Federal Stafford Loan Repayment Options – Extended Repayment
In the third installment of our series of blogs discussing Stafford Loan Repayment, we will focus on the Extended Repayment plan. This option is available to Stafford Loan borrowers whose total loan balance is higher than $30,000. With this plan, the borrowers will pay off their Stafford Loan debt in 25 years by making either fixed or graduated payments throughout their repayment period. This is what the repayment may look like with fixed monthly payment amounts:
| Loan Amount | Interest Rate | Number of Payments | Amount Each Month | Total Repaid Amount |
| $45,000 | 6.8% | 300 | $312.33 | $93,699.73 |
Alternatively, an Extended Repayment plan with graduated monthly payments would looks like this:
| Loan Amount | Interest Rate | Number of Payments | Amount Each Month | Total Repaid Amount |
| $45,000 | 6.8% | 300 | $258.93-$435.36 | $100,910.03 |
The clear advantage of this repayment plan is the fact that borrowers who have higher loan debt can take longer time to repay their loans by extending the repayment period from 10 to 25 years. This also lowers monthly payments, whether they choose a fixed or a graduated plan. However, a disadvantage to this repayment plan is that throughout the repayment cycle, the borrowers will end up paying a lot more in interest due to the extended repayment time.
For more information, please visit http://studentaid.ed.gov/repay-loans/understand/plans or contact your financial aid counselor.
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