconsolidated federal student loans are both eligible for the program, each are handled a bit differently once you’re approved for the Graduated Repayment Plan.

Both consolidated and unconsolidated federal student loans begin with a low monthly payment for the first two years, where you’re only paying interest on the student loan. This payment will increase every two years based on the amount you owe, with more and more of your payment going towards principal, and will never be less than the interest that accrues while you’re making your payments.

Individual loans converted into a Graduated student loan will be scheduled for repayment within a 10-year period. Consolidated federal loans that have been converted into a Graduated Repayment Plan, on the other hand, may require monthly payments for a period of 10 to 30 years, depending on how much you owe on your student loans.

Use the chart below to figure out how long your repayment period will be based on your student debt.

Amount is More ThanBut Less ThanYour Repayment Period
$7,50010 years
$7,500$10,00012 years
$10,000$20,00015 years
$20,000$40,00020 years
$40,000$60,00025 years
$60,00030 years


Your monthly payments through the Graduated Repayment Plan will never be higher than three times that of any other student loan payment, regardless of your loan’s balance.

For more details on the Graduated Repayment Plan, speak with a student loan specialist by phone at 800-771-6358