Once you complete your studies and begin your career, you'll need to budget carefully and work out a plan to repay your loan. The repayment period for a Stafford loan is usually 10 years. Fortunately, Stafford loans allow a six-month grace period once you've graduated, left school or decided to enroll less than half time.
During this time, you'll receive repayment information that will include your first payment due date. Payments are usually due monthly, and they're paid to a private lender or loan servicer. If you choose to repay your loan balance early, perhaps with extra funds received from an inheritance or bonus, there are no penalties for early payment and you can reduce the amount of total interest. If you're having problems paying back your loan, you may quality for a deferment period on your loan during which no payments will be required.
If you're unable to make payments temporarily, perhaps due to poor health or job loss, your lender may be able to grant forbearance for a specified period. Finally, you may wonder if there are ever any conditions when your student loans may be cancelled or forgiven.
It's possible, but only under very specific circumstances, such as death, disability, bankruptcy , or service in certain professions. It's best to take responsibility for repaying that student loan, budget accordingly, build a solid credit history and help make it possible for the Stafford loan program to continue to back low-interest loans for students.
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Financial Aid. Types of Financial Aid. How Stafford Loans Work. If you need help financing your college education, look into Stafford Loans.
See more college pictures. Contents How much can you borrow with a Stafford loan? The submission period opens up every year on October 1. Clicking this button on this page takes you away from salliemae. Any information you provide will be shared directly with Frank and will be covered under the terms of the Frank privacy policy. That means 1 in 4 families are potentially missing out on financial aid, or even free money, to pay for college. File, file early, and file every year.
Most of the counseling is online, though some schools require first-time borrowers to complete counseling in person. If there are leftover funds, the balance will be refunded to you by check, cash, debit card, or electronic funds transfer EFT.
Your refund has to be used to pay for education expenses, whether direct or indirect, like textbooks and supplies. Alternatively, and perhaps most recommended, you could give any unused money back, lowering your total amount borrowed and your monthly payments once you leave school. File on or shortly after October 1 to be in line for first-come, first-served aid.
This is a need-based loan, so not everyone qualifies, but if you do, use it before choosing an unsubsidized loan. How much am I eligible for in either the sub or unsubsidized loan? Do I need all of it, or, do I need more?
Why you should make student loan payments while in school. How a private student loan works. Interest begins to accrue after the six-month grace period see below and throughout the repayment period. Unsubsidized Loan: Offered to undergrads and graduate students.
Interest accrues while the student is enrolled in school, and students are responsible for paying it. Grace period: A set length of time usually six months after a student leaves school graduates or otherwise in which they are not required to make payments on their student loans. Origination Fee: A fee, determined by the U. Department of Education, that is deducted from loans from the amount borrowed.
Annual Loan Amount: A limit on the amount of subsidized and unsubsidized loans a student may borrow in any year, set by the U. Cumulative Loan Amount: The aggregate amount of subsidized and unsubsidized loans a student may borrow in their lifetime. Who is eligible? To be eligible, a borrower is required to: Be a U. Annual and lifetime Stafford loan limits vary widely by the status of the student dependent versus independent and the year of schooling freshman versus graduate or medical student.
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