Your Payments & Repayment Options

Your Payments

Repayment of most subsidized and unsubsidized Stafford Loans, made under either FFELP or Direct Loans, begins six months after you have graduated, or are no longer enrolled at least half-time. This is a six-month grace period. For Perkins Loans, the grace period is nine (9) months. The holder of your loan or servicer will mail you a repayment schedule (which may be in the form of a billing statement or coupon book), approximately 30 days before your first loan payment is due. It is very important that you keep the holder of your loan informed of your current address and contact information. The repayment schedule will reflect the total balance of your loan, your interest rate, amount, and due dates of your monthly payments and the holder's address where you must send your payments. Carefully review all the information on your repayment schedule to make sure that it is correct. If the information is not accurate, or you do not receive this document, contact the holder of your loan immediately.

The federal government pays (subsidizes) the interest on your Subsidized Stafford/Direct Loan while you are enrolled in college at least half-time and during your six (6) month grace period. The interest on your Unsubsidized Stafford/Direct Loan is not paid by the federal government and begins to accrue once you receive your loan. You choose to either pay this interest quarterly or have it added (capitalized) to your loan principal when you sign the Master Promissory Note for the loan. The interest on a PLUS Loan begins to accrue on the date the loan is made. Repayment begins 60 days after the loan is delivered to the parent(s). For more details on the different loan programs available, see our Loan Programs section.

Your Repayment Options

It is in yours and our best interests to ensure that you can pay your student loans in a timely manner. GSFC understands that everyone's situation is unique, and we are pleased to offer the following repayment options for borrowers of student loans:

1. Standard Payment Plan — Repayment schedules are set up for a 10 year repayment term with a minimum payment of $50 depending on the amount borrowed. You pay the same amount each month throughout the repayment period. In the long-run, the standard payment plan is the least expensive since you will pay the least in interest. For example, at today's rate (effective 07/01/07) of 6.8% for a loan of $10,000 on a 10-year repayment schedule, your monthly payment would be approximately $115 with a total repayment amount of $13,890.

2. Income Sensitive Repayment Plan — this option takes into consideration your total gross monthly income. Your monthly payment is then based on the amount of your income. Under this option:

   • You provide your lender with information about your total gross monthly income received from all sources. If married, this does not include your spouse's income.

   • The information you provide to your lender cannot be more than 90 days old.

   • Our lender determines whether you qualify for the income-sensitive repayment option.

   • Your income-contingent repayment plan is reviewed each year by your lender.

   Using the same interest rate, loan amount and ten (10) year repayment term as above, your monthly payments under the income-sensitive schedule would begin at approximately $83 and be $115 for the remaining time. Your total repayment amount would be approximately $16,056.

3. Graduated Payment Plan — Under this option, your monthly payments start out smaller and increase gradually over the term of your repayment schedule. This plan may be a good choice if you are starting out in employment that has lower than average income but is expected to rise significantly over time.

   Your lender will ensure that no one payment will be more than three (3) times the amount of any other payment. For example, if you started out paying $50 monthly, then toward the end of your repayment schedule your final monthly payments would not be more than $150.

   You will pay more in total interest and overall repayment amount under the graduated option than you would under the standard option. For example, using the same interest rate 6.8%, loan amount ($10,000), and repayment schedule (10 years), your monthly payment would begin at approximately $57 for the first two years and $170 for the remaining eight (8) years. Your total repayment amount would be $14,926 compared to $13,890 under the standard option.

For information on postponing payments, please see our section on Deferments and Forbearances.

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