CHAPTER TWO

FEDERAL STAFFORD LOAN (UNSUBSIDIZED)

GRACE PERIOD

• 6 months following last date of attendance on repayment of principal only.

SETTING UP REPAYMENT

• Borrower’s responsibility to contact lender/servicer during 2nd month of grace period. First payment is due in the 7th month after leaving school.


Be sure your lender/servicer is granting your grace period in addition to any deferment‚ economic hardship deferment or forbearance time.

RATES AND REPAYMENT

• All loans disbursed on or after 07/01/94 – variable rate‚ changes on 07/01‚ capped at 8.25%.

• In repayment‚ the in–school‚ grace and deferment rate may increase slightly.
  
  

• The repayment period for the principal of an unsubsidized Stafford begins the day after the expiration of the 6 months grace period.

BORROWER’S FAILURE TO SET REPAYMENT

Any borrower who fails to set up a repayment schedule before the expiration of the grace period is responsible for accrued interest from that point until conversion to installment is complete.

REPAYMENT PERIOD

Lender/servicer must allow at least 5 years‚ but no more than 10 years‚ provided payment does not go below minimum payment (excludes any period of deferment or forbearance).

DEFERMENT PROVISIONS }

FORBEARANCE } See Chapter III

CANCELLATION }