Stafford Student Loans

— Detail Information —

Two Types of Student Stafford Loans:

1. Subsidized student government loans are available to students who display a financial need as determined by the EFC (expected family contribution) formula:
   
   see Aid Step1: qualifying for financial aid
   
   Interest on the loan is paid by the federal government while you are in school and for up to six months (called the grace period) after you graduate or leave school.
   
   Loan amount limits will apply: see loan chart
   
   
2. Unsubsidized student government loans are available to any student regardless of family need or income level.
   
   Interest on the loan is to be paid by the student after loan funds are disbursed. You will be given the option of paying interest on the loan while in school or deferring interest payments while attending school until 6 months after graduation, withdrawal, or when you drop below half-time attendance status (deferred interest will be capitalized and added to the loan amount upon entering repayment period).
   
   Loan amount limits will apply:see loan chart
   
   
   

To qualify for federal student loans,

you must meet certain criteria: link to view student eligibility

Qualified loan amounts will differ depending on your dependency status: link to view student dependency status

Both subsidized and unsubsidized are fixed rate loans with an upper limit,

meaning that the rate will remain fixed for term of the loan. Fixed rates are applicable for all loans disbursed after July 01, 2006.

view current Stafford Loan rates: click here

view rate structure as set by the Federal Government (download docs): www.fp.ed.gov

You may be required to pay up to 4% processing fees to the lender upon loan disbursement.

Portion of these fees go the Federal Government and another portion to the guaranty agency to help reduce the cost of issuing the loans.

Generally these fees are deducted proportionately from each loan disbursement.

Borrowed funds will be paid directly to your school from the lender or federal government.

Your school will first use the money to pay your tuition and fees. Any remaining loan money is credited to your account or paid to you directly in at least two installments. No installment may exceed one-half of your loan amount.

Interest paid on student loans qualify a tax reduction

borrowers who file tax returns can deduct some of the interest paid on their student loans. Taxpayers who have taken out loans to pay for the cost of attending an accredited college for themselves, a spouse, or a dependent may be eligible for this deduction.

see IRS tax publication for more information:
tax benefits of higher education

The repayment period is 10 years under one of the following plans:

• Standard Repayment Plan:
  you pay a fixed amount per month
  
  
• Graduated Repayment Plan:
  you begin payments that are low (equal to the interest accrued) and then increase over time until full repayment
  
  
• Income-Sensitive Repayment Plan:
  the monthly payments change based upon annual income
  
  
• Extended Repayment Plan:
  allows new borrowers on or after 10/7/98 with a total FFELP debt of at least $30,000 (FDSLP loans offer other repayment terms) to repay their loan (either fixed or graduated) for up to 25 years.
  
  You can consolidate your loans with extended repayment terms if you qualify. See our affiliated student loan consolidation site

 

For more information:

steps in the application process: reviews the steps required when applying for federal financial aid.

link to the U.S. Department of Education to download the latest version of the Student Guide