Subsidized Stafford Loan for Graduates
- Fixed interest rate - 3.86%
- No payments while in school at least half-time
The subsidized Federal Stafford Loan is no longer available to graduate students. As of July 1, 2012, graduate students are only eligible for the unsubsidized stafford loan. The following information is for historical purposes and still applies to undergraduate stafford loans.
Subsidized Stafford Loans are awarded on the basis of financial need, which is determined by the information you provide on the FAFSA (Free Application for Federal Student Aid). If you qualify for a subsidized Stafford Loan, the Department of Education will cover all interest charged during the period the student is enrolled at least half-time and for the six month grace period given to the borrower after graduation or separation (ceasing to be enrolled at least half-time).
Further, while in repayment, if the borrower should need to take a deferment such as an unemployment deferment or because of a return to school (in-school deferment), the government would pay the interest during those periods as well.
Am I eligible for a subsidized Stafford Loan?
You must be enrolled at least half time in an eligible program of study.
How much can I borrow with this loan program?
If you are a graduate student, you can borrow up to
- $8,500 each academic year
The total aggregate debt you can have outstanding in subsidized Stafford loans is $65,000 (including subsidized Stafford loans received for undergraduate study). Check with your financial aid office for your eligibility.
How can I get this loan?
You first must complete the Free Application for Federal Student Aid (FAFSA) or Renewal FAFSA. After the FAFSA is processed your school will review the results and inform you about your loan eligibility. Next you must complete the Master Promissory Note (request the MPN), which is the promissory note for your loan. Your school may require that you complete their form, again - check with your financial aid office.
What is the interest rate of this loan?
The undergraduate Stafford loan interest rate is currently fixed at 3.86%.
Are there any special fees I will pay?
Stafford loans carry a 1.0% origination fee.
When will I get my money?
In most cases, your loan will be disbursed in two installments and sent directly to the school as determined by your financial aid office. Your loan money will be used to pay your tuition and fees. If loan money remains your school will credit your student account or pay you directly.
Can I cancel the loan?
Yes. Your school must notify you in writing whenever it credits your account with your loan proceeds. This notification must be sent to you no earlier than 30 days before, and no later than 30 days after, the school credits your account. You may cancel all or a portion of your loan if you inform your school that you wish to do so within 14 days after the date that your school sends you this notice, or by the first day of the payment period, whichever is later. Your school can tell you the first day of your payment period.
What are my repayment options?
The normal repayment for this loan is 10 years. You may be able to extend repayment by deferring or consolidating your loans. You may choose one of the following plans:
- The Standard Repayment Plan requires you to pay a fixed amount each month-- at least $50 or the interest that has accrued.
- The Graduated Repayment Plan sets your payments lower at first and then increases them over time. Each of your payments must equal the interest accrued on the loan between scheduled payments.
- The Income-Sensitive Repayment Plan bases your monthly payment on your yearly income and your loan amount. Payments may change as your income rises or falls.
- The Extended Repayment Plan is for borrowers with loans totaling more than $30,000. This plan offers a choice of fixed or graduated payments over a period of up to 25 years.