Repayment of Your Student Loan

With a federal Stafford loan, you will have a six month grace period before you must start making monthly payments on the principal and interest. Your grace period will begin the day after you cease to be enrolled at least half-time, withdraw or graduate from an eligible school. Your lender will notify you of your first payment due date while you are in your grace period. If you do not receive this information, it is your responsibility to contact your lender.

When the time comes to begin loan repayment, your lender offers several flexible repayment options to help you easily transition into repayment.

With repayment, you can prepay all or part of your loan at any time without penalty. Prepayment can help reduce your interest cost.

• Standard repayment is the traditional approach. Standard repayment requires minimum monthly payments of $50. The payment amount may be higher depending on your loan balance.
• Graduated repayment sets your payments to be smaller in the beginning of repayment and gradually increases in states throughout the repayment period.
• Income-sensitive repayment adjusts your payment annually based on your gross income.
• Extended repayment is only available for a borrower whose first loan was made on or after October 7, 1998. The borrower must have more than $30,000 in loans. The payment amounts can be either fixed annual or graduated. The maximum repayment term is 25 years.
• Loan consolidation is available after you have completed your educational program. This program enables you to combine loans from different lenders into one loan, with one interest rate and repayment schedule. While loan consolidation can extend your repayment period and lower your monthly payments, the interest rate and total interest you pay on the loan may be greater than if you kept the loans separate.