Money & Finances

The Stafford loan has several requirements one must meet including:

• Must have financial need determined by your college


• Must be a U.S. Citizen, permanent resident, or eligible non-citizenf


• Must be enrolled at least half-time


• Must not have defaulted on other educational loans


• Must complete and submit the FAFSA form available on most student loan sites

The Process
If you qualify for the loan based on the above requirements, you will receive a Student Aid Report (SAR) after you submit your FASFA form. This will also be sent to your college.

A couple of weeks later (hopefully) your college should send you a letter indicating how much of a loan is available for you. You may then choose the amount (up to the available amount) that you would like as a loan and notify your school.

Once that is complete, you have been awarded the loan, but you are not done yet. Before any of the funds are transferred to your school, you must go online and apply. Yes, you think you may have already done this, but this is a federal loan and the process is a long one.

Online you will sign an electronic promissory note and complete any outstanding paperwork. Be sure to print the promissory note and ANY other paperwork.

What are the borrowing limits??
Undergraduate (2006-2007)
Freshmen - $3,500 (dependent student), $7,500 (independent student - max of $3,500 in subsidized loans)
Sophomores - $4,500 (dependent student), $7,500 (independent student - max of $4,500 in subsidized loans)
Juniors and Seniors - $5,500 (dependent student), $10,500 (independent student - max of $5,500 in subsidized loans)
MAX DEBT from Stafford Loans: $23,000 (dependent), $46,000 (independent - with max of $23,000 from subsidized loans)

Graduate (2006-2007)
All years - $20,500 with no more than $8,500 in subsidized loans
MAX DEBT from Stafford Loans: $138,500 with no more than $65,500 in subsidized debt.

The max debt for graduate students includes ALL Stafford loans received during undergraduate study.

What are the Interest Rates?
The interest rates on these federal loans are adjusted each year in the beginning of July. The current interest rate for the 2007-2008 school year for loans disbursed prior to July 1, 2006 is 6.62%. For loans disbursed after July 1, the rate is 6.8%.

Finally, for loans in the repayment period that are not consolidated, the interest rate increases slightly to 7.22%.

Subsidized vs. Unsubsidized - what does this mean??
Subsidized Loans are the preferred loans. Subsidized loans are awarded based on the financial need of the student. With this type of loan, you will not be charged interest until you begin repayment. In effect, the government is paying the interest for you.

Unsubsidized Loans are not awarded based on need; they are available to all eligible students. However, with this type of loan, you are charged interest from the day the loan is disbursed.

Stafford federal loans are a great opportunity for those looking for student loans. As always, do your research, but these types of loans are available to cover all or part of your student loans.