The federal Stafford Loans program is the cornerstone of most student financial aid packages. Students using Stafford Loans can borrow a substantial amount of money regardless of their financial needs, whether for undergraduate or graduate programs.
Borrowing Limits for Stafford Loans
The limits on Stafford Loans depend on two factors: Are you dependent? What year are you in?
The maximum loan amounts are outlined in the table below:
Interest Rates and Fees
The Federal Student Aid website keeps current information on interest rates for federal student loans and updates it regularly. It’s important to check this information regularly as the rates charged will vary based on the type of loan and the type of borrower. In addition to the interest charged on a Stafford Loan, there are also loan fees. For loans disbursed for the first time after October 1, 2020, and before October 1, 2023, the loan fee is 1.057% of the total loan amount. This fee is deducted partially from each disbursement check.
Loan Repayment
Repayment of all Stafford Loans begins six months after the student graduates, withdraws, or drops below half-time enrollment. During this six-month grace period, no interest is added to the subsidized loan, but it accrues on the unsubsidized loan balances. Stafford Loans allow you to choose a repayment plan from the following options:
Application
Whether you are applying for a subsidized or unsubsidized Stafford Loan, you must complete the FAFSA form. Once you have completed the FAFSA form, it is sent to your school, which will inform you of your eligibility for the loan and your loan options. Upon accepting the loan, you must sign a promissory note before any funds are disbursed.
Frequently Asked Questions
What are Stafford Loans?
Stafford Loans are loans provided by the Department of Education for undergraduate and graduate students. They come in two types: subsidized and unsubsidized.
What is an unsubsidized Stafford Loan?
An unsubsidized Stafford Loan is a loan where the government does not pay your interest while you are in school or during your grace period or deferment. This is the opposite of subsidized loans, where the government pays the interest on the loan while you are in school or during your grace period or deferment.
Source: https://www.thebalancemoney.com/max-stafford-loan-795128
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