Types of Federal Loan Programs
Subsidized Stafford Loan
The Office of Financial Aid awards subsidized loans based on financial need. The maximum amount a student may borrow in any single year as a subsidized loan is equal to the cost of attendance minus the sum of all forms of financial aid already awarded minus the EFC, not to exceed the limits outlined below. The federal government does not charge interest while students are in school.
Unsubsidized Stafford Loan
The Office of Financial Aid does not award unsubsidized loans based on financial need. The federal government does not make interest payments for the borrower. The maximum a student may borrow in a single year is equal to the cost of attendance minus the sum of all forms of financial aid already awarded, not to exceed the limits outlined below. The federal government charges interest to the borrower from the time the loan funds are disbursed until the student pays it in full.
The amount students can borrow each year for subsidized and unsubsidized Stafford loans depends on their grade level and on whether they are dependent or independent students.
| Dependent student | Independent student1 | |
| 1st-year undergraduate | $3,500 / $2,000 | $3,500 / $6,000 |
| 2nd-year undergraduate | $4,500 / $2,000 | $4,500 / $6,000 |
| 3rd- and 4th-year undergraduate | $5,500 / $2,000 | $5,500 / $7,000 |
| Graduate/professional | NA | $8,500 / $12,000 |
| 1. This includes dependent students whose parents are unable to borrow a PLUS loan. 2. The first number is the base amount, which may be any combination of subsidized and unsubsidized loan funds. The second number is the amount of additional unsubsidized loan funds available. Prior to July 1, 2008, there was no additional amount for dependent students, while for independent undergraduate students the amount was $2,000 less than the above numbers (the amount for graduate students is unchanged). |
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The amount a student can borrow is also limited by the student's school costs, other financial aid the student may receive, and (in the case of subsidized loans) the student's expected family contribution.
These are the aggregate (total) limits for all subsidized and unsubsidized Stafford loans, whether solely from the Direct Loan Program or in combination with FFEL Stafford loans:
• $31,000 for a dependent undergraduate student (no more than $23,000 may be subsidized)
• $57,500 for an independent undergraduate student1 (no more than $23,000 may be subsidized)
• $138,500 for a graduate or professional student (no more than $65,000 may be subsidized; includes loans for undergraduate study)
With a PLUS loan, a graduate/professional student or the parent of a dependent student can borrow up to the cost of the student's education minus other financial aid the student receives.
The interest rate for loans disbursed between July 1, 1998, and June 30, 2006, will continue to be adjusted each year on July 1, though for Stafford loans it will never be higher than 8.25%. However, Stafford loans disbursed on or after July 1, 2006, have a fixed interest rate of 6.8%, with the exception that subsidized loans disbursed on or after July 1, 2008, to undergraduate students will have an interest rate of 6.00%. Direct PLUS Loans have a fixed rate of 7.9%.
In addition to interest, you pay a loan fee of 2% of the principal amount of each Direct Subsidized or Unsubsidized Stafford Loan that you borrow. The loan fee for PLUS loans is 4%. This fee helps reduce the cost of making these low-interest loans. We deduct the fee before you receive any loan money, so the loan amount you actually receive will be less than the amount you have to repay.
Federal Perkins Loan
The Office of Financial Aid awards Perkins loans based on financial need. Repayment begins nine months after a student graduates, withdraws, or drops below half time enrollment. Students can defer repayment for certain kinds of federal and volunteer service. Undergraduate students may borrow up to $5,500 per year for all levels. The cumulative maximum is $20,000. The interest rate is 5.0%, and begins with the first loan repayment. There is no processing fee on Perkins loans. For more detailed information go to www.studentaid.ed.gov
Veterans Administration Education Benefits
Various programs are available for veterans, reservists, and their dependents. Students can obtain information and applications from state veterans affairs offices. Students should consult the policies on transferring credits from other sources.
The Federal Department of Education provides a complete list of federal financial aid programs and policies.