Federal Direct Stafford Loan Repayment


Federal Direct Stafford Loans are repaid to a federal servicing agency. The servicer is responsible for billing, collection and management of loan repayment, and deferment/forbearance processing.

The servicer assigned to your loans will contact you to  provide important information about your repayment terms. Make sure your school and servicer have your most current mailing address and contact information. It is your responsibility to notify your school and servicer if your mailing address and contact information changes.

If you do not know which agency services your loans, visit the National Student Loan Database System (NSLDS) to determine your servicer and obtain their contact information.

Interest Rate

The interest rate is determined based on when the loan was borrowed and is listed in the information that is sent by the servicer.

The interest on the Subsidized Stafford Loan is paid by the federal government while the student is in school and during the 6 month grace period. (NOTE: The Consolidated Appropriations Act of 2012 temporarily eliminates the subsidy during the 6 month grace period on Direct Subsidized Stafford Loans first disbursed on or after July 1, 2012 and prior to July 1, 2014. The interest will continue to be subsidized while the student is enrolled in school at least half time.) 

The interest on the Unsubsidized Stafford Loan accrues during school, grace, and repayment and is the responsibility of the borrower. Borrowers will receive a quarterly interest statement and may choose to make quarterly interest payments, or may choose to defer the interest. Unpaid interest will be capitalized and due at the end of the deferment period. When unpaid interest is capitalized, it increases the total cost of the loan.

Grace Period

6 months

Loan repayment begins once the grace period has ended.

Repayment Options

There are several repayment plans that are designed to meet the different needs of individual borrowers. The amount you pay and the length of time to repay your loans will vary depending on the repayment plan you choose. Go to Repayment Plans and Calculators for more information about the various repayment plans and to calculate your estimated repayment amount under each of the different plans.

Although you’re asked to choose a repayment plan when you first begin repayment, you might want to switch repayment plans later if a different plan would work better for your current financial situation. You can change plans any time as long as the maximum repayment period under your new plan is longer than the time your Direct Loans have already been in repayment.

Standard: Fixed monthly payments of at least $50 over a maximum 10 year period.

Extended: Fixed monthly payments of at least $50 over a period of 12 to 30 years.

Graduated: Monthly payments increase every two years over a period of 12 to 30 years. Must have more than $30,000 outstanding to qualify. 

Income Contingent: Monthly payments are based on your annual adjusted gross income, family size and total amount of Direct Loans, spousal income included. Payments will not exceed standard repayment term.

Income Based: Available as of July 1, 2009, available to borrowers who demonstrate a partial financial hardship. Monthly payments are based on your annual adjusted gross income, your family size, and your state of residence. Payments will not exceed 15% of your discretionary income. After 25 years, any remaining debt will be discharged, but you may have to pay taxes on the amount forgiven.

Postponing Loan Repayment

If you are having difficulty repaying your loans, take advantage of your options to postpone loan repayment.  View details of the options available and the application process in our  Deferment/Forbearance section.

Forgiveness and Cancellation

You must repay your loans even if you don’t complete your education, can’t find a job related to your program of study, or are unhappy with the education you paid for with your loan.  However, certain circumstances might lead to your loans being forgiven, canceled, or discharged. View details in our Cancellation/Forgiveness section.