Federal Stafford Loans
The main type of federal loan for students is the Stafford loan. To borrow a Stafford loan, students must file the FAFSA. Stafford loans can be subsidized or unsubsidized. (The subsidized Stafford loan is a need-based loan.) The Financial Aid Office will determine whether a student qualifies for a subsidized or unsubsidized Stafford loan based on the student's FAFSA results, program of study, earned credit hours, and enrollment status.
Subsidized Stafford loans for undergraduate students that are disbursed after July 1, 2008, will have a fixed interest rate of 6.0%. The interest rate for unsubsidized Stafford loans and Stafford loans for graduate/professional students will remain fixed at 6.8%.
Stafford Loans with a first disbursement between July 1, 2006 and June 30, 2008 have a fixed interest rate of 6.8%. (Loans borrowed prior to July 1, 2006 have variable interest rates with a cap of 8.25%.) Interest rates are regulated by the federal government, however some lenders offer discounts upon repayment.
Repayment on Stafford loans begins six months after the student graduates or drops below half-time enrollment. The standard repayment term is 10 years, although alternative repayment terms (extended, graduated and income contingent repayment) are available.
An origination fee of up to three percent could be deducted from the loan amount. An origination fee is a fee that is paid to the federal government to help offset the cost of maintaining the program. Some lenders offer borrower benefits that may include paying a portion of the origination fee. For more information, view the list of lenders commonly selected by UDM students.
First-time borrowers must complete a master promissory note and an entrance interview.
Subsidized Stafford Loan
The federal government pays the interest on a subsidized Stafford loan while you are in school at least half-time, so the student is not charged interest and interest does not accrue while in school. After the student drops below half-time or leaves school, there is a one-time grace period of six months before repayment begins.
Unsubsidized Stafford Loan
Interest does accrue on an unsubsidized Stafford during in school periods. Students may choose to pay interest while in school in order to avoid "paying interest on interest" (capitalizing interest).
Stafford Maximums
|
|||
| Student Level & Dependency Status |
Grade Level Determined by Credit Hours Earned | Maximum Portion of the loan that may be Subsidized depending on need | Maximum Stafford (subsidized and unsubsidized) for the award year |
|---|---|---|---|
|
Dependent freshman Regular |
0 through 31 |
$3,500 |
$5,500 |
|
Independent freshman Regular |
0 through 31 |
$3,500 |
$9,500 |
|
Dependent sophomore Regular |
32 through 62 |
$4,500 |
$6,500 |
|
Independent sophomore Regular |
32 through 62 |
$4,500 |
$10,500 |
|
Dependent junior Regular |
63 through 94 |
$5,500 |
$7,500 |
|
Independent junior Regular |
63 through 94 |
$5,500 |
$12,500 |
|
Dependent senior Regular |
95 through 126 |
$5,500 |
$7,500 |
|
Independent senior Regular |
95 through 126 |
$5,500 |
$12,500 |
|
Teacher Certification - Post Degree |
Bachelors Degree |
$5,500 |
$11,500 |
|
Dependent Preparatory Coursework for a new undergraduate program |
Bachelors Degree |
$2,625 |
$2,625 |
|
Independent Preparatory Coursework for a new undergraduate program |
Bachelors Degree |
$2,625 |
$6,625 |
|
Preparatory Coursework for a new graduate program |
Bachelors Degree |
$5,500 |
$12,500 |
|
Graduate/professional |
$8,500 |
$20,500 |
|
|
Law |
$8,500 |
$20,500 |
|
|
Dental |
$8,500 |
$44,944 (11mo.) $40,500 (9 mo.) |
|
Please note, for undergraduate students, dependency is determined by the Department of Education when the student files the FAFSA. Graduate students are always independent.
Lifetime Stafford Loan Limits |
||
| Student Level & Dependency Status | Maximum Subsidized Portion | Maximum Stafford (subsidized and unsubsidized) |
|---|---|---|
|
Dependent undergraduate |
$23,000 |
$31,000 |
|
Independent undergraduate |
$23,000 |
$57,500 |
|
Graduate/Professional |
$65,500 |
$138,500 |
|
Dental |
$65,500 |
$224,000 |
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