Federal Stafford Loans are low cost loans available to help cover the cost of education. These loans, guaranteed by the federal government, do not require repayment until six months after graduation, or an enrollment change to less than half time status. This federal loan program includes subsidized and unsubsidized Stafford loans. The subsidized Stafford loan is a need-based loan. Need is determined from the information you provide on your Free Application for Federal Student Aid (FAFSA) form. The government will pay the interest on the subsidized Stafford loan while you are in school, during the six-month grace period and during any deferment period.

If you do not qualify for the subsidized Stafford loan, you may be eligible for the unsubsidized Stafford loan. With this loan, you will be responsible for the interest that accrues while in school and during the grace and deferment periods. Payments on Stafford loans are not required during the in-school, grace or deferment periods. Any accrued interest on the unsubsidized Stafford loan will be added to your principal balance when you enter repayment.

Eligibility

You may apply for the Federal Stafford Loan if you are enrolled at least half time in a college or university and are not in default on any previous student loan.

Master Promissory Note

The Federal Stafford Loan is made available using a Master Promissory Note developed by the federal government. This means while you are in school, you may only need to sign one promissory note if you stay with the same lender and continue to be enrolled at least half time. At the start of each academic year, you will still need to request additional funds through your school. Check with your school’s Financial Aid Office.

Loan Amounts

The Federal Government sets the maximum loan amounts that you may borrow, depending on your academic year. The Financial Aid Office will determine the amount you are eligible to receive in accordance with federal guidelines.

• First year undergraduate students may borrow up to $3,500. Second year students may borrow up to $4,500. Third and fourth year undergraduates may borrow up to $5,500.
• Independent students may borrow an additional unsubsidized Stafford loan up to $4,000 during their first and second years, and an additional $5,000 during the third and fourth and years.
• Chiropractic graduate students may borrow additional amounts in Unsubsidized Stafford Loan.

The Department of Education sets the interest rates. Federal Stafford Loans disbursed after July 1, 2006, have a fixed rate of 6.8%. Loans disbursed prior to this date have a variable rate that changes every July 1st.

Subsidized Stafford Loan Interest

The federal government will pay the interest that accrues on this need-based loan during the in-school, grace and authorized deferment periods. At repayment, interest becomes part of your repayment amount.

Unsubsidized Stafford Loan Interest

Interest accrues on this non need-based loan at disbursement. Interest accrued during the in-school and grace periods will be added to the principal balance (capitalized) when you enter repayment.

Origination Fee

The Department of Education assesses an origination fee prior to disbursement.

Repayment Period

The standard repayment period is ten years to repay Federal Stafford Loans. Borrowers whose first Stafford loans were disbursed after October 7, 1998, and whose indebtedness is over $30,000 in Stafford loans, are eligible to receive an extended repayment period of up to 25 years.