Things to Know About the Student Loan Graduated Repayment Plan

When you select a student loan, you also select a repayment plan. There are various repayment plans for students to choose from, so they can have the best option for their personal situation. One of the federal student loan repayment options is a graduated plan.

A jar of coins next to three stacks of coins.

What is a Graduated Repayment Plan?

A graduated repayment plan is one that follows a typical college graduate’s salary journey. In a grad’s first job they may earn an entry-level paycheck, but over time they’ll earn raises and promotions—and their repayment rates raise with them. It’s a nice way to pay lower installments at first, while a student is starting their post-college life, and then ramping up the payments as they become more and more successful.

Graduated Repayment Plan Terms

These repayment plans are paid over the course of ten years (or up to 30 years if you have a consolidation loan). Here are the federal student loan types eligible for a graduated repayment plan:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans
  • Direct Consolidation Loans
  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans
  • FFEL PLUS Loans
  • FFEL Consolidation Loans

Is the Plan Right for You?

So should you choose this plan? Many students are attracted by the gradual increase of payments, starting off with a lower installment. However, if a student’s career doesn’t progress as planned, they could find themselves with higher payments and no increase in pay. Do plenty of research into other repayment types to find the ideal option for you.

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