Subsidized or Unsubsidized: determined by the FAFSA.
Subsidized Stafford Loan: need-based; the government pays the interest while the student is in school.
Unsubsidized Stafford Loan: student is responsible for the interest while in school; interest can be paid quarterly or capitalized and added to the loan principal until after the borrower ceases to be enrolled at least half time.
Maximum Loan Amounts:
Dependent Undergraduates: up to $5,500 for freshmen, $6,500 for sophomores and $7,500 for juniors and seniors; lifetime limit $31,000.
Independent Undergraduates: up to $9,500 for freshmen, $10,500 for sophomores and $12,500 for juniors and seniors.
Interest Rate; lifetime limit $57,500.
7/1/13 & beyond
As of July 1, 2006, Stafford Loan interest rates are fixed
Prior to July 1, 2006 Stafford Loans have variable interest rates, capped at 8.25%; with rate adjustment on July 1 every year
Loan Fees: reduce loan proceeds by 1% to determine amount that will credit to your account (i.e. if loan is $5,500, amount credited is $5,445).
Repayment: begins six months after the student ceases to be enrolled at least half time; several repayment options available; the standard plan provides up to 10 years for repayment. Further information regarding repayment options, loan deferment and loan forgiveness programs is available at www.studentloans.gov.
FEDERAL PERKINS LOAN
Interest Rate: 5%; interest-free while the student is enrolled at least half time.
Repayment: begins nine months after the students ceases to be enrolled half time; minimum of $50/month; maximum repayment period is 10 years. Additional information regarding repayment, deferment and cancellation options is available at www.studentaid.ed.gov.
FEDERAL DIRECT PARENT PLUS LOAN
(For parents of Dependent Undergraduate students only)
Loan Amount: up to the cost of education minus any other financial aid.
Interest Rate: fixed interest rate of 7.9% on the Federal Direct Parent PLUS Loan. (Loans borrowed for academic terms prior to July 1, 2006 have variable interest rates, capped at 9%; with rate adjustment on July 1 every year.)
Loan Fees: reduce loan proceeds by 4% to determine amount that will credit to student's account (i.e. if loan is $10,000, amount credited is $9,600).
Approval: a credit check is completed by the federal government when PLUS Request is completed by parent at www.studentloans.gov. Parent will see credit decision immediately. If credit is denied, student will be awarded an additional Unsubsidized Stafford loan of $4,000/year if a freshman or sophomore and $5,000/year if a junior or senior.
Repayment: begins 60 days after the loan is fully disbursed. However, please note that payments on Federal Parent PLUS Loans disbursed July 1, 2008 or after, may be deferred upon request to the loan servicer while the student is enrolled at least half time. Interest will accrue and may be paid or added to the principal when the child is no longer enrolled.