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Direct/Stafford Loan Repayment

Contact Information:

Contact your lender, which can be found on the National Studen Loan Data System www.nslds.ed.gov.

What Are the Terms of the Loan?

The subsidized Direct/Stafford Loan is interest-free to you during in-school, and deferment periods.  On the unsubsidized Direct/Stafford Loan, you are charged interest during those periods.  You may have chosen to pay the interest on the unsubsidized loan while you were in school, or you may have allowed the interest to accrue and capitalize (be added to the principal amount).  You should be aware that if you allowed your interest to accrue, your principal amount would be higher than the original amount you borrowed when it is time to enter repayment.

What is the Direct/Stafford Loan Interest Rate?

The interest rate on the Direct/Stafford Loan depends on when you took out the loan, and if you took out a subsidized or unsubsidized Direct/Stafford Loan.

Academic Year Loan Was Disbursed Interest Rate Loan Type
2012-13 6.8% fixed unsubsidized Direct for all students
3.4% fixed subsidized Direct for undergraduate students
2011-12 6.8% fixed unsubsidized Direct for all students and subsidized Stafford for graduate students
3.4% fixed subsidized Direct for undergraduate students
2010-11 6.8% fixed unsubsidized Direct for all students and subsidized Stafford for graduate students
4.5% fixed subsidized Direct for undergraduate students
2009-10 6.8% fixed unsubsidized Stafford for all students and subsidized Stafford for graduate students
5.6% fixed subsidized Stafford for undergraduate students
2008-09 6.8% fixed unsubsidized Stafford for all students and subsidized Stafford for graduate students
6.0% fixed subsidized Stafford for undergraduate students

When Do I Begin Repayment?

The Direct/Stafford Loan has a six-month grace period, which means you begin repayment six months after you cease to be enrolled as a half-time student (whether you graduate or not).

What is a Student Loan Servicer?

A loan servicer is an organization that contracts with your lender to handle all of the paperwork (deferments, repayments, etc.) associated with your student loan.  If you lender does this, they are required to notify you.  From then on, you should maintain contact with the servicer, not your lender.  The lender may still “hold” your loan, but the servicer knows its current status and can answer all of your questions and concerns.

What Are My Repayment Options?

Initially, most students will be granted a ten-year repayment period.  If that results in payments that are unmanageable for you, contact the lender/servicer for information about consolidation and/or graduated repayment.  These options allow you to refinance your loans over a longer period of time, thereby reducing your monthly payment. 

What is Teacher Loan Forgiveness?

If you work in a low income school for at least five consecutive years you may qualify for the Stafford Teacher Loan Forgiveness Plan.  For more information see the loan book.