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Except in cases of cancellation, you cannot avoid repayment--even if you do not complete your education. Loan repayments are canceled only if the student dies or becomes totally and permanently disabled. For students enlisted in the U.S. Army, the Army Reserves, the Army National Guard, or the Air National Guard, the Department of Defense may repay a portion of a Stafford loan. If you think you qualify, contact your education officer. Minimum payments generally start at $50 a month.
The interest on Stafford loans disbursed after 07/01/06 is a fixed rate of 6.8 %. These loans are made by a lender, such as a bank, credit union, or savings and loan association, and they are guaranteed by a guarantee agency and insured by the federal government.
There are graduated repayments, fixed repayments, and income-sensitive repayments. Another repayment option is loan consolidation. Students who have taken out more than one student loan may be able to pay them all back using one repayment plan. Interest rates may change since consolidation of loans are based on a weighted average rounded up to the nearest whole percent. Only Stafford and Educational Loans for Students are eligible for consolidation. Contact your service provider for more information.
