Guide to Extending Student Loan Repayment Terms

Jennifer CaloniaUpdated September 12, 2022

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For various reasons, people may seek a very extended student loan repayment plan, up to 30 years. There are downsides to these kinds of terms. In fact, there’s no direct way to secure a 30-year student loan refinance, which can be financially challenging for students leaving college with thousands of dollars in debt. But it can be done.According to the latest data from EducationData.org, the average college student graduates with a combined federal and private student loan balance of up to $40,904 and an average monthly payment of $460. Those who’ve accumulated six-figure student loan debt pursuing a professional program, like medical school, face even higher monthly payments.There isn’t a straightforward way to refinance student loans for 30 years, nor is it recommended, but borrowers still have options. Eligible borrowers can strategically refinance their student loans with a private lender, to extend their term for a more manageable monthly payment.

What Is the Average Student Loan Repayment Term?

Although Department of Education Direct Loans are placed on a 10-year Standard Repayment Term by default, some borrowers find they need more time for paying off student loans.The average borrower takes 20 years to repay their student loan debt, according to EducationData.org. Federal student loan borrowers have access to various terms and can request a different repayment plan, if they need additional time or a smaller monthly payment. Private lenders also offer borrowers an array of repayment terms, but term durations vary between lenders.

Extending Repayment Terms

Finding a willing private student loan refinance lender that offers an extensive 30-year term will likely be difficult. Instead, you’ll need to perform continuous refinances to achieve a goal of a 30-year student loan refinance.Consecutively refinancing your loans might look like securing a 15-year student loan refinance. Then, after 10 years of making payments toward that loan, you’ll apply for a second refinance, but this time for a 20-year term. In this example, you’ll have already made 10 years of payments, and then secured a second extension for 20 years. After completing the full 20 years of payments toward the second refinance, you’ll have spread your student loan repayment over a total of 30 years. To apply this strategy, you’ll need to follow the steps below for each student loan refinance period.

1. Finding a Suitable Lender

Decide which private and federal student loans you want to refinance. Before including a federal loan in this process, make sure you won’t need federal protections, like income-driven repayment or loan forgiveness in the future. If you’re unsure, consider omitting your federal student loans from the refinancing process until you’re certain.Compare a handful of lenders to find interest rates and terms that are right for your needs. The underwriting criteria varies between lenders, so pay attention to their credit requirements, and amount minimums and maximums before checking your rates.

2. Determining Repayment Length for You

By planning two consecutive loan refinances, your end-goal is to ultimately refinance your student loans over 30 years. In the meantime, make sure the repayment term you choose for the first refinance loan requires a monthly payment that’s manageable for your budget today.When shopping around for your first refinance loan, you might be offered a variety of loan terms, from 10-, 15-, or 20-years, depending on your situation. The shorter your loan term, the higher your monthly payment. If you end up choosing a loan term with a high monthly payment that you can’t afford, you risk being late on payments or defaulting. Both of which result in damaging your credit. With adverse credit, you might not qualify for a second refinance, and your 30-year student loan refinance strategy becomes ineffective.

3. Applying to Extend Repayments

Before your first student loan refinance term ends, start browsing for student loan refinance offers again. In addition to seeking out a loan with eligibility criteria you meet and competitive rates, pay close attention to offers that get your total repayment term toward the 30-year mark.To avoid spending more money on interest charges, consider choosing the shortest loan term that will get you to your 30-year goal. For example, let’s say your first refinance loan had a 20-year term and you’ve already made 15 years of payments. And for your second refinance, you have the option between a 15- or 20-year refinance for the second occurrence. Technically, you can choose to do another 20-year refinance, but you might be tempted to stretch your overall term to 35 years. This means your monthly payment will be even lower, but you’ll pay more interest overall, too. In this scenario, a 15-year term for the second refinance loan achieves your goal for a total 30-year repayment period.

How Long Can You Extend Repayments for?

Generally, each student loan refinance you undergo can extend your student loan repayment term by five to 25 years. The refinancing term you’re approved for depends on your eligibility and the lender you go through. Once you’ve refinanced, you can refinance as many times as you want during your term. However, keep in mind that a student loan refinance to 25 years or greater means that you’ll have paid more money toward your degree than if you stuck with your original loan term.

Can Student Loans Be Extended to 30 Years?

With a strategic plan, you can technically extend your loan term to 30 years or longer through multiple student loan refinances. Just remember that any unpaid interest will capitalize, meaning that it’s added to your loan balance and you’ll pay additional interest on it.Conversely, if you have federal student loans and don’t want to convert them to a private refinance loan, you can only access a 30-year repayment term with a Direct Consolidation Loan.

The Takeaway

Securing a 30-year student loan refinance requires careful strategizing. Before going through with a plan to refinance a student loan for 30 years, determine if student loan refinancing makes sense for you. For example, do you plan on working in the public sector for a majority of your career? If so, avoiding a refinance and making lower payments toward your federally owned loans might make you eligible for Public Service Loan Forgiveness later on. If you’re confident that you won’t need federal benefits in the future, refinancing strategically might help you successfully extend your term. When doing so, always shop around. Lantern by SoFi shows you offers from multiple refinance lenders so you can find the most competitive rates and terms for you.Compare student loan refinance offers today.

Frequently Asked Questions

Can I refinance my student loans for a longer term?

How many months can you refinance a student loan?

Can you consolidate student loans for 30 years?

Do student loans go away after 30 years?

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About the Author

Jennifer Calonia

Jennifer Calonia is a Los Angeles-based finance writer who has covered the gamut, including student loans, credit card rewards, consumer loans, and debt. Her work has been featured in outlets like Bankrate, NerdWallet, Business Insider, Yahoo Finance, and U.S. News.

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