What You Need To Know Before You Get A Stafford Loan

by David

college, loans, student loans and financial aid

There are many options available to students.

If you’re trying to decide which student loans to take out, one good option is the Stafford Loan — as long as you qualify.

The Stafford Loan is a federal loan. There are several requirements you must meet:

  • Must have financial need determined by your college
  • Must be a U.S. Citizen, permanent resident, or eligible non-citizen
  • 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 Student Loan Process

If you qualify for a Stafford Loan based on the above requirements, then 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’re not done yet. Before any of the funds are transferred to your school, you must go online and apply. Yes, you may think you’ve 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 for your records.


What Are The Borrowing Limits?


  • Freshmen – $5,500 (dependent student), $9,500 (independent student – max of $3,500 in subsidized loans)
  • Sophomores – $6,500 (dependent student), $10,500 (independent student – max of $4,500 in subsidized loans)
  • Juniors and Seniors – $7,500 (dependent student), $12,500 (independent student – max of $5,500 in subsidized loans)

MAX DEBT from Stafford Loans: $31,000 (dependent), $57,500 (independent – with max of $23,000 from subsidized loans)


  • 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. (Includes all Stafford loans received during undergraduate study.)


NOTE: The borrowing limits for Stafford Loans change each year.  And the interest rates on these federal loans are adjusted each year in the beginning of July. Check here forcurrent limits and interest rates.


Subsidized vs. Unsubsidized Loans

Subsidized loans are the preferred loans. They 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.

Overall, Stafford Loans are a great opportunity for those looking for student loans.

As always, do your research, but just know that these types of federal loans are available to cover all or part of your student loans.