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Why was my graduate Stafford loan less than I expected?
- Fixed interest rate - 6.8% or lower
- No payments while in school at least half-time
Lenders are allowed to retain a percentage of the amount you borrow in "default fees " and/or "origination fees". Default fees are used by the lender in creating a reserve to protect the loan program in instances when borrowers default on their loans. Origination fees are a processing fee retained by lenders.
The Department of Education determines the maximum percentage for default and origination fees for Federal Stafford, PLUS and Direct loans. The maximum origination fee in these programs is 3%, the maximum guarantee fee is 1%. Lenders and guarantee agencies are not required to charge this fee, and some have recently have developed 0% guarantee fee programs.
For private graduate student loan programs, there is generally no maximum fee rate. Fees for private loans can range from 0% to 10% or more depending on the credit worthiness of the borrower and risk associated with the loan.
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Other Graduate Stafford loan questions
- What is the Graduate Stafford Loan interest rate?
- What can I use a Graduate Stafford Loan for?
- What are the deadlines for Graduate Stafford Loans?
- Why was my graduate Stafford loan less than I expected?
- Are there penalties for early payment, or if the loan is paid in full before scheduled payments begin?
- Do I have to apply for a graduate Stafford loan every year or does it renew?
- When will I receive my graduate Stafford loan?
- Can I use Graduate Stafford loans for online degrees?
- Can I get a Stafford Loan if I have bad credit?
