Balance Based Repayment

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Balanced Based Repayment plans work similarly to other loan types, and are not driven by your post-graduation income. There are currently four potential federal balance based reparepayment plans: Year Standard and Extended (these two work by calculating your payment based on the total loan term and your combined interest rate) and Graduated (10 year) and Extended Graduated. These last two repayment options begin with low payments and balloon up as the payments begin to reach the end of the loan term, by “graduating” up in amount every two years. At first, when payments are often small, any interest that is not covered by the monthly payment capitalizes.