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Can I extend the term of my federal student loan beyond ten years?

Yes, you can, but not in all circumstances. When they become due after graduation (or after you leave school) student loans backed by the federal government are put into a ten year, fixed payment plan.

However, young people starting out in the world do not make much initially, and that fixed payment can seem insurmountable. This is especially true if the total debt is high.

Owe More Than $30,000? Extend the Term!

That is why in instances where the loan balances, if consolidated, would total more than $30,000, the Department of Education can extend the term of the loan past 10 years and out to 25. If the loans originated prior to July 1, 2006, however, it can be extended to 30 years.

This can make a big difference! It might be much longer before it is paid off, but if the monthly payment is affordable, then that can give you the financial relief you need now.

How Can This Help?

For example, a loan of $50,000 at 6.8% interest would have a fixed payment of $575.40 over 10 years. However, extended to 25 years, it becomes $347.04, a difference of $228.36 per month. If your circumstances change later in life, you can afford to pay more per month, you can change your plan to pay it off sooner.

There is one catch, though, but not a big one. The monthly payment must be in an amount that covers all accrued interest on the loan for that month, or $50, whichever is higher.

So What Do I Do?

If you live in southern New Jersey and would like to consult with me on your loans, please feel free to call my office at 856-432-4113 or contact me through this site to schedule an appointment in my Woodbury office to discuss your case.

If you would like more information about student loans, you can dowload my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.

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Steven J. Richardson
Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.