The repayment period may be as long as 10 to 25 years, and payment may be deferred for full-time enrollment in graduate school. Because many factors are included, there is no income-level cutoff in determining eligibility for subsidized Federal Stafford Loans. Students who do not qualify for the full subsidized Federal Stafford Loan may apply for an unsubsidized Federal Stafford Loan. The only difference between these loans is that the student is responsible for the interest on the unsubsidized loan during the enrollment period. Parent Loan Programs Evaluation of the different programs requires consideration of both the amount available per year and the terms of repayment.
Some programs permit interest-only payments during periods of enrollment.
Interest-only payments enable you to keep the monthly payments as low as possible during the period of enrollment but will increase either the length of repayment or the size of the monthly payment after graduation. Some programs provide the option of home equity security, which may enable you to deduct the interest on your federal income tax return. The fees you will pay for the paperwork necessary to secure the loan with home equity will vary. The Federal Taxpayer Relief Act of 1997 includes tax deductibility of some federal education loan interest payments for eligible filers.