Repayment
If you are currently enrolled in school and have borrowed an unsubsidized Federal Direct Stafford Loan we recommend that - if at all possible - you pay the interest (due quarterly) while attending school. Review a repayment comparison for an example of the impact of making unsubsidized Stafford Loan interest payments.
The difference with or without capitalization
|
|
With Interest Capitalization
(i.e., Interest not paid while in school)
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Without Interest Capitalization (i.e., interest paid while in school)
|
|
Original Loan Balance
|
$10,000.00
|
$10,000.00
|
|
Capitalized Interest
|
$4,800.00
|
**$0.00
|
|
Current Loan Balance
|
$14,800.00
|
$10,000.00
|
|
Interest Rate
|
6.8%
|
6.8%
|
|
Maximum Term
|
120 Months
|
120 Months
|
|
Level Repayment
Schedule Installment:
|
|
|
|
119 months
|
$170.32
|
$115.08
|
|
1 month
|
$169.09
|
$114.24
|
|
Total Repayment Interest
|
$5,637.17
|
**$3,808.76
|
|
Total Repayment Amount
|
$20,437.17
|
$13,808.76
|
Note that it is beneficial for borrowers to make their interest payments because the loan will disclose at a lower balance. 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 of your Federal Direct Stafford Loans begins after your one-time grace period - six months after you graduate from your degree program or are not enrolled at least half-time (6 credits for undergraduate students).
To make sure you do not use your one-time grace period, complete your registration promptly each semester (by responding to your bill). If you receive a request for repayment, do NOT ignore it. Contact your lender or loan servicer to request postponement of payments while you are enrolled.
If you cannot begin repayment after your grace period has expired, you may be eligible for deferment or forbearance. You should contact your lender for more information. If you do not know your lender or loan servicer, access the Loan Locater through the National Student Clearinghouse.
For help with your financial planning, you might want to use a repayment calculator BEFORE you get into any more loan debt.