Types of Financial Aid: Stafford Loans

Federal Stafford Subsidized/Unsubsidized Direct Loan Program


What's the difference in a subsidized and unsubsidized loan?

A subsidized loan is awarded on the basis of financial need.  Interest will not be charged on this loan while the student is enrolled in school or during authorized periods of deferment.  The federal government "subsidizes" the interest during these periods.

An unsubsidized loan is not awarded on the basis of need.  Interest is charged from the time the loan is disbursed until it is paid in full.  Interest that accrues (accumulates) while the student is in school or during other periods of nonpayment will be capitalized - that is, the interest will be added to the principal amount of the loan and additional interest will be based on that higher amount.


How do I get a Stafford loan?

A regular student enrolled in an eligible program at least half-time may receive a Stafford loan.  Complete the FAFSA as you would for other federal student aid.

Once a Stafford loan has been awarded the student should complete an online Master Promissory Note (MPN) and Entrance Loan Counseling.  The MPN is a binding legal document.  By signing it you are agreeing to repay your loan under the terms specified.  Both the MPN and Entrance Counseling should can be completed at www.studentloans.gov.


How much can I borrow?

Combined Subsidized & Unsubsidized Annual Loan Limits

Dependent students

Independent students
Freshman (<30 hrs) $5,500 Freshman (<30 hrs) $9,500
Sophomore (30-59 hrs) $6,500 Sophomore (30-59 hrs) $10,500
Junior/Senior (60+ hrs) $7,500 Junior/Senior (60+ hrs) $12,500


Why is the amount on my bill not the same as the amount awarded?

Stafford loans are subject to origination fees.  Origination fees are charged by the lender.  These fees may range from 1% to 3%.  For example, if you borrow $3,500 ($1,750 per semester), the lender may hold out $105 in origination fees for the year ($52.50 per semester).  $1,697.50 per semester would be applied to the bill instead of the award amount of $1750.  You are required to repay the full award amount.