Student Lending Analytics suggests the following twelve points that every Stafford borrower should be aware of:.

• This is a loan that must be repaid. You are receiving a Federal Stafford loan to help cover the costs of your education. You must repay this loan. You are responsible for repaying this loan even if you are dissatisfied with your education, do not complete it, or cannot find work in your area of study. Borrow only the amount you need.

• You can cancel the loan. Before your lender sends your loan money to your school, you may cancel or reduce the amount of your loan by writing to your school or lender. After your loan money is sent to your school, you may cancel all or part of your loan by notifying your school within certain time frames.

• Future loans can be made using the same MPN (Master Promissory Note) that you sign for your first loan. If you continue to attend a participating school located in the United States, you may receive multiple loans under the same MPN for up to 10 years.

• Here is how much you can borrow:

   

  	Subsidized	Subsidized and Unsubsidized
  Dependent Undergraduates	Annual	Total Annual
  First Year	$3,500	$5,500
  Second Year	$4,500	$6,500
  Third Year and Beyond	$5,500	$7,500
  Independent Undergraduates
  First Year	$3,500	$9,500
  Second Year	$4,500	$10,500
  Third Year and Beyond	$5,500	$12,500
  Graduate & Professional Students	$8,500	$20,500
  	Aggregate	Total Aggregate
  Dependent Undergraduates	$23,000	$31,000
  Independent Undergraduates	$23,000	$57,500
  Graduate and Professional Students	$65,500	$138,500

   

• Origination fees and default fees may apply.  Federal law requires an origination fee and a federal default fee for each loan made under this MPN.
• Starting July 1, 2009, the origination fee on Stafford loans go to 0.5% while the federal default fee remains at 1.0%.

• You have options on how you choose to repay your loan and can change them at least once per year.  Your lender will give you the choice of a Standard Repayment Plan, a Graduated Repayment Plan, an Income-Sensitive Plan or, if you are eligible, an Extended Repayment Plan.  Effective July 1, 2009, if you are eligible, you may also choose an Income-based Repayment Plan under which your monthly payment will be based on your income during any period when you are experiencing a partial financial hardship.  You may request to change your repayment plan at any time, but your lender may limit you to one such change each year.  These plans are designed to give you flexibility in meeting your repayment obligation. 

• Once in repayment, make your payments within 15 days or expect a late charge.  Your lender may collect a late charge from you if you do not make any part of a payment within 15 days after it is due.  Your lender may only collect one late charge for each payment, not matter how many days the payment is late.  Your lender may also collect from your certain limited charges and fees involved in collecting your loan in accordance with the Department's regulations. 

• Consolidation provides a way to package all of your federal loans into one loan to make it easier for you; it also provides the option to extend payments to 30 years.  If you are no longer enrolled in school as at least a half-time student and you are in the grace period or in the repayment period on your loan, you may be eligible to consolidate all of your eligible federal education loans into one loan.  Consolidating your loans may give you up to 30 years to pay them back and may lower your monthly payments; however, you may be repaying your loans for a longer period and pay more interest.  For example, you will not have to make payments while you are attending school at least half time or up to 3 years while you are unemployed. 

• If your loan is unsubsidized, interest will be added to the loan IF you do not make payments while you are in school.  You must pay the interest on unsubsidized loans during deferment periods, or it will be added to the principal amount of your loan.  If interest is added to the principal amount, you will then pay interest on the larger amount.  Having interest added to the principal amount of your loan may also cause your monthly payment amount to increase.  

• The lender may provide you with the option to reduce or postpone payments if you experience a temporary hardship.  If you cannot make scheduled payments and do not qualify for a deferment, your lender may allow you to temporarily make smaller payments or temporarily stop making payments. 

• Your loan can be forgiven for a number of reasons.  Your loan will be discharged (forgiven) when (i) acceptable documentation of your death is given to your lender, (ii) you cannot complete a course of student because your school closes, (iii) your school falsely certifies your loan eligibility, (iv) a loan in your name was falsely certified as a result of a crime of identity theft, or (v) you become totally and permanently disabled and meet certain other requirements.  Your loan may also be discharged up to the amount of any refund that your school should have made, but did not send to your lender. 

• Your loan may not be discharged in bankruptcy.  Your loan will not automatically be discharged in bankruptcy.