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When you graduate college, your student loans automatically go on the standard 10-year repayment plan. But if your payments are too high, you can lower or pause them completely by pushing back your repayment deadline. In fact, you have several options for getting an extension on student loans, including income-driven repayment, extended repayment, deferment or forbearance, or refinancing for a longer term.
How to get an extension on student loans
Pushing back your repayment deadline can make your monthly payments more affordable, but it will also probably cost you more interest overall. So before requesting an extension on your student loans, make sure to weigh the pros and cons. If you decide extending your student loan repayment term is worth the extra interest costs, here are a few approaches you can take.
1. Apply for income-driven repayment
Available for: federal student loans
If you borrowed federal student loans, you could consider extending your terms on an income-driven repayment plan. Income-driven plans set your terms at 20 or 25 years while adjusting your payments to 10%, 15%, or 20% of your discretionary income.
Federal Student Aid offers four income-driven plans:
|
Payment amount as a percentage of discretionary income |
Length of repayment term |
|
|
10% |
20 years |
|
|
10% |
20 years for undergraduate loans 25 years for graduate school loans |
|
|
10% if you borrowed on or after July 1, 2014 15% if you borrowed before July 1, 2014 |
20 years if you borrowed on or after July 1, 2014 25 years if you borrowed before July 1, 2014 |
|
|
20% or what you’d pay on a 12-year plan with fixed payments, whichever is lower |
25 years |
Let’s say you owe $35,000 at a 5.05% interest rate. On the standard 10 year plan, your monthly payments would be $362. But if you extend your terms to 20 years on an income-driven plan, your payments would get cut to $232. That said, your total interest costs would double from $9,650 to $20,669.
As you can see, getting an extension on student loans can take the pressure off your finances from month to month, but it will make your student loans more expensive overall. One silver lining, though — if you still have a balance at the end of your term on an income-driven plan, it will be forgiven.
2. Request the Extended Repayment Plan
Available for: federal student loans (must owe more than $30,000)
A second option for getting an extension on federal student loans is the Extended Repayment Plan, but you must owe more than $30,000 to qualify. If you do, the Extended plan will set your repayment term at 25 years.
Let’s go back to that example of the $35,000 loan at a 5.05% rate. If you paid it off over 25 years, your monthly payments would go down to $206.
You can choose to make fixed monthly payments on this plan, or you can request graduated payments. With a graduated payment approach, your payments start out small but increase every couple of years.
Unlike an income-driven plan, the Extended Repayment Plan doesn’t end in loan forgiveness, nor will your payments count toward Public Service Loan Forgiveness. So an income-driven plan is probably a better choice if you can qualify.
3. Put your loans into deferment or forbearance
Available for: federal student loans and some private student loans
If you need to pause payments completely, consider applying for deferment or forbearance. Both pause your payments without penalty for a period of months or even years.
You’ll need a qualifying reason, such as going back to school, unemployment, or financial hardship.
If you’ve got Direct subsidized loans, deferment is a better choice, since interest won’t accrue during this period. For unsubsidized loans, interest will accrue during deferment or forbearance.
Some private lenders also offer deferment and forbearance to borrowers who lose their jobs or head back to school. Check with your lender or loan servicer about your options.
While deferment or forbearance can take a lot of pressure off your finances, neither is a long-term solution. Your loans could grow during this time, and you’ll likely end up in debt a lot longer.
In most cases, deferment or forbearance should only be used as a last resort.
4. Refinance for a longer repayment term
Available for: federal and private student loans
Last but not least, you could get an extension on student loans by refinancing your loans for new terms. When you refinance, you give one or more of your student loans to a new lender and take out a new loan in its place.
Depending on your credit, you could qualify for a better interest rate, which could save you money and lower your monthly payment. Plus, you can select a new repayment term. Most refinancing providers, such as Earnest and CommonBond, offer terms between 5 and 20 years.
If you opt for a longer term of 15 or 20 years, you can lower your monthly payments. If you’re able to pay more in the future, you can always pre-pay your loan ahead of schedule without penalty.
While refinancing has a number of benefits, unfortunately not everyone will qualify. You’ll need to have strong credit and sufficient income (or apply with a cosigner who does).
What’s more, refinancing is a private process with a bank, credit union, or online lender. When you refinance federal student loans, you lose access to federal plans, such as income-driven repayment. Before refinancing federal loans, make sure to weigh the benefits with the potential drawbacks. .
Since everyone’s financial situation is different, there’s no one-size-fits-all approach to getting an extension on student loans. By considering all your options, you can find the strategy that’s the best fit for your personal goals.
Want better rates? Here are the best banks to refinance student loans:
| Variable rates start at... | Fixed rates start at... | Repayment terms | Welcome bonus | Check your rates | |
|---|---|---|---|---|---|
 | 4.54% | 4.49% | 5 - 20 years | $200 | Visit LendKey |
 | 4.99% | 4.47% | 5 - 20 years | $200 | Visit Earnest |
 | 4.22% | 3.97% | 5, 7, 10, 15, and 20 years | $120 | Visit Laurel Road |
 | 4.53% | 4.40% | 5 - 20 years | $100 or $200, depending on the amount you refinance | Visit Credible |
 | 5.09% | 4.74% | 5, 7, 10, 15, and 20 years | $100 | Visit SoFi |
 | 4.53% | 4.83% | 5, 7, 10, 15, and 20 years | $100 | Visit ELFI |