Stafford Loans are low-cost student loans that are backed by the federal government and are available to eligible students just like you. After searching for grants and scholarships, you should take out a Stafford Loan before considering a private student loan. The interest on Stafford Loans is generally lower, you will have a wide array of repayment options, and you can take advantage of money-saving borrower benefit programs in repayment.

• You may qualify for a 0.25 percentage point interest rate reduction when you make payments on your federal Stafford loans by automatic debit.¹

• Flexible repayment options are available for Stafford loans.
• No payments are required while you are in school at least half time.
• You can manage your account online 24/7.
• There is no prepayment penalty.
• No credit check is required for a Stafford loan.
• Six-month grace period when no payments are required immediately following your graduation or dropping to less than half-time status.

** Exceptions may apply to certain graduate students.

For loans first disbursed July 1, 2009–June 30, 2010: Up to 1.5% in fees that includes a 0.5% federal origination fee and a 1% federal default fee.

• Standard repayment: The standard repayment plan offers the lowest overall cost. When you start repaying, your loans are automatically placed into this plan. Your monthly payment amount remains the same over the term of the loan. Use Sallie Mae's monthly loan payment calculator to see how this plan might work for you.
• Graduated repayment: With graduated repayment, your monthly payments are lower at the beginning of repayment and increase over the term of the loan. You can choose to make payments as low as interest-only for up to four years. Payments for the remaining term will then be higher.
• Income-sensitive repayment: Your payments are based on a percentage of your monthly income — from 4% to 25% — as long as you pay at least the interest that accrues every month.
• Extended repayment: Lower your monthly payment without the inconvenience of applying for a new loan. Plus you can prepay your loan(s) at any time without penalty. If you have more than $30,000 in federal student loans, this option may be the best choice for you.
• Income-based repayment: Income-based repayment (IBR) offers an opportunity to make affordable payments on Stafford, Grad PLUS, and most federal consolidation loans (excluding those with Parent PLUS Loans). The federally mandated program is designed to assist those who have high student debt levels relative to their incomes. IBR payments are based on discretionary income, which takes into account household size. You must demonstrate partial financial hardship to qualify for the IBR plan.

• You are responsible for all of the interest that accrues on your unsubsidized Stafford loan while you are in school, but you do not have to pay the interest during this time. Unpaid interest that is deferred until after graduation is capitalized (added to the loan principal) and you will therefore pay interest on a higher loan amount. Interest that accrues on subsidized Stafford loans while you are in school, during grace and during authorized deferment is paid by the federal government.

Borrower benefit information is valid as of February 18, 2010.