Stafford Loans


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Stafford Loans, FFEL and Direct Loans!

Stafford Loans are student loans administered by the U.S. Department of Education. There were two versions of the Stafford Loan. As a result of recent legislation, no further loans will be made under the FFEL Program beginning July 1, 2010. All new Stafford, PLUS, and Consolidation Loans will come directly from the Department under the Direct Loan Program.

You must fill out a FAFSA form to be considered. Once the FAFSA has been processed, the school will inform you of your eligibility for the Stafford Loan. If you are to receive a loan, you will have to sign a promissory note that will spell out the terms and conditions of the loan.

Maximum Loan Amounts

The maximum loan amount depends on your year of study and whether you are a dependent student. For dependent students:

  • If you are a first year student in a program that is at least a full year of study, you can borrow up to $5,500. ($3,500 is the maximum subsidized loan)
  • If you are a second year student, the maximum is $6,500. ($4,500 is the maximum subsidized loan)
  • Junior and senior years, you can receive up to $7,500. ($5,500 is the maximum subsidized loan)

For independent students or dependent students whose parents applied for, but were not able to get a PLUS loan:

  • If you are a first year student in a program that is at least a full year of study, you can borrow up to $9,500. ($3,500 is the maximum subsidized loan)
  • If you are a second year student, the maximum is $10,500. ($4,500 is the maximum subsidized loan)
  • Junior and senior years, you can receive up to $12,500. ($5,500 is the maximum subsidized loan)

What is the interest rate? Direct subsidized and direct unsubsidized Stafford loans for undergraduates first disbursed on or after July 1, 2018, have an interest rate fixed at 5.05 percent. Direct unsubsidized loans for graduate or professional students first disbursed on or after July 1, 2018 and before July 1, 2019 have an interest rate of 6.6%. These rates will remain for the life of the loan. Each year, the loan interest rates may be updated for the following school year, so check before applying.

If you have the financial need, some or all of your Stafford Loans may be subsidized. This means that the federal government will pay the interest on the loans while you are attending school and for up to six months after you leave school. You may also be eligible to get some funds up to the yearly maximum as an unsubsidized loan.
As an example, if you are a first year student and you are eligible for a $1500 subsidized Stafford Loan, you may also borrow $3500 - $1500 = $2000 as an unsubsidized Stafford Loan.

Why didn't I get the whole amount?

For loans disbursed on or after October 1, 2018 and before October 1, 2019, the fee is 1.062%. For loans first disbursed on or after October 1, 2017 and before October 1, 2018, the loan fee is 1.066%. Loans prior to October 1, 2017 had different loan fees. The loan fee will be deducted proportionately from each loan disbursement.

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