Students will begin repayment of their Federal Direct Stafford Loan when they graduate, withdraw, take a leave of absence, become administratively suspended and/or drop below half-time enrollment. At this time, the servicer of the student’s Federal Direct student loan will be notified, and the student will be informed regarding repayment options.  The monthly payment amount can vary depending on how much loan debt the student has accumulated, the interest rate of the loans, and the repayment option the student selects.  During the Direct Stafford Loan grace period, students will have the opportunity to select one of the repayment plans listed below.  For more information, go to

  • Standard or Level: This is the most common and least expensive payment option where students have fixed monthly payments of at least $50 for a ten (10) year period.  If your monthly payments exceed 10% of your gross monthly income, you should consider one of the other repayment options.
  • Graduated: This option allows the flexibility of having your payments start out low and increase over time.  Generally, this is evaluated every two (2) years.  The option is good if you have limited income and expect higher earnings over the ten (10) year repayment period.
  • Pay As You Earn:  Monthly payments are based on your income and your total loan amount over a period of twenty (20) years.  Your payment changes as your income changes.  Maximum monthly payments will be 10% of discretionary income.
  • Income-Based: Monthly payments are based on your income and your total loan amount over a period of Twenty five (25) years.  Payments can be adjusted annually to account for changes in your income. Maximum monthly payments will be 15% of discretionary income.
  • Extended: Monthly payments are fixed or graduated over a period of up to twenty-five (25) years.  Extended repayment plans are available only to new Direct Loan Borrowers who currently have an outstanding Direct Loan balance of more than $30,000.  The total interest costs are greater for the twenty-five (25) year loan period versus the ten (10) year loan period.
  • Income Contingent: This option allows the monthly payment to be adjusted each year based on the annual income (including your spouse’s income if married), your family size, and the total amount of your Direct loans.  After twenty-five (25) years, any unpaid loan amount will be forgiven.  This plan is currently available only to Direct Subsidized or Unsubsidized Loan borrowers. 

Deferment of Federal Stafford Loans: Students may be eligible to receive a deferment on their Federal Stafford Loans as long as the loan is not in default status.  A deferment allows students to temporarily postpone payments on the Stafford Loan.  Students may be eligible for a deferment if they are enrolled at least half-time at a postsecondary school, are in an approved rehabilitation training program for the disabled, are unable to find full-time employment, and/or they can demonstrate economic hardship.

Forbearance: If a student experiences difficulty meeting repayment obligations and is not eligible for a deferment, the servicer may grant them forbearance for a limited period of time. During the period of forbearance, the student’s payments are postponed or reduced, and sometimes the repayment period can be extended.  Students will be charged interest on the loan during the period of forbearance.  Students may be eligible for a forbearance if they are unable to make payments due to poor health or other unforeseen personal problems, are serving in medical or dental internships or residency, or they are obligated to make payments that are equal to or greater than 20 percent (20%) of their monthly gross income.  Students can request a forbearance by contacting the lender that services their federal loans.    

Federal Direct Loan Consolidation: This allows you to combine multiple federal education loans into a single Direct Consolidation Loan which may allow students to extend the repayment period. Students should note that while extending the repayment period, they may pay more interest over the life of the Direct Consolidation Loan. The interest rate for a Direct Consolidation Loan is based on a weighted average of the loans being consolidated. Depending on your total loan balance, you may be able to lower your monthly payments. For additional information regarding Direct Loan Consolidation contact the Direct Loan Consolidation Center at 1-800-557-7392.


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