Repayment Options for Graduate/Professional PLUS Loans

Prepayment

• All or part of your loan can be prepaid at any time without penalty
• Prepayment may substantially decrease your total interest costs

Standard Repayment

• Fixed schedule of equal monthly payments
• Maximum 10-year repayment period

Graduated Repayment

• Monthly schedule that starts with small payments that increase gradually over time
• Maximum 10-year repayment
• Higher total interest than with the standard repayment plan

Income-Sensitive Repayment

• Monthly schedule that assigns fixed payments for one year at a time
• Scheduled payments may increase or decrease each year as income changes
• Maximum 10-year repayment period (can be extended for up to five years)
• Substantially increases total debt. A return to standard repayment plan as quickly as possible is recommended

Income-Based Repayment Option
(effective July 1, 2009)

Borrowers who meet the conditions of partial financial hardship (based on income and family size) may qualify for an income-based repayment plan.

The payment amount will not be more than 15% of the amount by which the borrower's adjusted gross income exceeds 150% of the poverty line for the family size. If the monthly payment amount is not sufficient to pay accrued interest on a subsidized Stafford loan, the U.S. Department of Education (ED) will pay the remaining interest for a period of 3 years; any outstanding loan balance after 25 years will be forgiven.

More information about income-based repayment, including a chart of examples of IBR payments, is available on the Student Aid on the Web and IBR info Web sites.

Extended Repayment

• Available if first loan was disbursed on or after October 7, 1998, and if total debt exceeds $30,000
• Fixed annual or graduated repayment schedule
• Maximum 25-year repayment period
• Substantially increases total debt.  A return to standard repayment plan as quickly as possible is recommended

If you borrow a Federal PLUS loan through the Federal Direct Loan Program all of the above repayment options are available except income-sensitive repayment.

Repayment Option Comparison

The information below compares the "monthly payments" and the "total amount repaid" of the standard and graduated repayment plans using identical 10-year terms and a 6.8 percent interest rate.

Standard Repayment Option
Amount Borrowed	Monthly Payment for 10 Years	Total Amount Repaid
$10,000	$124	$14,879
$15,000	$186	$22,318
$20,000	$248	$29,756