Stafford Loans
Undergraduate Level Stafford Loans
Federal Subsidized Stafford Loans are federally funded, low interest loans that are based on financial need. The repayment begins six months after the student ceases to be enrolled at least half time, and the government pays the interest on the loan while the student is enrolled at least half-time. Award amounts are based on cumulative credits earned toward a specific degree program. Annual borrowing limits for undergraduates are $3,500 for freshman (zero to 29 credits), $4,500 for sophomores (30-59 credits), and $5,500 for juniors and seniors 60-or more credits).
Federal Subsidized Stafford Loans are federally funded, low interest loans that are based on financial need. The repayment begins six months after the student ceases to be enrolled at least half time, and the government pays the interest on the loan while the student is enrolled at least half-time. Award amounts are based on cumulative credits earned toward a specific degree program. Annual borrowing limits for undergraduates are $3,500 for freshman (zero to 29 credits), $4,500 for sophomores (30-59 credits), and $5,500 for juniors and seniors 60-or more credits).
Federal Unsubsidized Stafford Loans are for students who do not qualify for Stafford loans. Independent undergraduates can borrow additional Unsubsidized Stafford loans up to $4,000 in their freshman and sophomore years and up to $5,000 in their junior and senior years.
The major differences between these two types of loans, is that when borrowing an unsubsidized Stafford loan the government will not pay the interest for the borrower, but both principal and interest may be deferred while the student is enrolled.
The current interest rate, established by the federal government, varies but will not exceed 8.25 percent.