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25- or 30-Year Student Loan Refinance: What to Know About Extending Your Repayment Term

Can You Refinance a Student Loan to a 30-Year Term?
LeeMarie Kennedy
LeeMarie KennedyUpdated May 10, 2022
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Editor’s Note: Since the writing of this article, the Biden administration has extended the pause on federal student loan repayment through mid 2023. If you have federal student loans and are hoping to decrease the size of your monthly payments by extending the length of the loan, there are ways to change your repayment term. From an Extended Repayment Plan to a 25-year student loan refinance, income-contingent repayment plans are available as are solutions through private refinancing.

What Is Student Loan Refinancing? 

Private vs. federal student loans is an issue many people are studying. Student loan refinancing might sound a bit complicated, but it’s a fairly straightforward process. If you’re looking to refinance student loans, a private lender will pay off your existing loan debt and issue you a new loan agreement. For many, the goal of refinancing is to get a lower interest rate and better terms that can save you money over time. If you’re trying to cut down on the number of monthly payments you make, you can refinance multiple student loans into one, so you’ll only have to make one loan payment per month. You can also refinance your student loans to adjust the length of the repayment terms (such as shortening a loan term from 10 years to 5 or lengthening a loan term from 15 years to 20).The longer the loan, the lower the payments. Some people are even trying to get 30 year student loan refinance deals. Refinancing can be a solid option for some borrowers, but it’s important to weigh the benefits of refinancing student loans against the downsides.

Extending Your Repayment Term  

Federal student loans typically offer a 10-year repayment window, but the length of repayment time doesn’t need to stay that way. Borrowers have several options if they’re looking for an extension on their student loans. Here are a few ways to add more time to your student loan repayment plan: 

Extended Repayment Term  

The federal government’s Extended Repayment Plan lets you repay your loans over a period of up to 25 years. This way you can make lower monthly payments over a longer period of time, which may be the right financial move for you. The following loans are eligible for the Extended Repayment Plan:Under an Extended Repayment Plan, the monthly payments are: 
  • Made for up to 25 years
  • A fixed or graduated amount 
  • Typically lower than payments made through Standard and Graduated Repayment Plans
In order to qualify for the Extended Repayment Plan, there are certain eligibility requirements. Pay close attention to them.

Income-Driven Repayment 

When you’re in college, you try to get information on need-based financial aid. After graduation, an income-driven repayment plan sets your monthly student loan payment based on your income and family size to ensure affordability. There are four different types of income-driven repayment plans: 

 Income-Based Repayment 

The Income-Based Repayment (IBR) plan is a repayment plan with monthly payments that are typically equal to 15% of a borrower’s discretionary income (10% for new borrowers), divided by 12.The IBR plan is for both FFEL Program and Direct Loans, but Parent PLUS Loans are not eligible.

 Income-Contingent Repayment (ICR) 

The Income-Contingent Repayment (ICR) plan is a repayment plan with monthly payments that are the lesser of:
  1. What a borrower would pay on a repayment plan with a fixed monthly payment over 12 years, adjusted based on their income
  2. 20% of the borrower’s discretionary income divided by 12
The ICR plan is the only income-driven repayment option that’s available for Parent PLUS Loan borrowers. 

Pay As You Earn (PAYE) 

The Pay As You Earn (PAYE) plan is a repayment plan with monthly payments that are generally equal to 10% of a borrower’s discretionary income, divided by 12. PAYE monthly payments are determined based on a borrower’s family size, adjusted gross income, and total eligible federal student loan balance.PAYE plans are only applicable for Direct Loans. 

Revised Pay as You Earn (REPAYE)  

The Revised Pay As You Earn (REPAYE) plan is a repayment plan with monthly payments that are generally equal to 10% of a borrower’s discretionary income, divided by 12. REPAYE monthly payments are also determined based on a borrower’s family size, adjusted gross income, and total eligible federal student loan balance.REPAYE plans are only applicable for Direct Loans.

Which Private Refinancing Lenders Offer Student Loan Term Longer Than 20 Years?  

When you refinance with certain private lenders, some may offer repayment terms that are longer than 20 years, like a 25-year student loan refinance. It is not always possible to get the refinancing deal you want, especially if you are trying to refinance student loans with bad credit.Two lenders who offer 25 year student loan refinances are below. 

Eastman Credit Union  

Eastman Credit Union is a Tennessee-based credit union that offers private student loans with fixed-rates and interest-only payments until graduation.Eastman Credit Union offers up to 25 years financing, depending on factors like the borrower’s loan history, loan amount, underwriting criteria, and loan to value. 

Nelnet Bank  

Nelnet Bank is an online bank that’s focused on creating access to education. Nelnet Bank Student Loans offers 25-year variable rate student loan refinance, but doesn’t currently offer 25-year fixed interest rate loans. 

Pros and Cons of Refinancing to an Extended Term  

If you are intent on a 25 year student loan refinance, here are some of the pros of refinancing your student loan to an extended payment term:
  • Lower monthly payments 
  • A lower interest rate
  • The ability to lengthen or shorten your repayment period
  • The ease of making payments in one place
  • The option of adding a cosigner
And here are a few of the cons of refinancing your student loan to an extended payment term:
  • Losing the perks and protections of federal student loan plans, like federal student loan forgiveness 
  • Missing out on the student loan payment and interest freeze that’s been in effect since the CARES Act passed in March 2020 and is scheduled to end August 31st, 2022
  • Stricter eligibility requirements in some cases (borrowers will likely need a good credit score and a low debt-to-income ratio)

Student Loan Refinancing Options With Lantern  

Refinancing can give you a loan with a longer term. Remember that refinancing a federal loan to a private one means you are no longer eligible for federal forgiveness or other government programs. With Lantern, you can compare student loan refinance options and find the one that fits your personal financial goals.

Frequently Asked Questions

Can I refinance my student loans for a longer term?
How can I refinance my student loan at a lower rate?
Are students forgiven after 30 years?
How many years can I refinance my loan for?
Does refinancing affect my credit score?
Photo credit: iStock/LeoPatrizi

About the Author

LeeMarie Kennedy

LeeMarie Kennedy

LeeMarie Kennedy is a Boston-based copywriter and content creator with over a decade of experience writing for a variety of publishers, institutions, and corporations. She has spent the last few years focusing on writing for financial services, technology, HR and TA, and health & wellness sectors. LeeMarie has a BA in Journalism from Quinnipiac University and a MS in Organizational Communication from Northeastern University and was an original contributor to The Daily, SoFi's newsletter.
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