Stafford Loans for Undergraduate Students

There are two different types of Stafford Loans, subsidized and unsubsidized.

Subsidized Stafford Loans are awarded based on financial need. You will not be charged interest before you begin repayment or during periods of deferment. The federal government "subsidizes" the interest during these times.

Unsubsidized Stafford Loans are not awarded based on financial needs. Any eligible student can take out unsubsidized Stafford Loans. You will be charged interest from the time the loan is disbursed, to the time the loan is repaid in full.

Stafford Loan Limits

Dependent Students	Annual Loan Limits
First Year	$5,500 ($3,500 subsidized/$2,000 unsubsidized)
Second Year	$6,500 ($4,500 subsidized/$2,000 unsubsidized)
Third Year and Beyond	$7,500 ($5,500 subsidized/$2,000 unsubsidized)

Independent Students	Annual Loan Limits
First Year	$9,500 ($3,500 subsidized/$6,000 unsubsidized)
Second Year	$10,500 ($4,500 subsidized/$6,000 unsubsidized)
Third Year and Beyond	$12,500 ($5,500 subsidized/$7,000 unsubsidized)
Graduate or Professional	$20,500 ($8,500 subsidized/$12,000 unsubsidized)

Lifetime Limits
Undergraduate Dependent	$31,000 (Up to $23,000 may be subsidized)
Undergraduate Independent	$57,500
Graduate or Professional	$138,500 (Up to $65,000 may be subsidized) or $224,000 (for Health Professionals)
For loans first disbursed on or after July 1, 2008.

The amount you can borrow is based on your grade level and your status as a student. Independent students may be eligible to borrow more because they are paying for college without assistance from family.

It is important to note that even if a student is financing their education on their own, dependency status is still determined by the school.

Based on your award letter, you may not always qualify for the maximum Stafford Loan amount. For additional loan funding, consider private student loans which allow you to borrow up to the total cost of education to qualify for Stafford Loans.
How do I apply for a Stafford Loan?

You first must complete the FAFSA or Renewal FAFSA (for returning students). After the FAFSA is processed, your school will review the results and inform you of your loan eligibility by sending you an award letter. Once your award letter is received, you should apply for the Stafford Loan, as well as look at other federal student loans. If you aren't eligible for federal loans, you can then apply for private student loans.

less other financial aid received.
Am I eligible for a Stafford Loan?

You must be enrolled at least half-time (based on your school's definition of full and half time status)
When do I receive the Stafford Loan funds?

Your lender will disburse your Stafford Loan funds directly to your school in two installments – fall semester and winter semester. Your loan money will be used to pay your tuition and fees. If you have funds left over, your school will credit your account or pay you directly based on your school's policy.
What if I want to cancel my Stafford Loan?

Your school must notify you in writing whenever your account is credited with your loan proceeds. This notification must be sent to you no earlier than 30 days before and no later than 30 days after the school credits your account. You may cancel all or a portion of your loan if you inform your school within 14 days after the date that your school sends you this notice or by the first day of the payment period, whichever is later. Your school can tell you the first day of your payment period.

What are the Stafford Loan interest rates?

The interest rates for the 2009-2010 academic year are:

* Subsidized Stafford loans are at a fixed rate of 5.6%
* Unsubsidized Stafford loans are at a fixed rate of 6.8%
* All Stafford loans for graduate students are at a fixed rate of 6.8%

Rates can change yearly, check back with us for updates on an upcoming school year.
Will I pay any fees for the Stafford Loan?

There may be fees associated with the Stafford Loan. The fees vary by lender and can include a 1% default fee plus a 3% origination fee. The 1% default fee is a fee used by the lender to create a reserve to protect the loan program in instances when borrowers default on their loans. Default and origination fees, if charged, are deducted from the loan funds before they are sent to the school.
What are the repayment options for a Stafford Loan?

The standard repayment term for this loan is 10 years. You may be able to extend repayment by deferring or consolidating your federal loans.

You can choose one of the following plans:

* The Standard Repayment Plan requires you to pay a fixed amount each month based on your principle and interest but will be no less than $50 or the interest that has accrued.
* The Graduated Repayment Plan allows you to make lower payments at the beginning of repayment then, over time, your payments begin to increase. Each of your payments must equal the interest accrued on the loan between scheduled payments. Initial payments generally cover “interest-only” for the first few years.
* The Income-Sensitive Repayment Plan bases your monthly payment on your yearly income and your loan amount. Payments may change as your income rises or falls.
* The Extended Repayment Plan is for borrowers with FFELP loans totaling more than $30,000. This plan offers a choice of fixed or graduated payments over a period of up to 25 years.
* To consolidate your loans, please visit our consolidation section. Please note that deferment does not fix your rates, it merely puts payment on hold. To lock your rates, you must consolidate your loans.