Federal Stafford Loan Program  

 Federal Stafford Loans   

Stafford loans are the most common form of "self-help' aid and are for eligible undergraduate, graduate, vocational and professional students. The largest single source of federal aid is the Federal Family Education Loan (FFEL) Program, administered jointly by the U.S. Department of Education and your state's student loan guaranty agency.  

 FFEL Program loans, like other educational loans that are part of federal or state government programs, are made at favorable rates, and the qualifying standards are generally less stringent than for private loans. The interest rate varies each year, but can't go higher than 8.25% and interest rates are adjusted each July. Borrowers are notified of interest rate changes throughout the life of your loan. Origination and insurance fees of up to 4% may be deducted proportionally from each disbursement.  

Subsidized and Unsubsidized 

There are two types of Stafford loans: subsidized, where the federal government pays the interest while you're in school, and during grace and deferment; and unsubsidized, where you're responsible for paying all the interest on the loan. A subsidized loan and an unsubsidized loan can be awarded and received for the same enrollment period.  

 Interest Rate 

Subsidized Federal Stafford Loans are based on need. Unsubsidized Stafford Loans are not based on need. The interest rate for a Stafford loan cannot exceed 8.25%.  

How much can be borrowed

 How much you can borrow largely depends on your college costs, your expected family contribution, your year in school and your enrollment status, and how much other financial aid you may receive. Dependent undergraduate students can borrow up to:  

•  $2,625 for a first-year student enrolled in a program of study that is at least a full academic year.   

•  $3,500 if you have completed the first year of study and the remainder of your program is at least a full academic year.   

• $5,500 a year if you have completed two years of study and the remainder of your program is at least a full academic year.   

Independent undergraduate students or dependent students whose parents are unable to get a PLUS Loan, can borrow up to   

•  $6,625 for a first-year student enrolled in a program of study that is at least a full academic year (only $2,625 of this amount may be in subsidized loans).   

•  $7,500 if you have completed the first year of study and the remainder of your program is at least a full academic year (only $3,500 of this amount may be in subsidized loans). 

•   $10,500 a year if you have completed two years of study and the remainder of the program is at least a full academic year (only $5,500 of this amount may be in subsidized loans).  

 Independent students may be awarded eligible for additional unsubsidized Stafford loans to replace some of their expected family contribution. Freshmen and sophomores may receive up to $4,000 more in unsubsidized Stafford loans; juniors and seniors may receive up to $5,000 more; and graduate students up to $10,000 more.   

For periods of study that are less than an academic year, the amounts that can be borrowed will be less than those listed above.  

 Graduate students, can generally borrow up to $18,500 each academic year.

 The total debt from all outstanding Stafford Loans combined is:   

•  $23,000 as a dependent undergraduate student (only $8,500 of this amount may be in subsidized Stafford loans).   

• 46,000 as an independent undergraduate student (only $23,000 of this amount may be in subsidized loans).   

• $138,500 as a graduate or professional student (only $65,500 of this amount may be in subsidized loans). The graduate debt limit includes any Stafford Loans received for undergraduate study. 

 Independent student refers to individuals at least 24 year old, orphans, state wards, U.S. Armed Forces veterans or married; or those with a legal dependent other than a spouse.  

 The Stafford loan, plus any other financial aid you've received, cannot be more than your college costs.    

Check “ü” with your financial aid administrator to find out how much you can borrow.   

Never borrow more than you need!   

Applying for the Stafford Loan

 The first step in applying for a Stafford Loan is completing the Free Application for Federal Student Aid (FAFSA) or Renewal FAFSA. After your FAFSA is processed, your school will review the results and will inform you of your loan eligibility. You must then complete the promissory note provided by your school or the Direct Loan Servicing Center. For more information on the FAFSA go to the Education Resource Center's section on Getting Started – Understanding and Completing the FAFSA.   

Stafford Program Eligibility 

To qualify for FFEL Program loans: 

• You must be a U.S. citizen, national, permanent resident, or eligible non-citizen

• You must have a high school diploma or a General Educational Development (GED) certificate.   

•  You must be making satisfactory academic progress.   

• You-or your parent in the case of a PLUS loan-must be a U.S. citizen or an eligible non-citizen (have a permanent resident visa and be able to provide an alien registration identification number).   

• You must have a Social Security number (SSN).   

• You must be a student working toward a degree or certificate at an eligible school at least half time.   

•  You must be registered with the Selective Service, if required.   

Depending on the type of loan for which you're applying, you must demonstrate financial need or creditworthiness.