What Is the Graduated Repayment Plan?

Q: Do payments made on the Graduated Repayment Plan count toward PSLF?

Payments made on the Graduated Repayment Plan may count toward Public Service Loan Forgiveness (PSLF), but only if they’re at least equal to the amount you’d pay under the 10-year Standard Repayment Plan. Because graduated payments start low, they may not qualify until later in the repayment term, when your payments are higher.

Q: Can parent PLUS loans use graduated repayment?

Parent PLUS loans are eligible for the Graduated Repayment Plan if they were disbursed prior to July 1, 2026. Contact your loan servicer if you want to switch your parent PLUS loan to graduated repayment.

Q: Can I switch from graduated repayment later?

You can switch from the Graduated Repayment Plan to another federal student loan repayment plan later. However, graduated repayment won’t be available for federal loans disbursed on or after July 1, 2026. If you have any federal loans disbursed on or after that date, you’ll need to choose either the new Tiered Standard Repayment Plan or the Repayment Assistance Plan (RAP) for all of your federal student loans.

Q: Does graduated repayment reduce total interest?

The Graduated Repayment Plan usually increases the total interest you pay. That’s because your payments start lower, so you pay down your principal balance more slowly in the early years of repayment.

Q: What happens if my income does not increase?

If your income doesn’t grow as expected, your graduated payments could become harder to afford later in repayment. You can switch to another federal repayment plan if needed. An income-driven option, such as the Repayment Assistance Plan (RAP), may be a better fit if you need payments based on your income.

What Is the Graduated Repayment Plan?

The Graduated Repayment Plan starts with lower student loan payments that increase over time, but you’ll pay more interest than you would on the Standard Repayment Plan.

By Aly J. Yale

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Written by

Aly J. Yale

Freelance writer

Aly J. Yale is a personal finance journalist with more than 12 years of experience. Her work has been featured by Forbes, Fox Business, The Motley Fool, Bankrate, and The Balance.

Twitter

Written by

Aly J. Yale

Freelance writer

Aly J. Yale is a personal finance journalist with more than 12 years of experience. Her work has been featured by Forbes, Fox Business, The Motley Fool, Bankrate, and The Balance.

Edited by Renee Fleck

Written by

Renee Fleck

Renee Fleck is a student loans editor with over six years of experience. Her work has been featured in Fast Company, Morning Brew, and Sidebar.io, among other online publications. She is fluent in Spanish and French and enjoys traveling to new places.

Written by

Renee Fleck

Updated June 29, 2026

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”

Credible takeaways

The Graduated Repayment Plan is a federal student loan repayment plan with payments that start low and increase every 2 years.
Graduated repayment can cost more in interest than the Standard Repayment Plan because you pay down your loan balance more slowly at the start.
Graduated repayment may work best if you need a lower payment now and expect your income to grow over 10 years.
The Graduated Repayment Plan won’t be available for borrowers with federal student loans disbursed on or after July 1, 2026.
If all of your federal loans were disbursed before July 1, 2026, you can stay on or switch to the Graduated Repayment Plan.

The Graduated Repayment Plan offers federal loan borrowers flexibility by keeping payments low at first, then raising them over time. However, these lower starting payments come with a trade-off: You’ll pay more interest over the life of the loan, and your future payments could become harder to afford if your income doesn’t increase as expected.

Here’s how the Graduated Repayment Plan works, who qualifies, and how 2026 federal student loan policy changes could affect your repayment options.

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What is the Graduated Repayment Plan?

The Graduated Repayment Plan is a federal student loan repayment option that starts with lower monthly payments that increase every two years, with the goal of paying off your loans within 10 years. The idea is to make student loan repayment more manageable for new graduates just starting out in their careers.

How does graduated repayment work?

For most federal student loans, the repayment term for the Graduated Repayment Plan is 10 years. Your payments will increase four times over the life of the plan: after years two, four, six, and eight.

Direct Consolidation Loans and FFEL Consolidation Loans may have repayment terms up to 30 years, depending on the loan balance.

Monthly payments on the Graduated Repayment Plan are still subject to limits. For all eligible loans except federal consolidation loans, no payment may be more than three times the highest payment on the plan. Your payment also can’t be less than the amount of interest that accrues between payments.

Because graduated payments start lower, you’ll pay down your principal balance more slowly at the beginning of repayment. This can increase the total interest you pay over time compared to the Standard Repayment Plan.

Editor Insight: “If you can afford the monthly payment on the Standard Repayment Plan, I suggest sticking with it. Graduated repayment may lower your payment at first, but it can cost you more over the life of the loan.”

— Renee Fleck, Student Loans Editor, Credible

Graduated repayment for consolidation loans

If you have a Direct Consolidation Loan or FFEL Consolidation Loan, your graduated repayment term can be longer than 10 years. Depending on your loan balance, you may have up to 30 years to repay your loans.

Total debt	Repayment period
Less than $7,500	10 years
$7,500 to $9,999	12 years
$10,000 to $19,999	15 years
$20,000 to $39,999	20 years
$40,000 to $60,000	25 years
More than $60,000	30 years

Who can use graduated repayment?

You can use the Graduated Repayment Plan if you have an eligible federal student loan and have not received any new federal loans on or after July 1, 2026.

Eligible loans include:

Direct Subsidized Loans
Direct Unsubsidized Loans
Direct PLUS Loans
Direct Consolidation Loans
Subsidized Federal Stafford Loans
Unsubsidized Federal Stafford Loans
FFEL PLUS Loans
FFEL Consolidation Loans

How do federal student loan changes in 2026 affect graduated repayment?

Starting July 1, 2026, the Graduated Repayment Plan will no longer be available for new federal student loans.

If all of your federal loans were disbursed before July 1, 2026, you can still use the Graduated Repayment Plan. But if you take out a new federal loan on or after this date, you’ll need to choose one of the new repayment options for all of your federal student loans.

If you have federal loans disbursed on or after July 1, 2026, you’ll generally have two repayment options: the new Tiered Standard Repayment Plan or the Repayment Assistance Plan (RAP). The Tiered Standard Plan gives you fixed monthly payments, with your repayment term based on your total balance, while RAP is the new income-driven repayment option.

FAQ

Do payments made on the Graduated Repayment Plan count toward PSLF?

Open

Can parent PLUS loans use graduated repayment?

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Can I switch from graduated repayment later?

Open

Does graduated repayment reduce total interest?

Open

What happens if my income does not increase?

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Meet the expert:

Aly J. Yale

Twitter

Aly J. Yale is a personal finance journalist with more than 12 years of experience. Her work has been featured by Forbes, Fox Business, The Motley Fool, Bankrate, and The Balance.