Stafford Loan Repayment

Repayment Terms

Federal Subsidized Stafford Loan

Repayment of principal and interest begins 6 months after graduation or when the student is no longer enrolled at least half-time.

Federal Unsubsidized Stafford Loan

Repayment of principal begins 6 months after graduation or when the student is no longer enrolled at least half-time. Interest is charged from the day the loan disburses. You have the option to make interest payments or capitalize the interest.

Under certain circumstances you can have your Stafford Loan deferred, obtain a forbearance or even qualify for loan cancellation. You must contact your lender directly for details.

Deferments

• Military Service Deferment - Eligible borrowers may receive the deferment on all outstanding FFEL, Direct Loan and Federal Perkins Loan programs in repayment on October 1, 2007, for all periods of active duty service that include that date or begin on or after that date.
• Active Duty Service Deferment - For members of the National Guard or Armed Forces Reserve, and members of the Armed Forces who are in a retired status, who are called or ordered to active duty service.
• Seeking full-time employment - A borrower may defer repayment up to three years, regardless of disbursement date and contrary provisions on the promissory note, if the borrower is unable to find full-time employment while actively seeking it. The Lender determine what documents the borrower must provide to apply for this deferment.
• Economic hardship - A borrower is entitled to an economic hardship deferment for periods of up to 1 year at a time, not to exceed 3 years cumulatively, if the borrower provides the school with satisfactory documentation.

Forbearance

Forbearance is usually a temporary postponement of payments. The borrower may request smaller payments than previously scheduled or a time extension for making payments. Interest continues to accrue during any forbearance period.

Lenders may grant forbearance to borrowers who experience financial hardship, poor health, or other acceptable reasons. Schools may grant the borrower forbearance for a period of up to 1 year at a time. The forbearance may be renewed but cannot collectively exceed 3 years.

Loan Cancellation and Forgiveness

Loan Cancellation and Forgiveness are available to borrowers who complete qualifying public service, teach in federally approved areas, have died or have become permanently and totally disabled . The Higher Education Act was amended October 7, 1998 to extend all service cancellations to all Perkins, NDSL, and Defense Loan borrowers who were previously ineligible. Please contact your lender more details.