The six month period is called a grace period. The standard repayment term is 10 years, but you can choose an alternate repayment plan, such as extended repayment, income-driven repayment, and graduated repayment. With income-driven repayment plans , your monthly payment is based on your income and family size, which can reduce what you pay each month. After a certain amount of payments are made generally 20 to 25 years of payments, depending on the specific plan , the remaining balance is forgiven.
Borrowers can consolidate their federal student loans into a Federal Direct Consolidation Loan. There are several options for forgiveness of Federal Stafford Loans. These usually involve working in a particular occupation for a period of time.
There are also several options for cancellation of Federal Stafford Loans. These usually involve situations in which the borrower is unable to repay the debt or not responsible for the debt. Examples include a closed school discharge, death discharge, total and permanent disability discharge, identity theft discharge, bankruptcy discharge, unpaid refund discharge, and false certification discharge.
By Mark Kantrowitz August 16, There are different interest rates for undergraduate and graduate students. Degree Level Undergraduate 2. Fees are charged based on the disbursement date.
The limits on subsidized loans are lower than the overall Federal Stafford Loan limits. The ASLA can be completed online at studentaid. Public Law amended the Higher Education Act HEA to temporarily eliminate the interest subsidy provided on Direct Subsidized Loans during the six-month grace period provided to students when they are no longer enrolled on at least a half-time basis.
This change was effective for new Direct Stafford Loans for which the first disbursement was made on or after July 1, , and before July 1, The federal government will continue to pay interest that accrues on the Direct Subsidized Stafford Loan during in-school and other eligible deferment periods.
Students have the option to pay interest on the unsubsidized portion of a Direct Stafford Loan while in school, during other eligible periods of deferment, or let interest accrue until repayment begins. Deferred interest payments on Direct Unsubsidized Stafford Loans will be added to the principal loan amount and capitalized by the lender meaning accrued interest will be added to the principal amount borrowed at repayment.
Applicants must be enrolled at least half-time to be eligible for a Federal Direct Stafford Loan and to maintain eligibility for in-school deferments minimum six credits per semester, with all credits applicable to the degree program of study.
The following charts describe annual and aggregate maximum eligibility for the Federal Direct Stafford Loan Program, based on dependency status and grade level. Through the possible combination of Subsidized and Unsubsidized Direct Stafford Loans, every student meeting all academic and eligibility requirements should be able to participate in the Federal Direct Stafford Loan Program.
Information about the William D. Regulations also require the Office of Financial Aid to offer financial aid based on the results of the needs analysis calculated by the federal government from the Free Application for Federal Student Aid FAFSA and to perform an eligibility file review for every student applying for the Federal Direct Stafford Loan. The Office of Financial Aid must review each application and will recommend an amount according to the number of credits attempted, number of credits completed, grade level, cost of attendance, outside resources available to each student, and the Expected Family Contribution EFC as derived from the FAFSA.
Loan repayment will not be required while the student maintains at least half-time attendance minimum six credits per semester , with all credits applicable to the degree program of study. Repayment of principal and interest begins six months after the student leaves school or drops below half-time attendance. Effective for Federal Direct Stafford Loans first disbursed on or after July 1, , the interest rate is fixed.
The standard repayment term is 10 years, although one can get access to alternate repayment terms extended, graduated and income contingent repayment by consolidating the loans. However, if you consolidate your loans, you could lose your grace period. As your graduation date approaches you will be contacted by the lenders who hold your loan to complete exit counseling and make payment arrangements.
Complete your Direct Loan EC online. If you wish to decline all or part of any loan you have been offered use the Award Letter Response Form in order to communicate those changes to us. Lastly, if you separate from the College i. The maximum loan amount you can borrow is tied to how many credits you have satisfactorily completed at Providence College and any accepted transfer credits if you are an undergraduate dependent, undergraduate independent or graduate student.
The annual borrowing limits for students are as follows:. To determine how much you are eligible to borrow choose the category that best fits your status i.
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