Federal Direct Stafford Loan
Federal Direct Stafford Loans are available to U.S. citizens and permanent residents who are enrolled at least half-time in a degree program and who demonstrate need by filing the Free Application for Federal Student Aid. Loan capital is supplied directly by the federal government, which also serves as the guarantor.
There are two different forms of this loan: the Federal Direct Subsidized Stafford Loan and the Federal Direct Unsubsidized Stafford Loan.
Students may borrow up to $5,500 in their freshman year (with no more than $3,500 of this amount subsidized), $6,500 in their sophomore year (with no more than $4,500 of this amount subsidized), and $7,500 in each of their junior and senior years (with no more than $5,500 of this amount subsidized). The aggregate limit for undegraduate students is $31,000 with a maximum of $23,000 subsidized for dependent students, and $57,500 with a maximum of $23,000 subsidized for independent students.
Graduate students may borrow up to $20,500 in the unsubsidized version of this loan only. Dependent postbaccalaureate program students may borrow up to $5,500 for one consecutive 12-month period and independent postbaccalaureate students may borrow up to $12,500. Postbaccalaureate students are not eligible for federal loans beyond their first year of study. The maximum aggregate borrowing limit for the graduate students (including undergraduate borrowing) is $138,500, with no more than $65,500 in subsidized loan funds. The aggregate limit for postbaccalaureate students is $31,000 with a maximum of $23,000 subsidized for dependent students, and $57,500 with a maximum of $23,000 subsidized for independent students.
Borrowers of the Federal Direct Stafford Loan must complete the required promissory notes and entrance counseling online at the beginning of their entering semester upon receipt of correspondence from the Office of Student Financial Services. Anticipated credits on a student's account will be cancelled if all required steps are not completed.
Borrowers of the Federal Direct Stafford Loan do not have to pay the interest that accrues on this loan while they are in school; instead, the federal government forgives the interest on this portion of the loan. Borrowers of the Federal Direct Unsubsidized Stafford Loan are assessed interest on the loan from the time the loan funds are disbursed. Interest may be deferred and capitalized.
For the 23-24 academic year, the interest rate on the subsidized and unsubsidized versions of this loan for undergraduate students is a fixed rate of 5.49%. The interest rate on the unsubsidized version of this loan for graduate students is a fixed rate of 7.05%.
The government charges an origination fee of 1.057% on the total amount of the Stafford Loan. The loan proceeds will be disbursed directly to the student's account, less the fee, in equal amounts, one payment for each term in the loan period.
Repayment of a Stafford Loan begins six months after the borrower ceases to be enrolled at least half-time. The standard repayment period is 10 years. (Please go to https://studentaid.gov/ for information about alternate repayment plans.) Students are required to pay the interest on the unsubsidized Stafford Loan during the in-school period, or have it capitalized and added to the loan balance.
The terms for the above loan programs are subject to federal legislation, regulations and other guidance, and may change.