| The government does not pay interest on the loan. The student is
responsible for all interest that accrues on this loan during the in-school, grace,
deferment and repayment periods. Students must apply for subsidized loans first
Variable rate of interest adjusted annually on July 1, based on 91-day Treasury Bill,
auctioned prior to June 1, plus 1.7% for in-school, grace and deferment periods and plus
2.3% during periods of repayment and forbearance. Changes July 1 each year
Interest payments can be paid, monthly, quarterly, or be capitalized by the lender and
added to the loan principal
Repayment of principal begins six months after the student ceases to be enrolled at
least half-time
Student pays 3% origination fee and 1% insurance fee. (Same as subsidized). The
1% insurance fee will be eliminated for new loans disbursed on or after July 1, 1999
Borrower can receive subsidized and unsubsidized loans for the same loan period
One common application form for both subsidized and unsubsidized Federal Stafford Loans
Loan disbursements must be made co-payable to the borrower and the institution and are
multiply disbursed. |
