Federal Direct Stafford Loans are offered through the U.S. Department of Education's Federal Direct Loan Program and are funded by the U.S. Treasury. This lending arrangement ensures that student borrowers will have a reliable and predictable source of funding for their education.
There are two types of Stafford Loans: subsidized and unsubsidized. Undergraduates must have financial need to receive a subsidized loan - graduate students do not qualify for subsidized loans beginning July 1st, 2012. Financial need is not a requirement however, to receive an unsubsidized loan. The U.S. Department of Education will pay the interest that accrues on subsidized Stafford Loans during the period the student is enrolled at least half time. The student borrower may pay interest quarterly on an unsubsidized loan.
Eligibility
A student borrower:
- Must be an undergraduate, graduate, or professional student enrolled at least half time as a degree-seeking student.
- Must be a U.S. citizen, U.S. national, or eligible non-citizen of the United States.
- Must not be in default on a federal education loan or owe a repayment of federal Title IV aid.
- Must meet Satisfactory Academic Progress standards.
- Must not have reached federal borrowing aggregate limits.
2012-2013 ACADEMIC YEAR
Details
- Subsidized Stafford loans have a fixed interest rate of 6.8% for undergraduates. Subsidized Federal Stafford loans are not available to graduate students as of July 1st, 2012.
- Unsubsidized Stafford loans have a fixed interest rate 6.8% (undergraduates and graduates alike).
- Interest rates are subject to change July 1st of each year.
- An origination fee of 1.0% is assessed to all borrowers.
Steps
Student borrowers:
- Must file the Free Application for Federal Student Aid (FAFSA) for the current year at www.fafsa.ed.gov. If eligible, Stafford loans will automatically be processed for students who have completed a FAFSA.
- Must clear any holds on financial aid account well in advance of the end of the term to ensure adequate processing time. Stafford loans cannot be processed after the end of a term.
- Must complete a Stafford Master Promissory Note (MPN) at https://studentloans.gov/ if not already on file.
- May reduce or decline Stafford Loan amounts online prior to disbursement through OneStart.iu.edu.
Repayment
Repayment begins six months after a student graduates or drops below half-time enrollment. The resources listed below may be helpful as you begin thinking about repayment.
- Find helpful information about student loan repayment through the Department of Education
- Access your borrowing history on the National Student Loan Data System (NSLDS)
- Explore loan repayment plans and calculators
- Understand the risks of Defaulting on your student loan repayment
| Dependent Student | Independent Student | |||
|---|---|---|---|---|
| Base Amount* | Additional Unsubsidized | Base Amount* | Additional Unsubsidized | |
| Freshman | $3,500 |
$2,000 |
$3,500*
| $6,000 |
| Sophomore | $4,500 |
$2,000 |
$4,500*
| $6,000 |
| Junior and Senior | $5,500 |
$2,000 |
$5,500* |
$7,000 |
| Graduate/ professional |
N/A |
N/A |
$20,500 |
N/A |
| *Up to the base amount may be subsidized, if eligible. | ||||
| Amount | |
|---|---|
| Dependent Undergraduate | $31,000 (no more than $23,000 subsidized) |
| Independent Undergraduate | $57,500 (no more than $23,000 subsidized) |
| Graduate/Professional | $138,500 (no more than $65,500 subsidized) |
| Doctoral Optometry | $224,000 (no more than $65,500 subsidized) |
