The loan will be canceled in the event of death or total permanent disability. The Department of Defense will repay a portion of the Federal Stafford Loan if borrowers serve as enlisted personnel in certain selected specialties of the U. S. Army. Failure to repay the student loan when required will affect future credit ratings and will declare students as being in default. The federal and state governments will also withhold any tax refunds to pay for part of the defaulted amount. Once the default status has been determined, students will not be eligible to receive any federal or state financial aid funds at any postsecondary institution until the student submits written documentation to justify that at least six consecutive monthly payments have been made.
More information is available at the lending institution.
All students must attend an entrance interview before receiving the loan funds and an exit interview before withdrawing, graduating or dropping below half-time status. Repayment of interest and principal starts 60 days after the loan is disbursed. This loan is based on a credit analysis of the parents, which is determined by the lending agency. Interest rates vary depending on the federal interest rate. The lending agency can provide more information on this loan.