I have setup a new eDirectory 88sp9 tree and have created password
policies, but the date is not getting extended on the accounts that I
create. It appears that the policy is being applied because I can simply
change the grace period login value on the policy via iManager and then
look at the account via ConsleOne and see the value change.

What seems to be not working is the extension of the
passwordExpirationTime to 6 months as I have defined it in the policy.
Also if I set the expiration time 6 months out in the future on the
account via ConsoleOne.....as soon as I log into iManager with that
account it sets the password Expiration Time to the current time and I
begin using the grace logins. Any ideas?

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