Federal Stafford Loan
Stafford Loans come through the U.S. Department of Education and are funded by the U.S. Treasury. This ensures that the borrower will have a reliable and predictable source of funding.
There are two types of Stafford Loans: subsidized and unsubsidized.
- You must have financial need to receive a subsidized loan. The U.S. Department of Education will pay the interest that accrues on subsidized Stafford Loans during the period the student is enrolled at least half time.
- Financial need is not a requirement to receive an unsubsidized loan. The student borrower may pay interest quarterly on an unsubsidized loan.
Eligibility
- Must be an undergraduate, graduate, or professional student enrolled at least half time as a degree-seeking student.
- Must be a U.S. citizen, U.S. national or eligible non-citizen of the United States.
- Must not be in default on a Federal education loan or owe a repayment of Federal Title IV aid.
- Must meet Satisfactory Academic progress standards.
- Must not have reached Federal borrowing aggregate limits.
Details
- For Stafford Subsidized Loans disbursed between July 1, 2009 and June 30, 2010 the interest rate is fixed at 5.6% for undergraduates only. For graduate students and Stafford Unsubsidized Loan borrowers, the interest rate is fixed at 6.8%.
- Interest rates are subject to change July 1 of each year.
- An origination fee of .5% is assessed to all borrowers by the Direct Loan servicer.
Steps
- Must file the Free Application for Fedreal Student Aid (FAFSA) for the current year at www.fafsa.ed.gov. If eligible, Stafford loans will automatically be processed for students who have completed a FAFSA.
- May reduce or decline Stafford Loan amounts online prior to disbursement at OneStart.iu.edu in order to avoid borrowing their maximum eligibility.
- Must complete a Stafford Master Promissory Note (MPN) at www.dlenote.ed.gov if not already on file. Must also complete Entrance Counseling for funds to be disbursed.
- Must complete the FAFSA and clear any holds that they may have on their financial aid accounts well in advance of the end of the term to ensure adequate processing time. Federal Direct Stafford Loans cannot be processed after the final day of the term for which the student was enrolled
Repayment
Repayment does not begin until six months after students graduate or drop below halftime enrollment. At the time a student graduates or drops below halftime enrollment they will also need to complete Exit Counseling. For questions about payment plans, a complete listing of deferment options and Direct Loan repayment options, please contact the Direct Loan Servicer at1-800-848-0979 or online at https://www.dl.ed.gov. The information provided at Student Aid describes the new Income Based Repayment (IBR) Plan for federal student loans. It includes the IBR eligibility requirements, the benefits of IBR, an IBR payment calculator, and some examples of how a borrower's monthly student loan payment amount can be reduced under IBR. Students may monitor their loan borrowing online through the National Student Loan Database (NSLDS) at http://www.nslds.ed.gov.
Annual Federal Stafford Loan Aggregates
Dependent Base Amount* |
Dependent Additional Unsubsidized |
Independent Base Amount* |
Independent Additional Unsubsidized |
|
|---|---|---|---|---|
1st-year undergraduate |
$3,500 |
$2,000 |
$3,500 |
$6,000 |
2nd-year undergraduate |
$4,500 |
$2,000 |
$4,500 |
$6,000 |
3rd- and 4th-year undergraduate |
$5,500 |
$2,000 |
$5,500 |
$7,000 |
Graduate/ |
N/A |
N/A |
$8,500 |
$12,000 |
*Up to the base amount may be subsidized, if eligible.
Lifetime Federal Stafford Loan Aggregates
| Amount | |
|---|---|
| Dependent Undergraduate | $31,000 (no more than $23,000 subsidized) |
Independent Undergraduate |
$57,500 (no more than $23,000 subsidized) |
Graduate/Professional |
$138,500 (no more than $65,500 subsidized) |
