The Federal Stafford Loan
The Stafford Loan often provides the lowest interest rate
available to students, so start here. The nation's most popular loan
package, Stafford Loans are guaranteed by the government and don't
require a credit check, a co-signer, or collateral. There's a
six-month grace period before loan payments are due after
graduation, and a minimum repayment of $50 a month.
At a Glance:
| |
Stafford Subsidized |
Stafford Unsubsidized |
| Interest |
Fixed at 5.60% for undergraduate subsidized loans
and 6.80% % for all other Stafford loans. Borrowers may receive a 0.25% interest rate reduction with automatic monthly payments. |
Fixed at 6.80%. Borrowers may receive a 0.25% interest rate reduction with automatic monthly payments. |
| Origination Fee |
0.50% |
0.50% |
| Guarantee Fee |
0%* |
0%* |
| Eligibility |
At least half-time student
U.S. Citizen or non-Citizen permanent resident
Graduate students
Undergraduate students |
At least half-time student
U.S. Citizen or non-Citizen permanent resident
Graduate students
Undergraduate students |
| Need Based |
Yes |
No |
| Funding Limit |
Yes |
Yes |
| Defer payment until graduation |
Yes |
Yes |
| Six-month grace period |
Yes |
Yes |
| Co-borrower required |
No |
No |
| Interest paid by government |
Yes, while in school and other eligible
deferment periods |
No |
| Credit check required |
No |
No |
| Collateral required |
No |
No |
| FAFSA required |
Yes |
Yes |
| Minimum monthly payment |
$50 |
$50 |
| Loan term |
10 years |
10 years |
| Prepayment penalty |
No |
No |
* StuFund will utilize no-fee guarantors when possible.
If this is not available, a guarantee fee of up to 1% will be assessed on your loan.
Types of loans
There are two types of Stafford Loans: subsidized, where the
government pays the interest on the loan while in school and during
the six-month grace period, and unsubsidized, where interest accrues
during the time a student is in school. Subsidized loans are awarded
to students based on demonstrated financial need as determined by
the FAFSA form. Students can take out both types of loans at the
same time.
Interest rates and terms
The interest rate is fixed at 6.00% for undergraduate subsidized
loans and 6.80% for all other Stafford loans. StuFund will
offer an interest rate reduction of 0.25% with automatic monthly
payments.
The federal government pays interest on the subsidized loans
while the student is in school. Borrowers can defer interest
payments on the unsubsidized loan while in school by choosing to
capitalize the interest (or adding the interest amount to the body
of the loan). This makes for a larger loan, and larger payments due,
at the time of repayment.
Limits
ANNUAL LOAN LIMITS FOR SUBSIDIZED AND UNSUBSIDIZED STAFFORD
LOANS
| |
Dependent Undergraduate Students |
Independent Undergraduate
Student |
Graduate/Professional
Student |
| 1st Year |
$5,500 - No
more than $3,500 of this amount may be in subsidized loans. |
$9,500 - No
more than $3,500 of this
amount may be in subsidized loans. |
$20,500 No more than $8,500 of this amount may be in
subsidized loan. |
| 2nd Year |
$6,500 - No
more than $4,500 of this amount may be in subsidized loans. |
$10,500 No more
than $4,500 of this
amount may be in subsidized loans. |
| 3rd and beyond (each year) |
$7,500 - No
more than $5,500 of this amount may be in subsidized loans. |
$12,500 No more
than $5,500 of this
amount must be in subsidized loans. |
| Maximum Total Debt from
Stafford Loans When You Graduate |
$31,000 - No more than $23,000
of this amount may be in subsidized loans. |
$57,000 No more than $23,000
of this
amount may be in subsidized loans. |
$138,500 – No more than $65,500
of this amount may be in subsidized loans.
The graduate debt limit includes Stafford
Loans received for undergraduate study.
|
Repayment terms
Students can start paying while in school, or can defer payment
until after graduation. There is a six-month grace period after
graduation, after which students must pay a minimum of $50 a month.
Students who take out Stafford Loans from more than one lender might
be required to pay more than one minimum payment. The Stafford Loan
is payable up to ten years.
Eligibility
-- U.S. citizen or non-Citizen permanent resident
-- Graduate or undergraduate student
-- Enrolled in school at least half time
Steps
-
Complete and send FAFSA form. This allows the federal
government to approve you for loan amounts and for subsidized
loans, if the government determines your financial need is large
enough.
- Wait three to five weeks for loan award letter to
arrive. The award letter will tell you how much funding is
available for you.
- Complete Stafford Loan application, using the
information on the award letter. Photocopy award letter and
application for your files. Once approved for the loan, your
Stafford Loan will be routed directly through your school.
- If your Stafford Loan amount does not meet your
total educational funding needs, look at the
PLUS loan and the
Alternative loan.
|
