Stafford Loan Summary
stafford student loan notes
Government guaranteed fixed rate student loan that covers all or part of your education-related expenses as certified by the institution.
Available for both undergraduate and graduate level programs.
- Loan Types:
both subsidized and unsubsidized loans - Loan Amounts:
varies by student grade level: see side tab Loan Amounts - Interest on the Loan:
eligible loan amounts may be subsidized or unsubsidized (depending on the financial need of the student) - Interest Rates:
fixed for the life of the student loan - No Restrictions:
no credit check or co-borrower required - Loan Processing:
processed and funded through the college - Loan Eligibility:
loan eligibility requirements include HS diploma, approved DOE certified school, and other eligibility requirements - Loan Repayment Terms:
repayment begins 180 days after graduation or separation from school
Next Topic: Pros-ConsPro and Cons of Stafford Loans
stafford student loan notes
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Advantages (Pros):
- No Credit Checks
since the funds are guaranteed by the federal government, your credit report is not used in qualifying you for the loan
- Low Interest:
federal student loans are fixed rate loans that remain fixed for the entire term of the loan; current rates are lower than most other financing options - Flexible Repayment Plans:
student loan payments do not have to be repaid until 180 days after you leave or graduate from school. The federal government offers flexible repayment plans that can fit your budget. You can even consolidate your federal loans into one, low repayment plan.
Disadvantages (Cons):
- Low Amount Limits:
the biggest disadvantage of stafford loans is the limited loan amounts — only $5,500 for first-year students. Very small amounts considering the cost of education
- Requires Federal Filings:
you must file the FAFSA form with the federal government in order to apply for stafford loans. The FAFSA filing is used by colleges to determine your financial aid award - Multiple Borrowings:
you have to file and apply for a loan each academic year.
Stafford Loan Amounts
stafford student loan notes
| Annual Loan Limits | ||
| Dependent Undergraduate (are you a dependent student? see our note below) (1) |
Eligible Subsidized Amount | Total Limit (2) (Subsidized & Unsubsidized) |
| First Year | $3,500 annual limit subsidized |
$5,500 annual limit (subsidized & unsubsidized) |
| Second Year | $4,500 annual limit subsidized |
$6,500 annual limit (subsidized & unsubsidized) |
| Third Year and Beyond | $5,500 annual limit subsidized |
$7,500 annual limit (subsidized & unsubsidized) |
| Independent Undergraduate (and dependents whose parents are unable to borrow under the PLUS program) (1) |
Eligible Subsidized Amount | Total Limit (Subsidized & Unsubsidized) |
| First Year | $3,500 annual limit subsidized |
$9,500 annual limit (subsidized & unsubsidized) |
| Second Year | $4,500 annual limit subsidized |
$10,500 annual limit (subsidized & unsubsidized) |
| Third Year and Beyond | $5,500 annual limit subsidized |
$12,500 annual limit (subsidized & unsubsidized) |
| Graduate/Professional Students | Eligible Subsidized Amount | Total Limit (Unsubsidized) |
| For Each Academic Year | - - | $20,500 annual limit (unsubsidized) |
| Aggregate Loan Limits | ||
| Dependent Undergraduate | $23,000 a ggregate limit (previously subsidized) |
$31,000 aggregate limit (subsidized & unsubsidized) |
| Independent Undergraduate (and dependents whose parents are unable to borrow under the PLUS program) |
$23,000 aggregate limit (previously subsidized) |
$57,500 aggregate limit (subsidized & unsubsidized) |
| Graduate/Professional Students (graduate debt limit includes Stafford loans received for undergraduate study) |
$65,500 aggregate limit (previously subsidized) |
$138,500 aggregate limit (subsidized & unsubsidized) |
| Health Care Professionals (graduate debt limit includes Stafford loans received for undergraduate study) |
$65,500 aggregate limit (previously subsidized) |
$224,000 aggregate limit (subsidized & unsubsidized) |
(1) Your school Financial Aid Office will determine your dependent or independent status. General guidelines state that students who are "independent" from their parents or guardians for basic living expenses will be eligible for Independent loan limits. Students who are "dependent" upon their parents or guardians for basic living expenses will be eligible for Dependent loan limits. Students who display at least one of the following requirements are classified as independent students:
independent students must report only income and assets of their own (and those of their spouse, if married) (2) The borrower may receive up to the entire amount in unsubsidized Stafford loans if the borrower does not qualify for a subsidized Stafford loan. The total amount received from Stafford and Unsubsidized Stafford loans cannot exceed the indicated annual limits. Federal regulations, terms, and rates are subject to change. |
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Stafford Loan Rates
stafford student loan notes
| Loan Disbursement Rates | |
Undergraduate Only For both Subsidized and Unsubsidized loans. Fixed rate loans. Rate will not change for the life of the loan. Rate in effect from after:
07/01/2025 |
6.39% |
Graduate and Professionals Fixed rate loans. Rate will not change for the life of the loan. Rate in effect from after:
07/01/2025 |
7.94% |
| Loan Fees | |
| On or after Oct. 1, 2020 and before Oct. 1, 2025 | 1.057% |
| On or after Oct. 1, 2019 and before Oct. 1, 2020 | 1.059% |
Loan Information
stafford student loan notes
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There are two types of Stafford Student Loans
- Subsidized Student Government Loans
are available to students who display a financial need as determined by the EFC (expected family contribution) formula:
see Step1: qualifying for financial aid
Interest on subsidized federal student loans is paid by the federal government while you are in school and for up to six months (called the grace period) after you graduate or leave school.
