Extended Graduated Repayment: Eligibility & 2026 Rules

The Extended Graduated Repayment Plan lowers your monthly student loan bill by stretching the timeline to 25 years and starting with smaller payments that rise every two years. This plan cuts costs now for borrowers with high balances, but it leads to much higher total interest costs than the Standard 10-Year Plan.

The Extended Graduated plan focuses on cash flow today rather than savings tomorrow. It fits borrowers who need the lowest possible payment (that isn’t tied to income) and expect their earnings to go up steadily.

Because payments under this plan do not count toward Public Service Loan Forgiveness (PSLF) or income-driven forgiveness, using it is a payoff strategy, not a forgiveness strategy. It helps when income-driven repayment (IDR) math creates a monthly payment higher than you can afford. This is a common problem for single high-earners living in high cost-of-living areas.

Extended Fixed vs. Extended Graduated

The Extended Repayment Plan has two versions. Both stretch the timeline to 25 years, but they handle payments differently:

• Extended Fixed: Payments stay the same for the full 25 years. This is predictable and saves interest compared to the graduated version.

• Extended Graduated: Payments start lower than the fixed option and go up every two years. This gives you the most room in your budget now but costs the most in interest.

The table below compares the costs of these two strategies for a borrower with $85,000 in student loans at 6% interest.

The plan spreads or amortizes your loan balance over a term of up to 25 years. Payments start low — often just covering the interest in the early years — and go up at set times.

Federal rules protect you from balloon payments by capping future hikes. Under the “three times rule,” no single payment can be more than three times bigger than any other payment. This ensures the final years of repayment stay manageable, even though they will be much higher than your starting payment.

Impact on Interest Costs

Because you pay slowly over two and a half decades, interest piles up longer. As the table above shows, picking the graduated option over the fixed option can cost an extra $18,000 in interest on an $85,000 balance.

You qualify for extended repayment only if you owe more than $30,000 in principal and interest within a single loan program. The rule applies separately to each program:

• Direct Loans: You must owe more than $30,000 in Direct Loans.

• FFEL Loans: You must owe more than $30,000 in FFEL Loans.

The Consolidation Solution

If you have balances in both programs that do not reach the limit individually—for example, $20,000 in Direct Loans and $15,000 in FFEL Loans—you are currently ineligible. But consolidating these loans creates a single Direct Consolidation Loan with a balance of $35,000. This new loan meets the limit, so you can use the Extended Repayment Plan.

The payment schedule uses formulas tied to your specific balance and interest rate. The math ensures the loan is paid off by the end of the term while following the schedule of increases.

Payment Formula: Starting Payment ≅(Current Balance ✕ Interest Rate)∕Term in Months

You can check your exact payment schedule by contacting your loan servicer or using the Loan Simulator on StudentAid.gov.

If this plan does not give you a payment you can afford, other options fall into three groups: income-driven plans, standard-term plans, or refinancing.

• Income-Driven Repayment: Plans like SAVE or IBR tie payments to your spare income. If earnings drop, the payment drops. These plans are necessary if you want forgiveness.

• Standard or Graduated Repayment: These plans repay the loan in 10 years (or up to 30 for consolidation loans). Payments are higher, but you get out of debt faster.

• Private Refinancing: Refinancing with a private lender can lower the interest rate for borrowers with strong credit and stable income. But refinancing federal loans removes access to federal protections like IDR and PSLF, so it is only a good option if you do not need those safety nets.

If these options fail, asking your servicer for a temporary deferment or forbearance pauses payments during hard times. For long-term financial trouble, Chapter 13 bankruptcy is still an option for restructuring debt.

Switching from Extended Repayment to an IDR plan changes your goal from “payoff” to “forgiveness.” This switch resets the forgiveness clock.

Time spent on the Extended Graduated Plan does not count toward the 20- or 25-year forgiveness timeline required by IDR plans. If you switch to IDR after five years on Extended, you start at year zero toward forgiveness. Also, if your new IDR payment does not cover the interest, your balance may grow even while you make payments.

Your access to the Extended Graduated plan depends on when you get your loans. Under Section 82001 of the One Big Beautiful Bill Act (Public Law 119-21), enacted July 4, 2025, federal student loan repayment rules change for new loans.

The “New Borrower” Cutoff

Any federal loan disbursed on or after July 1, 2026, makes you a “new borrower” for repayment purposes. New borrowers lose access to old repayment plans, including the Extended and Graduated plans.

Future options for these loans are limited to:

• The New Standard Plan: A fixed repayment timeline of 10 to 25 years based on the balance.

• The Repayment Assistance Plan (RAP): The new income-driven option replacing previous IDR models.

Impact on Consolidation

Consolidating older loans on or after July 1, 2026, triggers the new borrower status because consolidation creates a new loan with a new disbursement date. If you plan to use the Extended Graduated Plan, you should check your consolidation timeline to avoid accidentally losing access to the plan.