This plan lets you pay the least total interest possible. Graduated Repayment Graduated repayment plans let you make smaller payments in the early years of repayment, but require you to completely repay the loan within the standard repayment term, excluding periods of deferment and forbearance. Yet because you do not repay the loan principal as quickly as with standard repayment, you will pay more interest over the whole repayment term. In addition, some of the later payments usually are significantly larger than the early payments. These two plans deal exclusively with the Federal Direct Loan Program.
Payments are a fixed percentage of monthly gross income.
The loan repayment term is up to 15 years for the Income Sensitive Repayment Plan, and 25 years for the Income Contingent Repayment Plan, excluding periods of deferment. You must reapply annually to qualify. Based on provided documentation, payments are adjusted annually to reflect changes in borrower income. The Extended Repayment Plan has certain conditions and limitations. All eligible loans are combined into a single loan with a single monthly payment.