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What is a Stafford loan?

Stafford Loan Payment

The details provided on this page refer to loans made through the Federal Education Loan Program (FFELP). 

As of July 1, 2010, all new federal student loans are made directly by the US Department of Education through the William D. Ford Federal Direct Loan Program. 

For information regarding Federal Direct Loans, visit the  Loans page on the Federal Student Aid website or contact your college financial aid office.

Student loans offer multiple repayment options based on the borrower’s financial situation. 

You will be able to start repaying your loan after you graduate unless you drop out of school or drop below half-time enrollment. Before you are due to make your first payment, you will typically have a grace period of six to nine months from the day you lowered your enrollment status to less than half-time. This will give you time to find a job and organize your financial situation. 

If you have a subsidized loan, the federal government will pay the interest during the grace period. If you have an unsubsidized loan, you are responsible for paying the interest that accrues from the date the loan was disbursed. With both types of loans, you can add the interest to your loan balance and pay it as part of your monthly payment after your grace period. However, you might consider setting up a payment plan to pay the interest on your unsubsidized loan while you’re in college. This will help lower your future monthly payment and the total cost of the loan.

When the time comes to pay off your loans, it is important that you agree with your lender on your payment plan. Information on interest rates is available on the Federal Student Aid website.

If you miss a payment or miss a payment completely, your loan can go unpaid and even in default status. A defaulted loan will have serious consequences for you, cost you more money, and lead to negative credit history for up to seven years after you have paid off the loan in full. Negative credit history can affect your employment opportunities, credit approval, future loans, and the purchase or rental of a property. To avoid a state of default, you can agree on an alternative payment plan with your lender. Remember that if you are going through great economic difficulties, have resumed studies, or have evidence of other extenuating circumstances, you should contact your lender to agree if you are entitled to a postponement or indulgence. To get out of default on a loan, you can pay the full amount you owe, agree to pay it through a loan rehabilitation program, or apply for loan consolidation.

Loan discharge is an option that allows you to discharge all or part of your loan through volunteer work (AmeriCorps, Peace Corps), military service, teaching in low-income communities, practicing law or medicine in certain groups/zones, or because of a closed school, false certification, or unpaid refund. Your loan will be forgiven if you become totally or permanently disabled, or in the event of your death.

To help you manage your student loan debt and pay it off, stay in touch with your lender, financial aid office, or ISAC if the latter agency guarantees your loan. Also, read all the correspondence you receive regarding your loan, keep your records in a safe place, stay up to date on your payments, and write your loan account number on everything you send to your lender, and on your Payments.

If you have any questions about your loan and/or grant amounts, outstanding balances, payment, or loan status, log in to My Federal Student Aid or check the National Information System on Educational Loans (NSLDS).

Visit the National Council of Higher Education Resources (NCHER) Successful Student Loan Repayment Information pages for information and resources on how to repay student loans, including the brochure You’ve Got Questions, We’ll See Got Answers: Helping You Successfully Repay Your Student Loans – only available in English. NOTE: NCHER is a national resource agency for higher education.

Payment options

One of the benefits of a student loan is the variety of repayment options available. For most student loans, a standard repayment plan is established with fixed monthly payments throughout the repayment period. However, there are other plans that can make your payment system more flexible.

The information below compares the “monthly payments” and “total amount paid” for the standard and graduated repayment plans using identical 10-year terms and an interest rate of 6.8 percent. Additional information regarding other payment plan options is also provided. Payment Calculators (English only) are useful that can help you estimate your monthly payments. Remember that changes in interest rates and federal regulations governing loan programs may affect your payments.

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Standard payment option

This option allows you to make monthly principal and interest payments, excluding deferment and forbearance periods. Depending on the amount borrowed, the minimum monthly payment is $50. 

Borrowed amount Monthly payment for 10 years Total amount paid
$10,000 $115 $13,810
$15,000 $173 $20,714
$20,000 $230 $27,619

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Gradual payment option

Borrowers who choose this option start with low payments and gradually increase payments over time.

Borrowed amount The monthly payment for 10 years Total amount paid
$10,000 1st stage: $68 for 2 years
2nd stage: $89 for 2 years
3rd stage: $115 for 2 years
4th stage: $150 for 2 years
5th stage: $195 for 2 years
$15,000 1st stage: $102 for 2 years
2nd stage: $133 for 2 years
3rd stage: $173 for 2 years
4th stage: $225 for 2 years
5th stage: $292 for 2 years
$20,000 1st stage: $137 for 2 years
2nd stage: $177 for 2 years
3rd stage: $231 for 2 years
4th stage: $300 for 2 years
5th stage: $390 for 2 years


Income Sensitive Payment Option

Monthly payments are based on a percentage of your gross monthly income.

Borrowed amount monthly gross income Income Percentage Monthly payment
$10,000  $1,000 4% $57
$20,000 $2,000 4% $113

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