What types of Stafford loans are available?
There are two types of Stafford Loans. Subsidized and unsubsidized. As a student loan borrower you may be eligible for one type or a combination of both subsidized and unsubsidized.
Effective July 1, 2012, graduate students are no longer eligible to receive subsidized Stafford loans.
What is a subsidized Stafford Loan?
A Federal Subsidized Student Loan is an educational loan provided by the federal government.
To be eligible for a Federal Subsidized Stafford Loan, you must complete the FAFSA.
The Federal Subsidized Student Loan is a need-based student loan program designed to assist students with educational expenses while attending at least half time in an eligible program of study.
You do not have to pay interest on a Federal Subsidized Stafford Loan while you are enrolled at least half time in school.
Please note that effective July 1, 2012, two important changes impact subsidized Federal Direct Stafford Loans:
Effective July 1, 2012, graduate students will no longer be eligible for these loans.
For subsidized loans borrowed after July 1, 2012, there will be no interest-free grace period after you stop attending school half time.
What is the difference between a subsidized and an unsubsidized loan?
Both subsidized and unsubsidized student loans are loans from the federal government for students pursing higher education.
If you receive a subsidized Direct student loan (sometimes referred to as a Direct Stafford Loan) you do not have to pay the interest while you are in school, during grace (for loans originated prior to July 1, 2012) or during approved deferment periods. During these periods, the government pays the interest for you on your subsidized loan.
Please note that subsidized loans originated after July 1, 2012 will no longer have an interest free grace period following graduation or dropping below half time status.
With an unsubsidized loan your interest will begin to accrue immediately upon disbursement of your loan. You have the option of making interest payments while you are in school or waiting until after your grace period. If you wait to pay your interest until after your grace period all accrued interest will be capitalized. This will increase the balance of your loan. If you have the extra money while in school, it is a good idea to make your interest payments.
What is the interest rate on a Federal Direct student Loan?
The interest rate on Federal Direct Subsidized and unsubsidized loans for undergraduate students with a loan period between July 1st, 2014 and June 30th, 2015 is 4.66%.
This is a fixed rate and will not change over the life of the loan.
The interest rate on Federal Direct Unsubsidized loans for graduate students with a loan period between July 1st, 2014 and June 30th, 2015 is 6.21%.
This is a fixed rate and will not change over the life of the loan.
If you have a previously borrowed Federal Direct Student loan or a Stafford student loan through the FFEL Program, and would like to check on the interest rate, servicer information, and other financial aid history, go to the National Student Loan Data System (NSLDS): www.nslds.ed.gov
What are my Stafford loan limits?
As a dependent undergraduate student you may be eligible for up to the following annual loan amounts depending on your FAFSA results and your financial aid package: *As a Freshman, you are eligible for up to $5,500. No more than $3,500 of this amount can be in subsidized loans. *As a Sophomore you are eligible for up to $6,500. No more than $4,500 of this amount can be in subsidized loans. *As a Junior and Senior you are eligible for up to $7,500 per academic year. No more than $5,500 of this amount can be in subsidized loans. As an independent undergraduate student or a dependent student whose parents have applied for but were unable to get a PLUS Loan (a parent loan), you are eligible for up to the following: *As a Freshman you are eligible for up to $9,500 with no more than $3,500 being a subsidized loan. *As a Sophomore you are eligible for up to $10,500 with no more than $4,500 being a subsidized loan *As a Junior and Senior you are eligible for up to $12,500 per academic year with no more than $5,500 being a subsidized loan. As a graduate or professional student you are eligible to borrow up to $20,500 per academic year under the unsubsidized Direct Stafford loan program. Aggregate Limits: There is an aggregate limit of Federal Direct Loan funds that students may borrow. These maximums would include funds borrowed at all colleges for all programs. If you have previously attended another institution and borrowed Federal funds, you should be aware of your current total amount borrowed and the federal maximums . Dependent students; $31,000 (up to $23,000 may be subsidized) Independent students and dependent students whose parents cannot borrow PLUS; $57,500 (up to $23,000 may be subsidized) Graduate students; $138,500 (up to $65,500 may be Subsidized) *Graduate students are no longer eligible for subsidized loans as of July 1, 2012) For more detailed information, please refer to the Federal information located at http://www2.ed.gov/offices/OSFAP/DirectLoan/index.html
Is a credit check required to receive a Federal Direct Subsidized or Unsubsidized Loan?
No. A credit check is not required to receive a Federal Direct Subsidized or Unsubsidized Loan.
What is a PLUS Loan?
The PLUS Loan is an educational loan provided by the Federal Government to parents of dependent students.
The PLUS Loan is designed to help students who have financial need to pay for educational expenses while attending college.
To be eligible for a PLUS Loan, parents must pass a credit check and must be either:
a U.S. citizen or national,
a U.S. permanent resident,
or eligible non-citizen.
In addition, students must be enrolled at least half-time in an eligible program of study.
The interest rate on a PLUS Loan is fixed at 7.21% for loans certified between July 1st, 2014 and June 30th, 2015.
The interest rate is set for new loans each July 1st, and is fixed for the life of the loan.
The maximum amount parents may borrow in a PLUS Loan is the difference between the Cost of Attendance and the amount their child receives in financial aid.
So, for example, if the Cost of Attendance is $8,000, and the student receives $4,000 in financial aid, the parent may borrow up to $4,000 in a PLUS Loan.
What is a Perkins Loan?
The Perkins Loan is an educational loan provided by the Federal Government.
To be considered for a Perkins Loan, you must complete the FAFSA.
The Perkins Loan is a need-based student loan designed to assist students with educational expenses who have exceptional financial need while attending college.
The interest rate on the Perkins Loan is 5%.
If you receive a Perkins Loan, you will be given a 9 month grace period after finishing school or dropping below half-time enrollment status.
Repayment on the Perkins Loan will begin after the grace period.
What is a Grad PLUS loan?
The PLUS Loan for Graduate and Professional Degree students, also known as the Grad PLUS Loan, is a federal loan available for you to borrower up to the cost of attendance minus any financial aid awarded.