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Federal Stafford Loans
Stafford Loans are low-cost education loans insured by the federal government made to students. These loans are available to undergraduate and graduate students who are enrolled at least half-time at an eligible institution. Loan funds must be used for school budgeted costs such as tuition, fees, books, supplies, room and board, and miscellaneous expenses.
There are two types of Federal Stafford Loans, subsidized (based on financial need) and unsubsidized (not based on financial need).
Eligibility Criteria:
The student must:
- be a U.S. citizen or an eligible non-citizen,
- have completed and filed a Free Application for Federal Student Aid (FAFSA),
- be enrolled at least half-time at a federally accredited school,
- not be in default on any student loan,
- maintain satisfactory academic progress,
- comply with selective service registration,
- not owe a refund on any federal student grant, and
- not be incarcerated.
Loan Limits, Fees and Other Information:
| Dependent Undergraduate Loan Limits | |||
|---|---|---|---|
| Base Stafford2 | Additional Unsubsidized Stafford | Total Stafford (Subsidized and Unsubsidized) | |
| First Year | $3,500 | $2,000 | $5,500 |
| Second Year | $4,500 | $2,000 | $6,500 |
| Third Year and Beyond | $5,500 | $2,000 | $7,500 |
| Independent Undergraduate Loan Limits (and a Dependent Undergraduate whose parent is unable to borrow a PLUS Loan) |
|||
| First Year | $3,500 | $6,000 | $9,500 |
| Second Year | $4,500 | $6,000 | $10,500 |
| Third Year and Beyond | $5,500 | $7,000 | $12,500 |
| Graduate Loan Limits | |||
| Graduate Students | $8,500 | $12,000 | $20,500 |
| Aggregate Loan Limits | |||
| Maximum Subsidized Stafford | Additional Unsubsidized Stafford | Total Stafford (Subsidized and Unsubsidized) | |
| Dependent Undergraduates | $23,000 | $8,000 | $31,000 |
| Independent Undergraduates | $23,000 | $34,500 | $57,500 |
| Graduate Students | $65,500 | $73,000 | $138,500 |
| Loan Terms | |||
| Subsidized Stafford | Unsubsidized Stafford | ||
| Interest Rate - Undergraduate | 5.6% Fixed7 | 6.8% Fixed | |
| Interest Rate - Graduate | 6.8% Fixed | 6.8% Fixed | |
| Federal Default Fee3 | 0% - 1% | 0% - 1% | |
| Origination Fee | .5%7 | .5%7 | |
| Credit Checks | NO | NO | |
| Must Show Financial Need | YES | NO | |
| Grace Period4 | 6 months after graduation or enrollment is less than half time | 6 months after graduation or enrollment is less than half time | |
| Repayment Term | 10 Years | 10 Years | |
| In-School Payments Deferred | |||
| Principal | YES | YES | |
| Interest | N/A5 | YES6 | |
| Interest Capitalization | N/A5 | At Repayment | |
- Students must be attending at least half-time.
- If the borrower does not have financial need for a subsidized Stafford Loan, or has reached the aggregate limit in subsidized Stafford Loans, the borrower may receive up to this entire amount in unsubsidized Stafford Loans, based on eligibility.
- The 1% Federal Default Fee may be paid for in full or in part by the guaranty agency.
- Stafford Loan repayment normally begins 6 months after the student graduates or ceases to be enrolled at least half time.
- The federal government pays the interest for subsidized Federal Stafford Loans while the student is enrolled at least half time.
- Deferred interest is accrued and will be added to principal at repayment. Applies only to unsubsidized borrowing.
- Applies to loans first disbursed from 7/1/2009 to 6/30/2010.
Repayment and Interest:
Stafford Loans must be repaid.
A "subsidized" Stafford Loan means that the federal government will pay all the interest on your loan until you begin repayment. Repayment will start six months after you graduate or cease to be enrolled at least half-time.
With an "unsubsidized" Stafford Loan, you are responsible for all the interest from the day the loan is disbursed. While the loan is in an in school, grace, deferment or forbearance status, you may pay the interest quarterly or add the accrued interest to the principal when repayment begins (capitalization).
Repayment of your Stafford Loan is initially set up as using a standard plan; you pay the same amount each month. National Education offers other payment plans to help fit your budget. A change in payment plan can reduce your initial payments by up to 40%.
Alternative payment plans, deferments and forbearance are available to help you manage the repayment of your Stafford Loan.
Tips to remember:
- The student is the borrower and is responsible for paying back the loan.
- Loans are expected to be repaid within ten years.
- No penalty for early repayment; you can pay more than the monthly amount if you wish.
- There is a 6 month grace period after graduation or when you are enrolled less than half time.
- Payments are not required while you are enrolled in school at least half time and during the grace period.
- Repayment begins after the 6 month grace period ends.
- The interest rate for Stafford Loans is:
- fixed at 5.6% for subsidized Stafford Loans made to undergraduates (loans with a first disbursement from 7/1/2009 to 6/30/2010)
- fixed at 6.8% for subsidized Stafford Loans made to graduates
- fixed at 6.8% for unsubsidized Stafford Loans made to undergraduates and graduates
We reserve the right to modify or discontinue benefit programs at any time without notice. Any termination or modification of the program will not affect the terms of loans previously made. Specific terms and conditions may apply, please call us if you have any questions.