Federal Stafford loans are fixed-rate student loans for undergraduate and graduate students attending college at least half-time. Stafford loans are the most common ways to pay for school. These are awarded to students based on their grade level and academic standing. The lender of Stafford loans is the U.S. Department of Education through the William D. Ford Federal Direct Loan Program. Students are required to sign a Master Promissory Note (MPN) and complete online Entrance Loan Counseling (ELC) before receiving a Stafford loan. Stafford Loans are subsidized or unsubsidized depending on your financial need.
Subsidized Stafford Loans are based on financial need and carry a 4.5 percent fixed interest rate (for undergraduate students) and a 6.8 percent fixed interest rate (for graduate students). Repayment of the loan is deferred for a period of six months.
Unsubsidized Stafford Loans are not based on financial need and carry a 6.8 percent fixed interest rate. Repayment of the loan is deferred for a period of 6-months. You may avoid paying the interest while they are in school by capitalizing the interest onto the principle. It is recommended that you pay the interest on the loan if you are in a position to do so.
If you accept your Stafford loan that is offered, you will need to complete the following steps to finalize the award:
- Locate your Federal Student Aid PIN (the same number you used to sign the FAFSA) or request a Duplicate Student Aid PIN
- Gather name and address information for two references that are not living at the same address
- For first time Stafford loan borrowers, complete Entrance loan counseling (ELC)
- Electronically sign the Direct Stafford Loan MPN with the Department of Education
Award amounts are based on cumulative credits earned toward a specific degree program. Annual borrowing limits for dependent undergraduates are $5,500 for freshman (zero to 29 credits), $6,500 for sophomores (30-59 credits), and $7,500 for juniors and seniors (60 or more credits).
Independent undergraduate students can borrow an additional Unsubsidized Stafford loan of $4,000 in their freshman and sophomore years and up to $5,000 in both their junior and senior years.
If you're a graduate or professional degree student, you can borrow up to $20,500 each year. No more than $8,500 of this amount may be in a subsidized loan.
When you graduate with a graduate or professional degree, the maximum total debt allowed from Stafford Loans is $138,500. No more than $65,500 of this amount may be in subsidized loans. This maximum total graduate debt limit includes Stafford Loans received for undergraduate study. These amounts are the maximum yearly amounts you can borrow in both subsidized and unsubsidized Stafford loans. The current interest rate, established by the federal government, varies but will not exceed 8.25 percent
After you graduate, drop to a less than half time status, or are no longer enrolled in a degree seeking program, repayment will begin after your six month deferment period ends. Deferment, forbearance, and multiple payment plan options may be available to you. Visit Direct Loan Repayment Plans to learn more.