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Stafford Loans

The Federal Stafford Loan is the most popular low-interest education loan designed for undergraduate and graduate students. This loan is guaranteed by the federal government and offers flexible repayment options. Schools that participate in the William D. Ford Federal Direct Loan (Direct Loan) Program offer Stafford Loans.

Subsidized vs. Unsubsidized Stafford Loans

There are two types of Federal Stafford Loans: subsidized and unsubsidized. Depending on household income, a student may be eligible for one or both varieties of student loans. The school will specify the loan type for which the student qualifies.

  • Subsidized Stafford Loans are awarded on the basis of financial need. The government pays the interest while the student is in school, in deferment (if applicable), and during the grace period before repayment begins.
  • Unsubsidized Stafford Loans are not based on income, but not all students will be eligible for the maximum loan amount. A student’s year in school, their additional financial aid awards and the estimated cost of attendance will be factored into the eligibility decision. Student who borrow unsubsidized Stafford Loans are responsible for all interest that accrues while they are in school, in deferment, and during the grace period. As long as the student doesn’t exceed yearly Stafford Loan borrowing limits, they may take out both subsidized and unsubsidized loans.

If you're a dependent undergraduate student, each year you can borrow up to:

  • $5,500 if you're a first-year student enrolled in a program of study that is at least a full academic year. No more than $3,500 of this amount may be in subsidized loans.
  • $6,500 if you've completed your first year of study and the remainder of your program is at least a full academic year. No more than $4,500 of this amount may be in subsidized loans.
  • $7,500 if you've completed at least two years of study and the remainder of your program is at least a full academic year. No more than $5,500 of this amount may be in subsidized loans.

If you're an independent undergraduate student or a dependent student whose parents have applied for but were unable to get a PLUS Loan (a parent loan), each year you can borrow up to:

  • $9,500 if you're a first-year student enrolled in a program of study that is at least a full academic year. No more than $3,500 of this amount may be in subsidized loans.
  • $10,500 if you've completed your first year of study and the remainder of your program is at least a full academic year. No more than $4,500 of this amount may be in subsidized loans.
  • $12,500 if you've completed two years of study and the remainder of your program is at least a full academic year. No more than $5,500 of this amount may be in subsidized loans.

The student is responsible for all interest that accrues while they are in school, in deferment, and during the grace period. As long as the student doesn’t exceed yearly Stafford Loan borrowing limits, they may take out both subsidized and unsubsidized loans.

$20,500 (unsubsidized only) for graduate/professional students who are independent students. There are no dependent loan options for graduates since all graduate/professional students are considered independent.

$31,000 – no more than $23,000 of this amount may be in subsidized loans for dependent students when it comes to subsidized and unsubsidized aggregate loan limits.

-For independent students, $57,500 – no more than $23,000 of this amount may be in subsidized loans - is the limit for undergraduates when it comes to subsidized and unsubsidized aggregate loan limits. $138,500 for graduate or professional students – no more than $65,500 of this amount may be in subsidized loans – is the limit for independent students, when it comes to subsidized and unsubsidized aggregate loan limits.

Interest Rates and Fees

  • Interest rates on current subsidized Stafford Loans at the undergraduate level, first disbursed on or after July 1, 2015 and before July 1, 2016 are fixed at 4.29%.
  • Interest rates on current unsubsidized Stafford Loans at the undergraduate level, first disbursed on or after July 1, 2015 and before July 1, 2016 are fixed at 4.29% Interest rates for unsubsidized Stafford Loans at the graduate or professional level are fixed at 5.84%
  • In addition to interest rates, there are loan fees charged to 1.073% for loans first disbursed on or after Oct. 1, 2014 and before Oct. 1, 2015 and 1.068% for loans first disbursed on or after Oct. 1, 2015, and before Oct. 1, 2016.

Eligibility Requirements

  • Enrolled at least half-time at an eligible school and maintaining satisfactory academic progress
  • A U.S. citizen or a permanent resident of the U.S. or an eligible territory
  • Not currently in default. Must not owe a refund on any Title IV loan or grant
  • Registered with Selective Service (if borrower is a male under age 25)

Loan Repayment

  • Students will have a six-month grace period after graduating, leaving school, or dropping below half-time status. After this time, payments must be made.
  • During the grace period, interest will not be charged on subsidized loans but will be charged on unsubsidized loans.
  • Payments are usually due on a monthly basis.
  • Under certain circumstances, e.g. health problems, a student may be eligible for loan deferment.

For more information on Federal Stafford Loans, please visit www.studentaid.ed.gov.

Last Edited: August 2015

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