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PLUS Repayment Options

PLUS Loan Repayment Plan Options

Parents have four repayment plans from which to choose to repay their PLUS loans: the standard, the extended, the graduated, or the income-sensitive repayment plan.

The STANDARD REPAYMENT plan is a 10 year plan. The minimum monthly payment is $50. Borrowers are initially given the standard plan but may request a different plan.

The EXTENDED REPAYMENT plan allows for an increased length of time to pay off the loan. If you have borrowed a total of $30,000 or more in PLUS loans from the same lender, you can qualify to pay off the loans over 25 years. This will lower the monthly payments but increase the total interest paid. But, remember that you may pay extra on your loans as there is no pre-payment penalty. This is NOT the same as loan consolidation (see below).

The GRADUATED REPAYMENT plan is for 10 years but the payments in the first few years start out low and increase over time. The graduated period is usually during the time when the student is enrolled. During this time the monthly payment is usually only the interest charged, making the monthly payments much less than the standard plan. Once the interest only period has ended, however, the monthly payments must increase significantly in order to pay off the amount borrowed in the short period of time remaining on the loan. For example, if you choose this repayment plan, and opt for the interest only period for three years, the monthly payments during the first three years will be interest only. Then, the payments will include interest and principal and will need to increase enough to pay off the loan in the remaining seven years.

The INCOME-SENSITIVE REPAYMENT plan allows borrowers to pay a smaller monthly payment for a period of time. This plan uses the borrower's income to help determine the lower payment amounts. The repayment period is 10 years so the payments need to increase over time to pay off the loan within the 10 years.

Note that some of the features of each repayment plan may vary among the various lenders and servicers. To know what your specific options are, contact your loan servicer.


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