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One of the benefits of educational loans (including Federal PLUS Loans) is the variety of repayment options available. Most educational loan payments are set up on a standard repayment plan with monthly payments that remain the same throughout the repayment period. However, the following list includes other plans for Federal PLUS Loan borrowers that may make the payments more manageable.
Prepayment
- All or part of your loan can be prepaid at any time without penalty
- Prepayment may substantially decrease your total interest costs
Standard Repayment
- Fixed schedule of equal monthly payments
- Maximum 10-year repayment period
Graduated Repayment
- Monthly schedule that starts with small payments that increase gradually over time
- Maximum 10-year repayment
- Higher total interest than with the standard repayment plan
Income-Sensitive Repayment
- Monthly schedule that assigns fixed payments for one year at a time
- Scheduled payments may increase or decrease each year as income changes
- Maximum 10-year repayment period (can be extended for up to five years)
- Substantially increases total debt. A return to standard repayment plan as quickly as possible is recommended
Extended Repayment
- Available if first loan was disbursed on or after October 7, 1998, and if total debt exceeds $30,000
- Fixed annual or graduated repayment schedule
- Maximum 25-year repayment period
- Substantially increases total debt. A return to standard repayment plan as quickly as possible is recommended
If you borrow a Federal PLUS Loan through the Federal Direct Loan Program all of the above repayment options are available except income-sensitive repayment.
Repayment Option Comparison
The information below compares the "monthly payments" and the "total amount repaid" of the standard and graduated repayment plans using identical 10-year terms and a 6.8 percent interest rate.
|
Standard Repayment Option |
|
Amount Borrowed |
Monthly Payment for 10 Years |
Total Amount Repaid |
|
$10,000 |
$124 |
$14,879 |
|
$15,000 |
$186 |
$22,318 |
|
$20,000 |
$248 |
$29,756 |
| Graduated Repayment Option |
|
Amount Borrowed |
Monthly Payment for 10 Years |
Total Amount Repaid |
|
$10,000 |
1st stage: $75 for 2 years
2nd stage: $97 for 2 years
3rd stage: $126 for 2 years
4th stage: $164 for 2 years
5th stage: $214 for 2 years |
$16,242 |
|
$15,000 |
1st stage: $112 for 2 years
2nd stage: $146 for 2 years
3rd stage: $190 for 2 years
4th stage: $247 for 2 years
5th stage: $321 for 2 years |
$24,363 |
|
$20,000 |
1st stage: $150 for 2 years
2nd stage: $195 for 2 years
3rd stage: $253 for 2 years
4th stage: $329 for 2 years
5th stage: $427 for 2 years |
$32,485 |
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