Repaying Your Loan

You are required to begin repaying your Federal Stafford loan six months after you graduate, leave school or drop below half-time attendance. Your parents are required to begin repaying PLUS loans 60 days after the loans are fully disbursed. In both cases, borrowers generally have 10 years to repay these loans. Under a level repayment plan your monthly payment would be at least $50. For example, the monthly payment on a $6,000 Stafford loan with an interest rate of 8.25 percent would be $73.59 under a 10-year level repayment plan.

There are other repayment options:

• Many lenders, including the ones listed in this document, offer flexible repayment options that allow you to gradually increase your payments over time or tie the size of your monthly payment to your income. You can learn more about these options by asking your lender or using some of the repayment calculators available to you at http://www.usagroup.com.
• You can investigate consolidating all of your education loans so you have one monthly payment. This program also generally allows you to extend the repayment period beyond 10 years. For more information visit www.customschool.com/ccis/consolidate.html
• If you experience economic hardship or other circumstances that limit your ability to repay your loan, you might qualify for a deferment or forbearance: Deferment allows you to postpone repayments for certain approved reasons for as long as you are enrolled at least half-time in a postsecondary school, graduate fellowship or rehabilitation program (if you have disabilities). Deferments of up to three years are also available if you are unemployed. If you don't qualify for a government approved deferment, you can request forbearance from your lender. Forbearance can delay or reduce your monthly payments. Usually, however, you must still pay the interest on your loan during the forbearance period.

Please note: If you fail to repay your loan, you will be considered in default. If this occurs, your credit rating will be damaged and you may not be able to borrow in the future to pay for a car or home or even to continue your education. Your wages may be garnished and your federal and state income taxes may be withheld; your loan may be sent to a collection agency and you will be liable for collection fees.