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The Stafford Loan often provides the lowest interest rate available to students, so start here. The nation’s most popular loan package, Stafford Loans are guaranteed by the government and don’t require a credit check, a co-signer, or collateral. There’s a six-month grace period before loan payments are due after graduation, and a minimum repayment of $50 a month.
| At a Glance |
| |
Stafford Subsidized |
Stafford Unsubsidized |
| Interest |
Fixed at 5.60% for undergraduate subsidized loans and 6.80% % for all other Stafford loans. Borrowers may receive a 0.25% interest rate reduction with automatic monthly payments. |
Fixed at 6.80%. Borrowers may receive a 0.25% interest rate reduction with automatic monthly payments. |
| Origination Fee |
0.50%
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0.50%
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| Guarantee Fee |
0%*
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0%*
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| Eligibility |
- At least half-time student
- U.S. Citizen or non-Citizen permanent resident
- Graduate students
- Undergraduate students
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- At least half-time student
- U.S. Citizen or non-Citizen permanent resident
- Graduate students
- Undergraduate students
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| Need Based |
Yes |
No |
| Funding Limit |
Yes |
Yes |
| Defer payment until graduation |
Yes |
Yes |
| Six-month grace period |
Yes |
Yes |
| Co-borrower required |
No |
No |
| Interest paid by government |
Yes, while in school and other eligible deferment periods |
No |
| Credit check required |
No |
No |
| Collateral required |
No |
No |
| FAFSA required |
Yes |
Yes |
| Minimum monthly payment |
$50 |
$50 |
| Loan term |
10 years |
10 years |
| Prepayment penalty |
No |
No |
* StuFund will utilize no-fee guarantors when possible. If this is not available, a guarantee fee of up to 1% will be assessed on your loan.
Types of loans
There are two types of Stafford Loans: subsidized, where the government pays the interest on the loan while in school and during the six-month grace period, and unsubsidized, where interest accrues during the time a student is in school. Subsidized loans are awarded to students based on demonstrated financial need as determined by the FAFSA form. Students can take out both types of loans at the same time.
Interest rates and terms
The interest rate is fixed at 5.60% for undergraduate subsidized loans and 6.80% for all other Stafford loans. StuFund will offer an interest rate reduction of 0.25% with automatic monthly payments.
The federal government pays interest on the subsidized loans while the student is in school. Borrowers can defer interest payments on the unsubsidized loan while in school by choosing to capitalize the interest (or adding the interest amount to the body of the loan). This makes for a larger loan, and larger payments due, at the time of repayment.
Limits
| ANNUAL LOAN LIMITS FOR SUBSIDIZED AND UNSUBSIDIZED STAFFORD LOANS |
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Dependent Undergraduate Students |
Independent Undergraduate Student |
Graduate/Professional Student |
| 1st Year |
$5,500 – No more than $3,500 of this amount may be in subsidized loans. |
$9,500 – No more than $3,500 of this
amount may be in subsidized loans. |
$20,500 – No more than $8,500 of this amount may be in subsidized loan. |
| 2nd Year |
$6,500 – No more than $4,500 of this amount may be in subsidized loans. |
$10,500 – No more than $4,500 of this
amount may be in subsidized loans. |
$20,500 – No more than $8,500 of this amount may be in subsidized loan. |
| 3rd and beyond (each year) |
$7,500 – No more than $5,500 of this amount may be in subsidized loans. |
$12,500 – No more than $5,500 of this
amount must be in subsidized loans. |
$20,500 – No more than $8,500 of this amount may be in subsidized loan. |
| Maximum Total Debt from Stafford Loans When You Graduate |
$31,000 – No more than $23,000 of this amount may be in subsidized loans. |
$57,000 – No more than $23,000 of this
amount may be in subsidized loans. |
$138,500 – No more than $65,500 of this amount may be in subsidized loans.
The graduate debt limit includes Stafford Loans received for undergraduate study. |
Repayment terms
Students can start paying while in school, or can defer payment until after graduation. There is a six-month grace period after graduation, after which students must pay a minimum of $50 a month. Students who take out Stafford Loans from more than one lender might be required to pay more than one minimum payment. The Stafford Loan is payable up to ten years.
Eligibility
-U.S. citizen or non-Citizen permanent resident
-Graduate or undergraduate student
-Enrolled in school at least half time
Steps
- Complete and send FAFSA form. This allows the federal government to approve you for loan amounts and for subsidized loans, if the government determines your financial need is large enough.
- Wait three to five weeks for loan award letter to arrive. The award letter will tell you how much funding is available for you.
- Complete Stafford Loan application, using the information on the award letter. Photocopy award letter and application for your files. Once approved for the loan, your Stafford Loan will be routed directly through your school.
- If your Stafford Loan amount does not meet your total educational funding needs, look at the PLUS loan and the Alternative loan.
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