Undergraduate, Graduate or Law students expecting to meet one of the following conditions should obtain information about the following bulleted topics:

1. Enrolling less than half-time
   (6 credits undergraduates, 5 credits graduate & law)
2. Leaving college
3. Graduating

 

• Exit Counseling for Direct Stafford Loans
  
  Prior to graduating or leaving college, borrowers are required to complete an exit counseling session. The link provided above is to the Direct Lending web site and is intended to provide information about your rights and responsibilities as a borrower. In most cases, you will also obtain information about the source and amounts of all of your federal educational loans.
  
  
  
• Grace Period for Direct Stafford Loans:
  
  After you graduate, leave school, or drop below half-time enrollment, you have six months before you must begin repaying your loans. This six-month period is called the "grace period".
  
  If you have Direct Subsidized Loans, you won't be charged interest during your grace period.
  
  If you have Direct Unsubsidized Loans, you will be responsible for the interest that accrues during the grace period. You may either pay this interest as it accrues or have it capitalized (added to the principal balance of your loan) when you start repaying your loan.
  
  Your payment period begins the day after your grace period ends. Your first payment will be due within 45 days after your repayment period begins.
  
  
  
• Consolidation:
  
  This is the process of combining one or more eligible educational loans into a single new loan. The Direct Loan Program offers a Direct Consolidation Loan for those borrowers who are interested in consolidating their eligible educational loans.
  
  
  
• Loan Repayment for Direct Stafford Loans:
  
  The Direct Loan Program offers a range of repayment plans:
  
  • Standard Repayment plan - fixed payment for up to 10 years to repay.
    
    
  • Extended Repayment plan - fixed payment for 12 to 30 years to repay, depending on loan balance.
    
    
  • Graduated Repayment plan - smaller payments at first and larger payments later for up to 30 years to repay, depending on loan balance.
    
    
  • Income Contingent Repayment (ICR) plan - payment amount is based on your loan balance and your income (and your spouse's income if you are married) and can vary year to year for up to 25 years. The Income Contingent Repayment plan is NOT available to Parent PLUS loan borrowers.
  
  Changing repayment plans is a good way to manage your loan debt when your financial circumstances change. For example, you can usually lower your monthly payment by changing to another repayment plan with a longer term to repay the loan. There are no penalties for changing repayment plans.
  
  
  
• Deferment
  
  A deferment is a temporary suspension of your monthly loan payment. There are many different types of deferments available.
  
  • During deferment of Direct Subsidized Loans, principal payments are postponed and interest is not charged.
    
    
  • During deferment of Direct Unsubsidized Loans, principal payments are postponed, but interest is charged. Unpaid interest will be added to the principal balance (capitalized) of your loan(s) at the end of the deferment period. This will increase the amount you owe.
  
  A complete list of all deferments available for Direct Stafford Loans, their eligibility criteria, and the form to download can be seen by accessing Deferment Forms on the Forms section of the Direct Lending web site.
  
  

• Forbearance
  
  A forbearance is a form that can be obtained and used to temporarily suspend or reduce your monthly loan payments. You may qualify for a forbearance if you are willing but unable to make loan payments due to certain types of financial hardships.
  
  A complete list of forbearances and their eligibility criteria can be seen by accessing Forbearance Forms on the Forms section of the Direct Lending web site.
  
  
  
• Loan Forgiveness
  
  • Loan Forgiveness – Teachers

The Teacher Loan Forgiveness Program was instituted by the U.S. Department of Education to encourage individuals to enter and remain in the teaching profession. The Program grants loan forgiveness of up to $17,500 for teachers in certain specialties and up to $5,000 for other teachers, who teach for five years in certain low-income schools and meet other requirements. This forgiveness benefit is available to Direct Loan and Federal Family Education Loan (FFEL) program borrowers who did not have an outstanding balance on a Direct Loan or FFEL Program loan on October 1, 1998, or on the date they obtained a Direct Loan or FFEL program loan after October 1, 1998.

• Loan Forgiveness -- Child Care Providers
  
  If you receive a degree in the field of early childhood education, become a childcare provider in a facility that serves a low-income community, and meet other eligibility requirements, you may be eligible to have up to 100 percent of your combined Direct Loan/FFEL debt canceled. However, this type of loan forgiveness depends upon the availability of federal funds. If no funds are available, you will not be able to receive this type of forgiveness.

 

• Loan Forgiveness -- Public Service
  
  As of October 1, 2007 borrowers of Direct Loans may be eligible to have a portion of their student loan debt forgiven. The Public Service Loan Forgiveness program is administered by Direct Loan Servicing. The National Association of Student Financial Aid Administrators has created an FAQ for this program.

Frequently Asked Questions regarding Public Service Loan Forgiveness

• Further information about all these topics can be obtained from Direct Loan Servicing Online.