Federal Stafford Loan Information 2013 - 2014

The Federal Stafford Loan ("Stafford Loan") is the most popular low-interest loan offered to graduate and undergraduate students.  Schools that offer Stafford Loans participate in the William D. Ford Federal Direct Loan ("Direct Loan") Program.  There are two types of loans offered - Subsidized Loans and Unsubsidized Loans.

Subsidized and Unsubsidized Loans
Each participating school specifies the type of loan to be offered.  The biggest factor in determining which type of loan is offered is household income.  In some situations, students may be offered both types of loans.

• Subsidized Stafford Loans are awarded based on financial need. The U.S. Department of Education is responsible for paying loan interest while the student is in school, in deferment, and during the grace period before repayment must begin.
• Unsubsidized Stafford Loans maximum amounts are decided by the student’s year in school, their additional financial aid awards and the estimated cost of attendance. Student who take advantage of  unsubsidized Stafford Loans are responsible for paying all interest that accrues while they are in school, in deferment, and during the grace period before repayment must begin. As long as the student doesn’t exceed yearly Stafford Loan borrowing limits, they may take out both subsidized and unsubsidized loans.

 Maximum Allowed Loan Amounts

Type of Student             Year of Study    Total Loan Eligibility    Max Subsidized 
                                                                                                          Loan Amount

Dependent Undergrad            1st                         $5,500                          $3,500

Dependent Undergrad            2nd                        $6,500                          $4,500

Dependent Undergrad           3rd +                      $7,500                          $5,500

Independent Undergrad          1st                         $9,500                          $3,500 
or Ineligible for PLUS Loan

Independent Undergrad         2nd                         $10,500                        $4,500
or Ineligible for PLUS Loan

Independent Undergrad         3rd +                      $12,500                        $5,500 
or Ineligible for PLUS Loan

Loan Eligibility

•  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
• Registered with Selective Service (if borrower is a male under age 25)
• Not currently in default. Must not owe a refund on any Title IV loan or gran

 Loan Costs

•  Interest rates are fixed at 3.4% on subsidized Stafford Loans used between July 1, 2013, and June 30, 2014.
• For loans first used between July 1, 2013 and June 30, 2014, up to 1.0% in fees will be added to a student’s loan profile.  

Loan Repayment Requirements

• After graduating, students will have a six-month grace period to begin payments.  In addition, six months after leaving school or dropping below half-time status, payments must be made.
• During the six-month 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, unless some special arrangements have been made.
• Under certain circumstances, such as health issues, a student may be eligible for loan deferment.

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