Summary of Stafford Loan Terms
Financing That is Right for You
Borrowing money in order to pay for your college education is complicated. There are many lenders from which to choose, and many lenders now offer special discounts and repayment incentive programs to encourage you to use their student loan products. We want to help you in your decision process. Here is information on the standard terms of the Federal Stafford Loan program, and tips on evaluating the special benefits offered by lenders.
The following is a summary of the standard terms of the Federal Stafford Loan program. For a complete statement of all terms and conditions of your loan, please see the Master Promissory Note (MPN), including the Borrower's Rights and Responsibilities sections.
Federal Stafford Loan Terms (Subsidized and Unsubsidized Loans)
| Default Fee | Up to 1%, deducted from each loan disbursement |
| Origination Fee | Up to 1%, deducted from each loan disbursement |
| Interest Rate | 6.0% nominal annual interest, fixed rate on subsidized loans disbursed after July 1, 2008 6.8% nominal annual interest, fixed rate on unsubsidized loans |
| Length of Repayment Period | Up to 10 years (may be extended to 25 years based on total amount borrowed) |
| Undergraduate Award Year Borrowing Limits | 1st Year student (dependent) $5,500; (independent) $9,500 of which the first $3,500 may be subsidized 2nd Year student (dependent) $6,500; (independent) $10,500 of which the first $4,500 may be subsidized 3rd-5th Year student (dependent) $7,500; (independent) $12,500, of which the first $5,500 may be subsidized. |
| Teacher Licensure Award Year Borrowing Limits | For students who have already received a baccalaureate degree and are enrolled in a teacher licensure program: dependent students $5,500; independent students $12,500 of which the first $5,500 may be subsidized. |
| Graduate Student Award Year Borrowing Limits | For students admitted to a program leading to a Master's degree, Doctorate or eligible graduate certificate: $20,500; of which the first $8,500 may be subsidized. |
| Aggregate Borrowing Limits | For a dependent undergraduate student: $31,000, of which $23,000 may be subsidized For an independent undergraduate student and teacher licensure students: $57,500, of which $23,000 may be subsidized. For graduate students: $138,000 |
| Minimum Enrollment Requirements | For undergraduate students: 6 undergraduate credit hours per semester (course numbers < 500) For graduate students: 4 graduate-level credit hours per semester (course numbers > 500) |
| Minimum Monthly Payment | $50.00 |
| Grace Period | Begins immediately following the borrower's last day of enrollment on an at least half-time basis and continues for 180 days. May be reinstated if the borrower re-enrolls on an at least half-time basis prior to the end of the grace period. No payments of loan principal and interest are required during the grace period. |
| Deferment Options | Payments of principal and interest are not required while the borrower is enrolled at least half-time and for special situations, such as qualifying periods of unemployment, economic hardship or active duty military service. |
| Interest Subsidy | Applies only to the portion of the loan designated as "Subsidized" or "SSL." The U.S. Government pays the lender on your behalf all interest charges that accrue on your loan principal amount while you are enrolled at least half-time and during your grace period. In addition, the government will pay all accruing interest on your Subsidized Stafford loan during qualifying periods of loan deferment. |
| Consequences of Default | Applies to loans in active repayment status for which the borrower fails to make payments for 270 consecutive days. Borrowers in default lose eligibility for any future Federal financial aid and all deferment options; repayment of the entire loan balance becomes due immediately; collection costs of 25% or more may be added to the outstanding loan balance; and the U.S. government can withhold tax refunds and/or garnish wages in order to secure repayment of the loan. |