Borrowers who make a modest living after graduating from college but anticipate a steady increase in income could benefit from the Graduated Repayment Plan. The Graduated Repayment Plan works by setting payments low at the beginning of the repayment period, with payments increasing slightly every two years.
Payments will always cover the monthly interest that accrues on the loan, so borrowers need not worry about their balances increasing while on this plan. Also, the payment amount will never exceed three times any other payment.
Loans Eligible for Graduated Repayment
- Direct Subsidized Stafford Loans
- Direct Unsubsidized Stafford Loans
- Direct PLUS Loans for Parents or Graduate Students
- Direct Consolidation Loans
- Subsidized FFEL Stafford Loans
- Unsubsidized FFEL Stafford Loans
- FFEL PLUS Loans for Parents or Graduate Students
- FFEL Consolidation Loans
To enroll in the Graduated Repayment Plan, borrowers can contact their loan servicer(s).