Here are a few details about repaying Direct Loans and Federal Stafford Loans:
- After you stop attending school at least half time, withdraw or graduate, a six-month grace period begins. You receive only one grace period per loan.
- Repayment begins after the grace period ends, with your first payment usually due 45-60 days later.
- The maximum repayment period ranges from 10-25 years, depending on the repayment plan.
- Payments are expected each month.
- The minimum monthly payment is generally $50, but this amount may be different depending on your loan balance and your repayment plan.
- You may prepay your loan at any time without penalty. Prepayment may substantially reduce the amount of interest you pay.
Repayment Plans
Here are some explanations of repayment plans available to Direct Loan and Federal Stafford Loan Borrowers.
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Standard:
Minimum monthly payment is $50, but may be higher depending on balance.
Maximum repayment period of 10 years. -
Graduated:
- After you stop attending school full time, your grace period begins.
- Your initial grace period is 12 months and interest does not accrue during this time.
- If you re-enroll as a health professions student on a full-time basis during this grace period and are approved for an in-school deferment, you get another 12-month grace period the next time you stop attending school.
- If you re-enroll after your initial grace period has ended, you are not eligible for another grace period.
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Income-contingent for Direct Loans:
- Adjusted payment amount based on gross income and family size.
- Eligibility and payment amount adjusted annually.
- More interest accrues over the life of the loan because the principal balance decreases at a slower rate.
- If you do not repay your loan after 25 years, the unpaid portion is forgiven. You may have to pay income tax on any amount forgiven.
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Income-sensitive for Federal Stafford Loans:
- Adjusted payment amount based on gross income.
- Payment is the greater of your monthly interest amount or 4 percent of your gross monthly income
- Eligibility and payment amount verified annually.
- More interest accrues over the life of the loan because the principal balance decreases at a slower rate.
If you ever have difficulty repaying your loan, contact your loan holder immediately, as you have options, including a change to your repayment plan, deferment and forbearance!