How to Pay Back a Federal Subsidized Stafford Loan

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Paying back a student loan can be a challenge requiring planning and discipline–even if you've graduated and secured employment. The Federal Subsidized Stafford Loan offers a grace period of six months after finishing or withdrawing from college, or going below part-time status, and help is available to re-pay loans or, in some cases, partially or entirely eliminate the loan without payment. However, the loan must be paid off on time or you risk having a bad credit score, having the government withdraw money from your paycheck or tax refund, or even being sued.

Paying Back Your Loan

Make sure you are aware of the amount of money owed on your student loan(s). You can check the status of your debt using the U.S. Department of Education's National Student Loan Data System at

Choose a payment plan. Four payment plans are available depending on your preferences and financial situation. With the standard plan you repay a fixed amount each month with a 10-year limit on repayment. The extended repayment plan has a fixed or graduated repayment with a limit of 25 years (this plan is for loans exceeding $35,000). The graduated payment plan begins with a fixed amount but increases every two years with a limit of 10 years for repayment. Lastly, income-based repayment lets you pay back your loan depending on your income and family size. Not everyone is qualified for the income-based repayment plan.

Sign up for electronic payment. Your loan holder might reduce your interest rate if you decide to go with direct debits from your bank account.

Change your payment plan or get a deferment or forbearance if you are having trouble making payments on loans. In some cases, you can postpone or decrease payments on your loans temporarily.

Cancel your loan entirely if you have become permanently disabled, work in certain public school situations, or (in some cases) file for bankruptcy.

Work in the loan forgiveness program, in which sometimes all or a portion of your loans are canceled for public services. Some volunteer programs include AmeriCorps and the Peace Corps. Also, after working full-time in some jobs (such as with the government, teaching, or social work) for 10 years, you can have whatever is left of your loans forgiven. Plus, the military as well as other employers will pay off some or all of student debt.


  • Loan consolidation can also help you repay student loans.


  • Individual lenders vary, so make sure you know your particular lender's policies.