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| Fees and Repayment | Rates
Stafford Loans have changeable interest rates that are fixed by the Federal Government every July 1. The current rate for Stafford Loans in grace is 6.54% and 7.14% for active repayment. Rates for Stafford will never exceed 8.25%, by federal mandate.
Loan Fees
Stafford Loans need a total of 4% administrative and guarantee fees upon origination. These fees are a part of this federally sponsored program, they are standard and set by industry standards.
Origination Fee
Each time a disbursement is made the 3% origination fee of the principal is taken out. For example, if the school certifies $30,000 for a school year, an additional $900 is added. If the school year has two disbursements, $450 is deducted during each disbursement. This fee is for Federal Government to outweigh student loan program costs.
Guaranty Fee
The 1% guaranty fee is taken out as insurance against default.
Tax Deduction
Some student loan borrowers can deduct a portion of their interest costs for a given year, under section 221 of the Internal Revenue Code. As of 2001, you could be eligible to deduct up to $2,500 in interest. But this option can be based on the date of loan's disbursement and your income. To find out more you have to consult a tax advisor.
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