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Stafford Loans are either subsidized or unsubsidized.
You can receive a subsidized loan and an unsubsidized loan for the
same enrollment period.
A subsidized Stafford Loan is awarded on the
basis of financial need. You won't be charged any interest while
you're in school or during authorized periods of deferment, as the
federal government "subsidizes" the interest during these periods.
An unsubsidized Stafford Loan is not awarded
on the basis of need. You'll be charged interest from the time the
loan is disbursed until it's paid in full. You can either pay the
interest as it becomes due, or you may opt to delay any payments
and allow the interest to accrue (accumulate) while you're in school
or during other periods of nonpayment. If you accrue (or "capitalize")
the interest, it will be added to the principal amount of your loan,
and additional interest will be based on that higher amount.
How Do I Apply For A Stafford Loan?
You apply for a Stafford Loan by using the FAFSA (Free Application
for Federal Student Aid) or Renewal FAFSA, just the way you would
for other types of federal student financial aid.
How much can I borrow?
Stafford Loan limits for dependent undergraduate students are as
follows:
- $2,625 if you're a first-year student enrolled
in a program of study that is at least a full academic year.
- $3,500 if you've completed your first year
of study and the remainder of your program is at least a full
academic year.
- $5,500 if you've completed two years of study
and the remainder of your program is at least a full academic
year.
Stafford Loan limits for independent undergraduate
students or dependent students whose parents are unable to get a
PLUS Loan are as follows:
- $6,625 if you're a first-year student enrolled
in a program of study that is at least a full academic year (only
$2,625 of this amount may be in subsidized loans).
- $7,500 if you've completed your first year
of study and the remainder of your program is at least a full
academic year (only $3,500 of this amount may be in subsidized
loans).
- $10,500 if you've completed two years of study
and the remainder of your program is at least a full academic
year (only $5,500 of this amount may be in subsidized loans).
For periods of study that are less than an academic
year, the amounts you can borrow will be less than those listed.
Check with your school's financial aid office to find out how much
you can borrow.
Graduate students can borrow up to $18,500
each academic year, although only $8,500 of that amount may be in
subsidized Stafford Loans.
In general, the total debt you can have outstanding
from all Stafford Loans combined is $23,000 as a dependent undergraduate
student, $46,000 as an independent undergraduate student (only $23,000
of this amount may be in subsidized Stafford Loans), and $138,500
as a graduate or professional student (only $65,500 of this amount
may be in subsidized Stafford Loans). The graduate debt limit includes
any Stafford Loans received for undergraduate study.
What's the interest rate on a Stafford Loan?
The interest rate is variable (might change each year) but does
not exceed 8.25 percent. Interest rates are adjusted each year on
July 1, and you'll be notified of interest rate changes throughout
the life of your loan. The current interest rate is 4.06%.
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Information On Stafford Loans …
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