Student Loan amount limits will apply:
see loan amounts - Unsubsidized Student Government Loans
are available to any student regardless of family need or income level.
Interest on unsubsidized federal student loans to be paid by the student after loan funds are disbursed. You will be given the option of paying interest on the loan while in school or deferring interest payments while attending school until 6 months after graduation, withdrawal, or when you drop below half-time attendance status (deferred interest will be capitalized and added to the loan amount upon entering repayment period).
Student Loan amount limits will apply:
see loan chart for amounts
More Information About Stafford Loans
Both subsidized and unsubsidized are fixed rate student loans with an upper limit
Meaning that the rate will remain fixed for term of the loan. Fixed rates are applicable for all loans disbursed after July 01, 2006.
You may be required to pay processing fees to the lender upon student loan disbursement
Portion of these fees go the Federal Government and another portion to the guaranty agency to help reduce the cost of issuing the loans.
Generally these fees are deducted proportionately from each loan disbursement.
Borrowed funds will be paid directly to your school from the federal government
Your school will first use the money to pay your tuition and fees. Any remaining loan money is credited to your account or paid to you directly.
You may cancel the loan within 14 days after you receive written notification that funds have been credited to your account. Contact your financial aid office for cancellation terms.
Interest paid on student loans qualify for a tax reduction
Borrowers who file tax returns can deduct some of the interest paid on their student loans. Taxpayers who have taken out loans to pay for the cost of attending an accredited college for themselves, a spouse, or a dependent may be eligible for this deduction.
see IRS tax publication for more information:
About Repayment Options
The standard repayment options are as follows:
Standard Repayment Plan:
- time to repay: 10 years (120 months)
- Your payments will be a fixed amount of at least $50 per month
- You'll pay less interest for your loan over time under this plan than you would under the other plans
Graduated Repayment Plan:
- time to repay: 10 years (120 months)
- you begin payments that are low (equal to the interest accrued) and then increase over time until full repayment
- perfect for graduates whose income will increase over time allowing for higher repayment amounts
- you will pay more interest than using the standard repayment plan
Extended Repayment Plan:
- time to repay: up to 25 years
- must have $30,000 or more in student loan debt (consolidated)
- your payments will be at the amount that ensures your your loan will be paid in full in 25 years.
- you can choose the standard or graduated plans.
Income-Sensitive Repayment Plan:
- the monthly payments change based upon annual income.
- many plans have up to 20 years to replay
- download the student aid booklet for more information about these income sensitive plans.
Who Qualifies
stafford student loan notes
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Different eligibility loan amounts will be awarded for dependent and independent students
- students who have access to parental support are classified as dependent students
- dependent students and their parents must report respectively their income and assets on the FAFSA form
Students who display at least one of the following requirements are classified as independent students:
- you were at least 24 years of age on January 1 of the academic year you begin school
- you are married
- you are enrolled in a graduate or professional program (beyond the bachelor's degree)
- you have legal dependents other than a spouse
- you are an orphan or ward of the court (or were a ward of the court until age 18)
- you are veteran of the U.S. Armed Forces ("veteran" includes a student who attended a U.S. military academy who was released under a condition other than dishonorable)
Independent students must report only income and assets of their own (and those of their spouse, if married)
How to Qualify for Stafford Student Loans
To qualify for federal student loans, you must meet the following criteria:
- display a need for financial aid (except for unsubsidized Stafford and PLUS loans).
- complete high school and have been awarded a high school diploma or a General Education Development (GED) Certificate.
- pass a college entrance exam approved by the U.S. Department of Education, and/or meet other standards your state may establish.
- be enrolled or accepted for enrollment as a regular student working at least half-time toward a degree or certificate in an eligible program.
- be a U.S. citizen or eligible non-citizen.
- have a valid Social Security number, link to obtain SSN:
ssa.gov/online/ss-5.html - make satisfactory academic progress.
- sign a statement on the Free Application for Federal Student Aid (FAFSA) certifying that you will use federal student aid only for educational purposes
- sign a statement on the FAFSA certifying that you are not in default on a federal student loan and that you do not owe money back on a federal student grant.
- register with the Selective Service (for young men age 18 and over). You can register online:
sss.gov
Apply Stafford Loans
stafford loan application
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All Stafford loan applications must be processed through your college
- or you can apply directly through the direct student loan program
Return: Aid Options
