Repayment Plan

Changing repayment plans is a good way to manage your loan debt when your financial circumstances change. For example, you can usually lower your monthly payment by changing to another repayment plan with a longer term to repay the loan. There are no penalties for changing repayment plans.

As a result in a change in legislation, some of the repayment plans being offered to William D. Ford Federal Direct Loan borrowers have changed. The Standard, Extended and Graduated Repayment plans will no longer be made available to any new borrowers entering repayment after 09/10/2007.

Existing borrowers (borrowers who have already entered repayment on one or more of their loans prior to 9/10/07) and who have one of the grandfathered plans already assigned to their loans will remain on those plans. In addition, subsequent loans that book for that borrower will be placed on the same grandfathered repayment plan.

The Direct Loan Program offers the following range of repayment plans effective 9/10/2007:

  • Standard Repayment Plans
    • Non-Consolidation Loans - fixed payment for up to 10 years.
    • Consolidation Loans - fixed payment for up to 10 to 30 years based on total education indebtedness.
  • Extended Repayment Plans
    • Fixed Monthly Payment Option - fixed payment for up to 25 years based on Direct Loan balance greater than $30,000.
    • Graduated Monthly Payment Option - smaller payments at first that increase every two years, for up to 25 years based on a Direct Loan balance greater than $30,000.

    *Extended repayment terms are available to Direct Loan borrowers with no outstanding principal or interest balances as of October 7, 1998 and with more than $30,000 in Direct Loans.
  • Graduated Repayment Plans
    • Non-Consolidation Loans - smaller payments at first that increase every two years for up to 10 years.
    • Consolidation Loans - smaller payments at first that increase every two years for up to 10 to 30 years based on total education indebtedness.

The Direct Loan Program previously offered a range of grandfathered repayment plans prior to 9/10/2007. Please note that if at any time borrowers elect to update their repayment plans, they will only be able to select from the new repayment plans. In addition, once they have changed their repayment plan, they will not be able to return to one of the grandfathered repayment plans.

  • Standard Repayment Plans - fixed payment for up to 10 years.
  • Extended Repayment Plans - fixed payment for up to 12 to 30 years, depending on the total amount a borrower owes.
  • Graduated Repayment Plan - smaller payments at first that increase every two years for up to 12 to 30 years, depending on the total amount a borrower owes.
  • Income Contingent Repayment (ICR) Plan - payment amount is based on a borrower's family size, annual Adjusted Gross Income (AGI) and the total amount of the borrower's Direct Loan(s). This can vary year to year for up to 25 years. The ICR Plan is NOT available to a borrower with a Direct PLUS Consolidation Loan(s) made before July 1, 2006 and/or a Direct PLUS Loan(s). However, a borrower is eligible to repay any Direct Consolidation Loan(s) made on/after July 1, 2006 under the ICR Plan even if it includes a PLUS Loan(s).

Please contact the Direct Loan Servicing Center if the above plans do not meet your financial needs.