About Federal Stafford Loans
There are two types of Federal Stafford Loans, Subsidized and Unsubsidized.
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The federal government pays the interest while the student is in school, during the 6 month grace period and authorized periods of deferment. |
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The student is responsible for the interest, which can be paid as it accrues, or capitalized (added to the principal). |
Effective for loans first disbursed on July 1, 2006,
the Federal Stafford Loan has a fixed interest
rate. Students receive a 6 month grace period, which
means they do not have to begin repayment until 6 months
after they leave school or drop below half-time status
(as determined by the school).
Stafford Loan Eligibility
A dependent or independent student seeking a Stafford Loan must:
- File a Free Application for Federal Student Aid (FAFSA) to determine your eligibility for financial aid. (Filing a FAFSA is not required for a parent PLUS Loan but it is required for a PLUS Loan for graduate and professional students).
- Be a high school graduate, have a General Education Development (GED) certificate or pass an independently administered test approved by the U.S. Department of Education.
- Be enrolled at least half-time at an eligible institution, working toward a degree or certificate in an eligible program. Correspondence or telecommunications courses are not eligible unless they are part of an associates, bachelors or graduate degree program.
- Be a U.S. Citizen with a valid Social Security Number or an eligible non-citizen.
- Make satisfactory academic progress.
- Properly complete and sign all required documents supplied to you.
- Be registered with the Selective Service if required.
Stafford Loan Limits
Loan limits are effective for loans disbursed on or after July 1, 2008.
Annual Stafford Loan Limits
| Subsidized | Total (subsidized and unsubsidized) |
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| Dependent Undergraduates | ||
| First Year | $3,500 | $5,500 |
| Second Year | $4,500 | $6,500 |
| Third Year & beyond | $5,500 | $7,500 |
| Independent Undergraduates (and dependents whose parents are unable to borrow under the Parent PLUS program) |
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| First Year | $3,500 | $9,500 |
| Second Year | $4,500 | $10,500 |
| Third Year | $5,500 | $12,500 |
| Fourth Year | $5,500 | $12,500 |
| Fifth Year | $5,500 | $12,500 |
| Graduate & Professional Students | $8,500 | $20,500 |
Aggregate Stafford Loan Limits
| Subsidized | Total (subsidized and unsubsidized) |
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| Dependent Undergraduates | $23,000 | $31,000 |
| Independent Undergraduates (and dependents whose parents are unable to borrow under the Parent PLUS program) |
$23,000 | $57,500 |
| Graduate & Professional Students | $65,500 | $138,500 |
Interest Rate and Fees
Effective July 1, 2008, the interest rate for subsidized Federal Stafford Loans for undergraduate students is 6.0%. This rate will drop to 3.4% by the 2011-2012 academic year. The interest rate for subsidized Federal Stafford Loans for graduate students and unsubsidized Federal Stafford Loans for undergraduate and graduate students is fixed at 6.8%.
There is a 1% federal default fee and a 1.0% origination fee for Federal Stafford Loans (subsidized and unsubsidized). The origination fee will be reduced by 0.5% each year, until it is phased out entirely on July 1, 2010.