Planning Ahead for Loan Repayment

You will have a six-month grace period before the first payment must be made on a Federal Stafford Subsidized or Unsubsidized Loan. The grace period starts the day after you cease to be enrolled at least half-time. During the grace period of a Stafford Unsubsidized Loan, accumulating interest must be paid, or it will be capitalized (added back to the principal of your loan).

You can temporarily postpone payment on Subsidized or Unsubsidized Loans by requesting a deferment. If you have a Subsidized Loan, you will not be charged interest during the deferment. However, if you have Unsubsidized Loan, you will be charged interest during the deferment. If you do not pay the interest as it accrues, it will be capitalized and will increase the amount of the loan that you must repay.

Deferments

Deferments may be available if you are:

• pursuing at least half-time study at an eligible school
• enrolled in a graduate fellowship program approved by the U.S. Department of Education
• enrolled in a U.S. Department of Education approved rehabilitation training program for individuals with disabilities
• conscientiously seeking bu unable to find full-time employment (for up to three years)
• experiencing economic hardship (for up to three years)

If you fail to make loan payments on time or if you default on your loans, the consequences are very serious. At the option of the U.S. Department of Education, the entire unpaid balance and accrued interest on your loan can be due immediately. In addition, you can be subject to these penalties:

• You would lose your deferment option.
• You would not be eligible for further Federal Student Aid.
• You account could be referred to a Collection Agency.
• You account would be reported as delinquent to Credit Bureaus, which can damage your credit rating.
• The Federal Government could take your federal tax refunds.
• Late fees, additional interest, court costs, collection fees, Attorney's fees, and other costs could increase your total debt.
• Your employer, at the request of the Federal Government, could withhold (garnish) part of your wages.
• The Federal Government could take legal action against you.

Income Based Repayment (IBR)

If you have a Federal Student Loan, under IBR, your required monthly payment will be capped at an amount that is intended to be affordable based on your income and family size. To learn more about what federal student loans are eligible to be repaid under and IBR plan, whether you're eligible for IBR, as well as the benefits and disadvantages of IBR, visit www.ibrinfo.org.