Federal Direct Stafford Loans are offered through the U.S. Department of Education's Federal Direct Loan Program and are funded by the U.S. Treasury. This ensures that the borrower will have a reliable and predictable source of funding.
There are two types of Stafford Loans: subsidized and unsubsidized. You must have financial need to receive a subsidized loan. Financial need is not a requirement to receive an unsubsidized loan. The U.S. Department of Education will pay the interest that accrues on subsidized Stafford Loans during the period the student is enrolled at least half time. The student borrower may pay interest quarterly on an unsubsidized loan.
Eligibility
A student borrower:
- Must be an undergraduate, graduate, or professional student enrolled at least half time as a degree-seeking student.
- Must be a U.S. citizen, U.S. national, or eligible non-citizen of the United States.
- Must not be in default on a federal education loan or owe a repayment of federal Title IV aid.
- Must meet Satisfactory Academic Progress standards.
- Must not have reached federal borrowing aggregate limits.
2011-2012 ACADEMIC YEAR
details
- Subsidized Stafford loans have a fixed interest rate of 3.4% for undergraduates only. The interest rate is fixed at 6.8% for graduate students.
- Unsubsidized Stafford loans have a fixed interest rate 6.8%
- Interest rates are subject to change July 1st of each year.
- An origination fee of 0.5% is assessed to all borrowers.
steps
Student borrowers:
- Must file the Free Application for Federal Student Aid (FAFSA) for the current year at www.fafsa.ed.gov. If eligible, Stafford loans will automatically be processed for students who have completed a FAFSA.
- Must clear any holds on financial aid account well in advance of the end of the term to ensure adequate processing time. Stafford loans cannot be processed after the end of a term.
- Must complete a Stafford Master Promissory Note (MPN) at https://studentloans.gov/ if not already on file.
- May reduce or decline Stafford Loan amounts online prior to disbursement through OneStart.iu.edu.
Repayment
Repayment begins six months after a student graduates or drops below half-time enrollment. For questions about payment plans and Direct Loan repayment options, please contact your servicer. Students may monitor their borrowing through the National Student Loan Database (NSLDS) at http://www.nslds.ed.gov. Students may also view their servicer, if unknown.
| Dependent Student | Independent Student | |||
|---|---|---|---|---|
| Base Amount* | Additional Unsubsidized | Base Amount* | Additional Unsubsidized | |
| Freshman | $3,500 |
$2,000 |
$3,500
| $6,000 |
| Sophomore | $4,500 |
$2,000 |
$4,500
| $6,000 |
| Junior and Senior | $5,500 |
$2,000 |
$5,500 |
$7,000 |
| Graduate/ professional |
N/A |
N/A |
$8,500 |
$12,000 |
| *Up to the base amount may be subsidized, if eligible. | ||||
| Amount | |
|---|---|
| Dependent Undergraduate | $31,000 (no more than $23,000 subsidized) |
| Independent Undergraduate | $57,500 (no more than $23,000 subsidized) |
| Graduate/Professional | $138,500 (no more than $65,500 subsidized) |
| Doctoral Optometry | $224,000 (no more than $65,500 subsidized) |
