Under the graduated repayment plan, repayments would stretch over a term of up to 30 years, starting with low monthly payments that gradually increase every two years. Your payments during the plan will never be less than the interest that grows between payments. This plan could be beneficial if you’re a recent graduate with a lower starting salary and prefer lower initial monthly payments.

With the passage of the 2025 budget reconciliation bill, otherwise known as the One Big Beautiful Bill (OBBB), this option will no longer be available after July 1, 2026. Individuals choosing a repayment plan for the first time, as well as those interested in switching plans, should be aware that graduated repayment options will be discontinued.

The good news is that if this plan sounds appealing to you, you have time to switch before the deadline next year.

How the graduated repayment plan works

Nonconsolidated loans

If you choose the graduated repayment plan and you have a nonconsolidated loan, the U.S. Department of Education will determine your payments. In general, your payments will start at around 50 percent of what you’d pay on the standard repayment plan and will finish at around 150 percent of what you’d pay on the standard repayment plan.

In a nutshell:

• Repay the loan in 10 years
• Monthly payment increases every two years
• Never pay less than the interest that accrues between payments
• Monthly payments won’t be three times greater than other plans

Consolidated loans

If you have a consolidated loan, your payment timeline would look slightly different. If you have less than $7,500 in consolidated loans, your repayment period will still be 10 years. If you owe between $7,500 and $10,000, you would have been expected to repay over 12 years. That repayment period would, theoretically, lengthen as your total balance increased, if the graduated repayment plan were to remain in effect.

The Department of Education’s Loan Simulator can help you determine if the graduated repayment plan is a good option for your student loans. Consider your career and long-term income trajectory before enrolling to ensure the monthly payments will be manageable.

• Repay loan in 10 to 30 years
• Monthly payments increase every two years
• Never pay less than interest that accrues between payments
• Monthly payments won’t be three times greater than other plans

Current student loan interest rates

Stay up to date with interest rates on federal student loans.

Check current rates now

Graduated repayment plan: Pros and cons

The graduated repayment plan doesn’t operate like an income-driven repayment (IDR) plan. If your income doesn’t increase over time, you’ll still be responsible for the increased payments near the end of your plan.

Pros

• Low monthly payments to start
• Pay off debt in as little as 10 years

Cons

• Higher interest payments than the standard repayment plan
• Payments increase over time
• Payments under this plan don’t count toward Public Service Loan Forgiveness

Bottom line

Enrolling in a graduated repayment plan could make sense if you want to leverage a low monthly payment for your first year in repayment. But consider that starting in 2026, you’ll need a different game plan for loan payments moving forward

If you need help deciding which repayment plan is best for you, use the Federal Student Aid Loan Estimator, or use the student loan calculator to help you with your repayment strategy.

Frequently asked questions

• What is the difference between a fixed and graduated repayment plan?
  

  Under a fixed repayment plan or standard repayment plan, your payments are the same for 10 years (up to 30 years for consolidated loans). This is the most aggressive payment plan, which allows you to pay off your loans completely in a decade.

• How do you switch to the graduated repayment plan?
  

  To change your existing payment plan, contact your loan servicer or fill out and submit the repayment plan request form, which expires on April 30, 2026.

• Does the graduated repayment plan qualify for PSLF?
  

  The Public Service Loan Forgiveness program requires Direct Loans or Direct Consolidation Loans through the federal government, and these must be enrolled in a qualifying repayment plan. Graduated repayment plans have not historically been eligible for PSLF.