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Updated
And you don’t need to have consolidated your FFEL Loans to qualify. But you won’t be eligible for federal forgiveness programs on this plan.
Eligible loans | How much you pay | Repayment term | Who it’s best for |
---|---|---|---|
| Repayments start low and increase every 2 years |
| Both student and parent borrowers who earn too much money to qualify for an income-driven repayment plan, but are still struggling with standard repayments. |
The federal Graduated Repayment Plan works by giving you lower monthly repayments that slowly increase every two years — ideally as your salary increases. All loans except Direct or FFEL Consolidation Loans receive the same 10-year term.
For consolidation loans, your term varies depending on your total amount of student debt — including any federal loans you chose not to consolidate. Here’s how it breaks down:
Amount of student loan debt | Repayment term |
---|---|
Less than $7,500 | 10 years |
$7,500 to $9,999 | 12 years |
$10,000 to $19,999 | 15 years |
$20,000 to $39,999 | 20 years |
$40,000 to $59,000 | 25 years |
$60,000 or more | 30 years |
This plan might be a good idea for borrowers with high loan repayments who need time to land a higher-paying job.
Any borrowers with Direct or FFEL loans can qualify for the Graduate Repayment Plan. There are no other eligibility requirements.
Unfortunately, you can’t qualify for federal forgiveness programs like Public Service Loan Forgiveness (PSLF) or Teacher Loan Forgiveness on the Graduated Repayment Plan. But you might be able to get your loans forgiven with a private or state-funded loan repayment assistance program (LRAP) while on this plan.
If you do get part of your debt load forgiven, keep in mind that the IRS considers this taxable income. This could lead to an unexpected tax bill come April.
Weigh the benefits and drawbacks before signing up for this plan.
You might want to consider signing up for the Graduated Repayment Plan in
If you haven’t started paying off your student loans yet, your servicer should reach out near the end of your grace period with instructions on how to sign up for a repayment plan.
If you’re already making repayments and want to switch to this plan, log in to your account on your servicer’s website or app for instructions. Most allow you to change your plan online, over the phone or by mail.
No, unlike other federal repayment plans, you only need to sign up for the Graduated Repayment Plan once. The only time you’ll need to reapply is if you wish to sign up for a different plan.
The federal Graduated Repayment Plan isn’t right for everyone. Here are a few alternatives to consider if you’re on the fence:
The Graduated Repayment Plan allows you to pay off your loans in as little as 10 years with low repayments that increase over time. It’s ideal if you’re just starting out in your career and expect to get a pay raise in the next few years. But you won’t qualify for PSLF or Teacher Loan Forgiveness on this plan.
See how it stacks up to your other options with our guide to student loan repayment plans.
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