Federal Stafford Loan Program
The Federal Stafford Loan Program allows you to borrow money with low interest for educational expenses. Effective July 1, 2010, all new federal student loans come directly from the U.S. Department of Education (ED). The financial aid office at the college you attend will assist you with the loan application process, if you decide to borrow.
There are two types of Federal Stafford Loans available: subsidized and unsubsidized. Eligibility for subsidized Federal Stafford Loans is based on financial need, and the federal government pays the interest on your behalf on loans while you are enrolled at least half time, during the six-month grace period and during authorized deferment periods. You are responsible for paying the interest during repayment. Eligibility for unsubsidized Federal Stafford Loans is not based on financial need, but you are responsible for paying interest at all times. You may pay this interest while in school, or you can allow it to accrue and it will be added to your principal balance to be paid off with the rest of your loan when you stop attending on at least a half-time basis.
Eligibility
To be eligible, you must:
- Be a U.S. citizen or an elibible non-citizen
- Have a high school diploma or GED certificate
- Attend college on at least a half-time basis (6 credits minimum), and be working toward an eligible degree or certificate
- Comply with federal Selective Service registration requirements
- Not be in default on any student loan, nor owe a refund on any state or federal grant. If you are in default, you may re-establish your eligibility (PDF)
- Maintain satisfactory academic progress as determined by your college
How to Apply
The application process for both subsidized and unsubsidized Federal Stafford Loans begins with completion of the Free Application for Federal Student Aid (fafsa.gov). Check with your college’s financial aid office to determine if any additional forms are needed. The financial aid administrator at your college determines your eligibility for both subsidized and unsubsidized loan funds.
Eligibility Formulas - Subsidized Stafford Loan
Cost of attendance |
- |
(MINUS) expected family contribution (determined by completing your FAFSA) |
- |
|
= |
(EQUALS) Subsidized Federal Stafford Loan eligibility (not to exceed the program loan limit maximums) |
Eligibility Formulas - Unsubsidized Stafford Loan
If you have limited or no subsidized Federal Stafford Loan eligibility, the financial aid administrator can determine if you are eligible for an unsubsidized Federal Stafford Loan.
Cost of attendance |
- |
(MINUS) Other financial aid you’re expected to receive (including a subsidized Federal Stafford Loan) |
= |
(EQUALS) Unsubsidized Federal Stafford Loan eligibility (not to exceed the program loan limit maximums) |
Federal Stafford Loan Limits
Maximum annual limits for undergraduate and graduate students are monitored by the college based on federal regulations. Below are the loan limits for loans disbursed on or after July 1, 2008. Aggregate limits include Federal Direct Loans and loans made through the Federal Family Education Loan Program.
Annual Limits |
Subsidized |
Total (Subsidized & Unsubsidized) |
Dependent Undergraduates |
First Year |
$3,500 |
$5,500 |
Second Year |
$4,500 |
$6,500 |
Independent Undergraduates |
First Year |
$3,500 |
$9,500 |
Second Year |
$4,500 |
$10,500 |
Aggregate Limits |
Subsidized |
Total (Subsidized & Unsubsidized) |
Dependent Undergraduates |
$23,000 |
$31,000 |
Independent Undergraduates |
$23,000 |
$57,500 |
Fees and Disbursements
Currently, a federally mandated loan fee of 1.068 percent is charged on loan proceeds prior to disbursement.
Loans are disbursed in two installments. The 1st disbursement is no earlier than the 14th day of the semester. If you are a first-time, freshman borrower, the first disbursement is no earlier than the 31st day of the semester. The 2nd disbursement is not available until the mid-point of the loan period. Once the Financial Aid Office has disbursed loan funds to the student’s account, the Bursar’s Office usually issues a refund (as applicable) within 7 to 10 business days. Additional time may be required during peak processing periods.
There may be a significant delay in the receipt of your loan refund if your loan has not been processed, you have not completed the required online steps (Entrance Counseling and Master Promissory Note), or you are not enrolled/attending at least half-time (6 credits) on the disbursement date.
Undisbursed Stafford Loan funds may be cancelled if you drop below half-time status (6 credits).
Repayment Provisions
You must start repaying on your subsidized Stafford loan six months after graduation, or after you drop below half-time enrollment. If you are responsible for paying the interest that accrues during that six-month grace period, the interest will be added to the principal amount of your loan when the grace period ends. If you have an unsubsidized Stafford loan, you will be responsible for paying the interest on your loan from the day it is disbursed (there are options for paying the interest). Like a subsidized loan, repayment of principal on an unsubsidized loan begins six months after graduation or after you drop below half-time enrollment.
Most student loan payments are set up on a standard repayment plan with monthly payments that remain the same throughout the repayment period. However, there are other plans available that may make your payments more manageable.
Helpful Websites
To view your life-time student loan history, go to the National Student Loan Data System by clicking here (https://www.nslds.ed.gov/nslds/nslds_SA/). Your student loan debt and contact information of the assigned servicer of your loans is available at this website.
Another website that is invaluable to Stafford and PLUS Loan holders is https://studentloans.gov/. It is a one-stop shop. Check it out!
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