How to Apply

THE FEDERAL DIRECT STAFFORD LOAN

 

The Federal Direct Stafford Loan is the most common student loan program for funding undergraduate and graduate education.  There are two types of Stafford loans, Subsidized and Unsubsidized, and they differ in the following ways:

Need-based versus Non-need-based - The subsidized loan is considered a need based loan which means it is only awarded to those students who can demonstrate a financial need for the loan funds.  The unsubsidized loan is available to anyone whose other financial aid doesn't meet the Cost of Attendance.  Both loans require the borrower to complete the Free Application for Federal Student Aid (FAFSA).

In-School Interest Subsidy - Subsidized Stafford loans are interest-free as long as the borrower is enrolled at least half-time in a degree program at a university or college.  Beginning July 1, 2012 only undergraduate students can be awarded subsidized loan eligibility.  Unsubsidized Stafford Loans begin accruing interest from the date of disbursement and interest continues to accrue while the borrower is in school.

Interest Rates for both loans are fixed rates. (see chart below).

Loan Limits differ depending on the borrower's grade level, type of loan, dependency status, and whether or not the borrower's parent's PLUS Loan has been denied.

  • An undergraduate student's dependency status is determined by the financial aid office.
  • If a student is deemed independent, or his/her parent is denied a PLUS Loan, the student is eligible for additional unsubsidized loans over the amount listed on the chart below.  Freshmen and Sophomores may have up to $4,000, and Juniors and Seniors up to $5,000 in additional unsubsidized loan funds.
  • The unsubsidized loan limits shown in the chart below are based on the borrower receiving the maximum amount of subsidized Stafford loan.  If the borrower is not eligible for the maximum subsidized Stafford loan, then the borrower may be able to use additional unsubsidized loan funds to the combined limit, not to exceed the Cost of Attendance less other financial aid.

 

    Grade Level

Loan Limits

   Subsidized      Unsubsidized      Combined

Interest Rates

Subsidized     Unsubsidized
                                                                          Annual Limits

      Undergraduate

Freshman

Sophomore

Junior/Senior

 

                  $3,500           $2,000            $5,500

                  $4,500           $2,000            $6,500

                  $5,500           $2,000            $7,500

 

 

       3.40%            6.80%

Graduate & Professional

All Grade Levels

      Medical Student

1st - 3rd Years

4th Year

 

                                     $20,500         $20,500

 

                                     $47,166         $47,166

                                     $40,500         $40,500

 

 

       6.80%            6.80%

 

 
                                                                Maximum Aggregate Limits

Undergraduate

Undergraduate (independent

or with PLUS Loan denial)

Graduate or Professional

Medical Student

           $23,000            $8,000            $31,000

           $23,000            $34,500          $57,500

 

          $65,600*           $73,000          $138,500

          $65,500*           $158,500        $224,000
* including undergraduate Stafford loans

Eligibility: To be eligible for a Stafford loan, you must be a U.S. citizen or permanent resident, not have previous defaults on a federal loan, be enrolled or plan to enroll at least half-time, and maintain satisfactory academic progress.

Loan Fees: Both the subsidized and the unsubsidized Undergraduate Stafford Loans have a 1.051% origination fee.  The fee is deducted from the loan proceeds at disbursement. 

Grace Period: Stafford Loans have a six month grace period.  Repayment does not begin until six months after the student graduates, withdraws, or is enrolled less than half-time.