Repayment of Federal Family Education Loans

Subsidized Federal Stafford Loan

• Payment of principal and interest begins six months after the day you graduate (your "grace period") or are enrolled less than half time. Repayment should be completed within 10 years, depending on the amount borrowed. However, extended payment plans, graduated repayment and deferments (to delay repayment) are available through your lender or loan servicer. You may choose to repay earlier without penalty.
  
  
• The federal government pays (subsidizes) all your loan interest while you are enrolled at least half time, during your grace period, and during periods of authorized deferment.
  
  
• The interest rate is:

Interest Rates for Subsidized Stafford Loans
First loan disbursement ...		Interest rate on the unpaid balance
... made on or after	...and made before
July 1, 2008	July 1, 2009	6.0%
July 1, 2009	July 1, 2010	5.6%
July 1, 2010	July 1, 2011	4.5%
July 1, 2011	July 1, 2012	3.4%
These reduced interest rates apply only to subsidized loans made to undergraduate students; any unsubsidized Stafford Loan for the same undergraduate borrower would continue to be made at 6.8% Graduate students have a fixed rate of 6.8%

Unsubsidized Federal Stafford Loan

• You'll be charged interest from the time the loan is disbursed until it is paid in full. If you allow the interest to accumulate, it will be capitalized. That is, the interest will be added to the principal amount of your loan and additional interest will be based on the higher amount.

NOTE: If your interest is capitalized, it will increase the amount you have to repay. If you choose to pay the interest as it accumulates, you'll repay less in the long run. Also, the amount of interest you pay during the first 60 months of repayment may be tax deductible.

• Payment of principal and interest begins six months after the day you graduate or are enrolled less than half time. Payment plans and deferments are available. You may also choose to repay earlier without penalty.
  
  
• The interest rate is fixed at 6.8% for undergraduate and graduate students.

Federal PLUS Loans

• The interest is fixed at 7.9%. Interest begins to accrue after the first disbursement.
  
  
• Repayment of the amount borrowed plus interest generally begins within 60 days after the full amount of the loan is disbursed.
  
  
• Deferments (to delay repayment) are available to eligible borrowers through your lender or loan servicer.
  
  
• For Parent PLUS loans first disbursed on or after July 1, 2008, borrowers may postpone payments until 6 months after the date their child ceases to be enrolled at least half time.