| Subsidized Federal Stafford Loan |
Your eligibility for this loan is determined by
the results of the FAFSA. Interest is paid by the federal
government during your in-school, grace (six month period which
occurs after in-school) and deferment periods. Fixed rate
6.8%. |
| Unsubsidized Federal Stafford Loan |
You are responsible for interest payments
during all phases of the loan (in-school, grace, deferment and
repayment). Principal payments can be postponed, however,
interest will be capitalized (lender will add the amount of
interest that has accrued to the principal balance). At
repayment time, the amount you owe will be increased by the
interest added. Fixed rate 6.8%. |
| Grad PLUS Loan |
This is an 8.5% fixed rate unsubsidized loan.
It can be applied for after you have applied for after your
Subsidized and Unsubsidized Stafford Loan eligibility has been
determined. |
| Interest rate |
The cost you pay to borrow the money. Annual
variable rate that changes each July 1 and is capped at 8.25% on
the Federal Subsidized and Unsubsidized Stafford Loan. |
| Fees |
Deducted proportionately from each loan
disbursement (Check). 3% origination fee paid to the Department
of Education. Up to 1% guarantee fee paid to the guarantee
agency. |
| Repayment |
The standard maximum repayment term is 10 years
and a $50 minimum monthly payment is required. As the amount
that you borrow increases, the monthly payment will increase
too. |
| Accrued Interest |
Interest that accumulates on the unpaid balance
of your loan principal. |
| Capitalization of Interest |
Addition of accrued, unpaid interest to the
principal of your loan. |
| Default |
Failure to repay your loan on time, or in
accordance with other terms of the promissory note. |
| Deferment |
Postponement of repayment due to certain
conditions (in-school at least ½ time, unemployment, economic
hardship, graduate fellowship, or rehabilitation training).
Contact your lender to apply |
| Forbearance |
A temporary cessation or reduction of payments
while interest continues to accrue on your account. A
forbearance is granted at the lender's discretion. |
| Grace Period |
Specified period of time (six months) after you
graduate or leave school in which you need not make principal
payments on your loan. |
| Consolidation |
Under consolidation, your outstanding federal
loans (subsidized Stafford, unsubsidized Stafford, Perkins,
Direct Subsidized Stafford, Direct Unsubsidized Stafford, SLS,
FISL and HPSL) would be combined into a single new loan with new
terms, i.e. a new interest rate and a longer repayment period
(up to 30 years). While this may reduce your monthly payments,
it will result in higher total interest costs overall. |
