Federal Direct Stafford Loan Repayment

Grace Period

After you graduate, leave school, or drop below half-time enrollment, you will begin a one-time six month grace period before repayment begins. Due to new federal legislation, interest will now accrue during the grace period on subsidized Stafford loans disbursed after July 1, 2012. Your federal loan servicer will notify you of the date your loan repayment begins and will provide further details.

Repayment Comparison Table

If you have a Federal Direct Unsubsidized Stafford Loan, you have the option to pay interest while you are in school or you can wait until you are no longer enrolled. Our office recommends that you pay the interest to minimize your loan debt. If you do not pay the interest, it will capitalize and be added to your total repayment amount. The example below illustrates the benefits of paying the interest while in school.

	With Interest Capitalization	Without Interest Capitalization
	(interest not paid* while in school)*	(interest paid* while in school)*
Original Loan Balance	$10,000	$10,000
Capitalized Interest	$4,800	$0.00 *
Current Loan Balance	$14,800	$10,000
Interest Rate	6.8 percent	6.8 percent
Maximum Term	120 months	120 months
Fixed Repayment Amount for 119 months	$170.32	$115
Fixed Repayment Amount for 1 month	$169.09	$114.24
Total Repayment Interest	$5,637.17	$3,808.76*
Total Repayment Amount	$20,437.17	$13,808.76

* Making loan interest payments benefits borrowers in the long run. For example, in this comparison, the monthly installment is $55.24 less and the total repayment at the end of the life of the loan is a savings of $1,828.41 in interest.

Repayment Plans

You will be able to choose a repayment plan that meets your needs. The amount you pay and the length of time to repay your loans will vary depending on the repayment plan you choose. Typical loan repayment terms are 10 to 25 years.

Please see the Direct Loan Repayment Plans and Calculators for more information.