Stafford Loans Part III

Is it ever possible to postpone repayment of my loan?
Yes. Under certain conditions, you can receive a deferment or forbearance on your loan. A deferment allows you to temporarily postpone payments on your loan. If you have a subsidized loan, you will not be charged interest during the deferment. If your loan is unsubsidized, you will be responsible for the interest on the loan during the deferment. If you don't pay the interest as it accrues, it will
be capitalized and increase the amount you will have to pay (see page 14). See page 28 for the list of deferments available.

For information on deferments available to borrowers with outstanding loans received prior to that date, FFEL Stafford borrowers should contact the lenders or agencies holding the loans. Direct Stafford Loan borrowers should contact the Direct Loan Servicing Center at
The Direct Loan Servicing Center
Borrower Services: 1-800-848-0979 or 1-315-738-6634
Fax: 1-800-848-0984
TTY: 1-800-848-0983
www.dlservicer.ed.gov

You can't receive a deferment if your Stafford Loan is in default.*
If you are temporarily unable to meet your repayment schedule but are not eligible for a deferment, you might receive forbearance for a limited and specified period. During forbearance, your payments are postponed or reduced. Whether your loans are subsidized or unsubsidized, you will be charged interest. If you don't pay the interest as it accrues, it will be capitalized.

For example, you might be granted forbearance if you are

• unable to pay due to poor health or other unforeseen personal problems.
• serving in a medical or dental internship or residency.
• serving in a position under the National Community Service Trust Act of 1993 (forbearance may be granted for this reason for a Direct or FFEL Stafford Loan, but not for a PLUS Loan).
• obligated to make payments on certain federal student loans that are equal to or greater than 20 percent of your monthly gross income.

Deferments and forbearances are not automatic. If you have a Direct Stafford Loan, you must contact your Direct Loan Servicing Center to request either option. If you have a FFEL Stafford Loan, you must contact the lender or agency that holds your loan. For either program, you might have to provide documentation to support your request. You must continue making scheduled payments until you receive
notification that the deferment or forbearance has been granted.

Failing to make payments on your loan might have a negative effect on your credit rating.
Can my loan be discharged (canceled)?
Yes, in certain circumstances. A discharge releases you from all obligations to repay the loan. A complete listing of cancellation provisions is given below.

Your loan can't be canceled because you didn't complete the program of study at the school (unless you were unable to complete the program because the school closed), didn't like the school or the program of study, or didn't obtain employment after completing the
program of study.

Repayment assistance (not a discharge but another way to satisfy your obligation to repay) might be available if you serve in the military. For more information, contact your recruiting officer.

For more information about discharge or repayment assistance, Direct Stafford Loan borrowers should contact the Direct Loan Servicing Center. FFEL Stafford Loan borrowers should contact the lenders or agencies that hold their loans.

Go on to Stafford Loans Part II Page 16 - Direct Stafford Loans Page 18 - FFEL Loans Page 19