Federal Stafford Loans

Overview

The federal Stafford loan is the most widely-used loan for college students and is available to both graduate and undergraduate students. There are two types of federal Stafford loans and your eligibility for both is determined using your financial aid application.

• Subsidized Stafford loans are interest-free while you are enrolled in college at least half-time and during a six-month grace period after you leave school.
• Unsubsidized Stafford loans accrue interest while you are enrolled. You can choose to pay the interest each month while in school, or allow the interest to accumulate.
  

Borrowing limits for each academic year depend on your class level:

• $5,500 Freshmen (maximum $3,500 may be subsidized)
• $6,500 Sophomores (maximum $4,500 may be subsidized)
• $7,500 Juniors/Seniors (maximum $5,500 may be subsidized)
• $20,500 Graduate Students (maximum $8,500 may be subsidized)

Interest rates for the 2008-2009 academic year

Subsidized Stafford:

• 0% interest rate while enrolled in college at least half-time level, and during a six month grace period after you leave school.
• 6.0% interest rate during repayment for Undergraduates
• 6.8% interest rate during repayment for Graduate students

Unsubsidized Stafford loans have a 6.8% fixed interest rate.

Loan fees of up to a 1% origination fee and a 1% default fee may be deducted from each disbursement of your loan.

No credit check required. If you are not in default on a prior educational loan, do not owe a repayment of federal grant funds, and meet federal aid eligibility requirements, you will be approved to borrow the Stafford loan.

No payments required while in school. Repayment begins six months after you graduate or drop below half-time enrollment and lasts ten years. You can apply for deferment of your repayment while enrolled in a graduate or professional program or if you become unemployed.