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Federal Stafford Loans

Stafford Loan Information:

What are Stafford Loans?
Direct and FFEL Stafford Loans are either subsidized or unsubsidized. You can receive a subsidized loan and an unsubsidized loan for the same enrollment period.

A subsidized loan is awarded on the basis of financial need . You won’t be charged any interest before you begin repayment or during authorized periods of deferment). The federal government “subsidizes” the interest during these periods.

An unsubsidized loan is not awarded on the basis of need. You’ll be charged interest from the time the loan is disbursed until it’s paid in full. If you allow the interest to accrue (accumulate) while you’re in school or during other periods of nonpayment, it will be capitalized—that is, the interest will be added to the principal amount of your loan, and additional interest will be based on that higher amount.

Who can get a Stafford Loan?
If you’re a regular student enrolled in an eligible program at least half time, you may receive a Direct or FFEL Stafford Loan. You must also meet other general eligibility requirements.

How do I get this loan?
You apply using the FAFSA or Renewal FAFSA, just the way you would for other federal student aid. Then, you sign a promissory note that you’ll get from your lender, for FFEL Stafford Loans, or from your school, for Direct Loans. The promissory note is a binding legal document; when you sign it, you’re agreeing to repay your loan under certain terms. Read the note carefully and save it.

How much can I borrow?
If you’re a dependent undergraduate student you can borrow annually up to

$2,625 if you’re a first-year student enrolled in a program of study that is at least a full academic year.
$3,500 if you’ve completed your first year of study and the remainder of your program is at least a full academic year.
$5,500 if you’ve completed two years of study and the remainder of your program is at least a full academic year.

If you’re an independent undergraduate student or a dependent student whose parents are unable to get a PLUS Loan (see page 24), you can borrow annually up to

$6,625 if you’re a first-year student enrolled in a program of study that is at least a full academic year (only $2,625 of this amount may be in subsidized loans).
$7,500 if you’ve completed your first year of study and the remainder of your program is at least a full academic year (only $3,500 of this amount may be in subsidized loans).
$10,500 if you’ve completed two years of study and the remainder of your program is at least a full academic year (only $5,500 of this amount may be in subsidized loans).

For periods of study that are less than an academic year, the amounts you can borrow will be less than those listed. Check with your school’s financial aid office to find out how much you can borrow.

Generally, if you’re a graduate student, you can borrow up to $18,500 each academic year. (Only $8,500 of this amount may be in subsidized Stafford Loans.)

Generally, the total debt you can have outstanding from all Stafford Loans combined is

$23,000 as a dependent undergraduate student.
$46,000 as an independent undergraduate student (only $23,000 of this amount may be in subsidized loans).
$138,500 as a graduate or professional student (only $65,500 of this amount may be in subsidized loans). The graduate debt limit includes any Stafford Loans received for undergraduate study.

Stafford Loans Continued.....

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