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Subsidized and Unsubsidized Stafford Loans
What is the difference between subsidized and unsubsidized loans?
Stafford Loan Limits
Federal PLUS Loan
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Subsidized and Unsubsidized Stafford Loans
A Stafford Loan is a low-interest, long-term loan with special benefits for students. Stafford Loans are the largest source of financial aid funds.
- Interest rates vary by the type of loan and the date of disbursement. The interest rate for all graduate and unsubsidized Stafford loans first disbursed on or after July 1, 2008 is a fixed rate of 6.8%. The interest rates for undergraduate subsidized Stafford loans are fixed at lower rates based upon the date of first disbursement. For more specific information on interest rates click here to refer to the interest rates chart.
- The Standard Repayment plan is 10 years, but there are some repayment plans that may give you more time depending upon the amount you borrow.
- The minimum scheduled payment will be $50 per month and begin after a six-month grace period. Your grace period begins after you graduate (or drop below half-time attendance). Monthly repayments will vary depending on amount borrowed
You must be enrolled at least half-time in an eligible academic program to take out a Stafford Loan. You must also complete the Free Application for Federal Student Aid (FAFSA). Students with financial need, based upon the expected family contribution (EFC) and cost of attendance, may qualify for both subsidized and unsubsidized Stafford Loans. The amount of other financial aid, including scholarships, grants, and other resources can affect how much you qualify for. Students that do not have financial need, may qualify for unsubsidized Stafford Loans.
In addition to the FAFSA, a master promissory note (MPN) must be signed stating you promise to repay your loan(s). Read the entire promissory note before you sign it; this is a legal document. You must also complete an entrance counseling session, which explains the loan terms and conditions. Your MPN and entrance counseling must be completed before the loan funds will be disbursed to pay your school charges. Your school may also request additional information in order to receive your loan funds. See you school's website or financial aid material for specific information.
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What is the difference between subsidized and unsubsidized loans?
Subsidized Stafford Loan - The federal government will pay the interest while you are in school, during your grace period, and during authorized periods when payments can be suspended, called deferments.
Unsubsidized Stafford Loan - the federal government does NOT pay your interest. The interest is always your responsibility to pay. If you do not pay the interest while you are in school, your grace period, or during deferments, the interest on your loan will capitalize and be added to your principal balance.
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Stafford Loan Limits
Federal Stafford Loans for Undergraduate Dependent Students
(Whose Parents Have Not Been Denied a PLUS Loan)
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| Grade Level |
Base
Amounts* |
Additional Unsubsidized |
Total Amount |
| Freshman |
$3,500 |
$2,000 |
$5,500 |
| Sophomore |
$4,500 |
$2,000 |
$6,500 |
| Junior & Senior |
$5,500 |
$2,000 |
$7,500 |
| Preparatory coursework for enrollment in an undergraduate program |
$2,625 |
0 |
$2,625 |
| Preparatory coursework for enrollment in an graduate program |
$5,500 |
0 |
$5,500 |
| Teacher Certification coursework |
$5,500 |
0 |
$5,500 |
| Aggregates |
$23,000 |
$8,000 |
$31,000 |
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*Maximum amount that may be subsidized.
Federal Stafford Loans for Undergraduate Independent Students
(and Dependent Students Whose Parents Have Been Denied a PLUS Loan)
|
| Grade Level |
Base
Amounts* |
Additional Unsubsidized |
Total Amount |
| Freshman |
$3,500 |
$6,000 |
$9,500 |
| Sophomore |
$4,500 |
$6,000 |
$10,500 |
| Junior & Senior |
$5,500 |
$7,000 |
$12,500 |
| Preparatory coursework for enrollment in an undergraduate program |
$2,625 |
$6,000 |
$8,625 |
| Preparatory coursework for enrollment in an graduate program |
$5,500 |
$7,000 |
$12,500 |
| Teacher Certification coursework |
$5,500 |
$7,000 |
$12,500 |
| Aggregates |
$23,000 |
$34,500 |
$57,500 |
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*Maximum amount that may be subsidized.
Federal Stafford Loans for Graduate Students
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| Grade Level |
Base
Amounts* |
Additional
Unsubsidized** |
Total Amount |
| Each Year |
$8,500 |
$12,000 |
$20,500 |
| Aggregates |
$65,500 |
$73,000 |
$138,500** |
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*Maximum amount that may be subsidized.
** For certain health and medical professions
programs at the graduate level, students may
borrow more than these amounts.
A fee of up to 2% of the loan may be deducted from each loan disbursement. The federal government charges a 1% origination fee and a 1% default fee.
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Federal PLUS Loan
A Federal PLUS Loan is part of the Federal Family Education Loan Program (FFELP). It is designed to allow parents of undergraduate dependent students to borrow for their children's education and graduate students to borrow for their education. Income and assets are not a factor. However, eligibility for the PLUS Loan is based on the borrower’s credit history.
- The interest for a PLUS Loan is fixed at 8.5%.
- Borrowers normally have up to 10 years to repay the loan, but there are some repayment plans that may give more time depending upon the amount borrowed.
- Scheduled payments will not be lower than $50 per month.
- Repayment of a Federal Grad PLUS Loan begins within 60 days of the funds being fully disbursed. For parent PLUS loans first disbursed on or after July 1, 2008, a parent borrower has the option to begin repayment within 60 days after the loan is fully disbursed or to postpone repayment until six months after the student for whom the loan was borrowed ceases to be enrolled on at least a half-time basis. There are no pre-payment penalties for Federal PLUS Loans. Principal payments can be made on the Federal PLUS Loan at any time to reduce the balance of the loan.
- A fee of up to 4% of the loan may be deducted from each loan disbursement. The Federal Government charges a 3% origination fee and a 1% default fee. College Assist determines on an annual basis if the 1% Federal Default fee will be waived.
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