Federal Direct Stafford Loan Program
This program enables eligible undergraduate students to borrow up to $5,500 during the first year, $6,500 in the second year, and $7,500 in the third and fourth years. All students, regardless of family income, must submit a Free Application for Federal Student Aid (FAFSA) and, if required, documents to satisfy the requirements of federal verification, in order to be eligible for a Federal Direct Stafford Loan. Students are notified of their eligibility for this loan program on the financial aid award letter.
There are two different forms of this loan: the Federal Direct Subsidized Stafford Loan and the Federal Direct Unsubsidized Stafford Loan. Interest and repayment are deferred on the Federal Direct Subsidized Stafford Loan while the borrower attends college on at least a half-time basis.
Although repayment is also deferred on the Federal Direct Unsubsidized Stafford Loan while the borrower is enrolled at least half time, interest accrues on this loan from the time the loan funds are disbursed. The interest may be deferred and capitalized. Six months after the cessation of half-time enrollment, the borrower begins a 10-year repayment period (other repayment options are available) during which time interest is charged to the student. For the 2020-2021 academic year, the interest rate on the subsidized and unsubsidized versions of this loan will be a fixed rate of 2.75 percent. This loan carries a 1.059 percent origination fee.
The terms of the above loan programs are subject to federal legislation and may be changed.