Federal Stafford Loans

Direct Stafford Loans

 

The following chart shows the annual and aggregate limits for subsidized and unsubsidized loans.

Classification

(Year in College)

Dependent Students (except students whose parents are unable to obtain PLUS Loans)

Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)

First-Year Undergraduate Annual Loan Limit

$5,500—No more than $3,500 of this amount may be in subsidized loans.

$9,500—No more than $3,500 of this amount may be in subsidized loans.

Second-Year Undergraduate Annual Loan Limit

$6,500—No more than $4,500 of this amount may be in subsidized loans.

$10,500—No more than $4,500 of this amount may be in subsidized loans.

Third-Year and Beyond  Undergraduate Annual Loan Limit

$7,500—No more than $5,500 of this amount may be in subsidized loans.

$12,500—No more than $5,500 of this amount may be in subsidized loans.

Graduate or Professional Students Annual Loan Limit

Not Applicable (all graduate and professional students are considered independent)

$20,500 (unsubsidized only)

Subsidized and Unsubsidized Aggregate Loan Limit

$31,000—No more than $23,000 of this amount may be in subsidized loans.

$57,500 for undergraduates—No more than $23,000 of this amount may be in subsidized loans.

$138,500 for graduate or professional students—No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.

 

NOTE: The total of a Federal Direct Subsidized Loan award and a Federal Direct Unsubsidized Stafford Loan award may not exceed the above annual award limits.

Federal Direct Subsidized Loan Programs

This need-based loan program is available to students who are enrolled for at least half-time (6 hours for undergraduates and Post Baccalaureate students) each semester at the time of disbursing of funds and have a gross need.

The U.S. Department of Education will deduct an origination fee of up to 3% and up to 1 % default fee of the principal amount of the loan from each disbursement received by a student. These fees are used to offset the costs of default claims and special allowances.

A first year, first time Federal Direct Loan borrower cannot receive a Federal Direct Loan disbursement(s) until 30 days after the first day of class.

Loans of this type are repaid over a period of 10 years, excluding periods of deferment and/or forbearance.

For Federal Subsidized Loans, the interest does not accrue while the student is enrolled at least half time (6 hours). Repayment of principal and interest commences 6 months after the day on which the student ceases to be enrolled at least half-time (6 hours).

 

Federal Direct Unsubsidized Stafford Loan Program

This loan program is available to all students, regardless of family income, who are enrolled at least half-time (6 hours for undergraduates and Post Baccalaureate students and 5 hours for Graduate Students) credit hours each semester at the time of awarding and disbursing of funds. Students borrow from the U.S. Department of Education and loan limits are the same as for the Federal Direct Stafford Loan Program.

The U. S. Department of Education will deduct an origination fee of up to 3% and up to 1% default fee of the principal amount of the loan from each disbursement received by a student. These fees are used to offset the cost of default claims and special allowances.

A first year, first time Federal Direct Loan borrower cannot receive a Federal Direct Loan disbursement(s) until 30 days after the first day of class.

Loans of this type are repaid over a period of 10 years, excluding periods of deferment and/or forbearance.

Students must pay interest during in-school, grace and deferments. These interest payments may be made monthly, quarterly, or be added to the principal amount of the loan (i.e. Capitalized). Repayment of principal commences 6 months after the month in which the student ceases to be enrolled at least half-time. The interest rate is fixed at 6.8% effective July 1, 2006.

 

***** Direct Student Loan Changes *****

Federal Direct Subsidized Loans

Direct Subsidized loans will not be eligible for an interest subsidy during the six-month grace period.  Subsidized loans are loans for which the borrower is not responsible for the interest while the student is enrolled in college on at least a half-time basis when the loan is in the six-month grace period after the student is no longer enrolled at least half time, or if the loan is in a deferment status. This provision eliminates the interest subsidy provided during the six-month grace period for subsidized loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014. If you receive a subsidized loan during this timeframe, you will be responsible for the interest that accrues while your loan is in the grace period. You do not have to make payments during the grace period (unless you choose to) but the interest will be added (capitalized) to the principal amount of your loan when the grace period ends. This provision does not eliminate the interest subsidy while the borrower is in school or during eligible periods of deferment.

All subsidized loans made to undergraduate students will have a fixed interest rate of 6.8%. Subsidized loans for which the first disbursement is on or after July 1, 2012, will have a 6.8% fixed interest rate. Note: In the President's FY2013 budget request, the Administration has proposed maintaining the interest rate on subsidized loans at the current rate of 3.4% for the 2012-2013 school year.

Effective for loans made for payment periods that begin on or after July 1, 2012, Graduate and Professional students are no longer eligible to receive subsidized loans. However, if you are a graduate or professional student, you may still qualify for up to $20,500 in unsubsidized loans each year.

The U.S. Department of Education can no longer offer borrowers repayment incentives.  Effective for loans first disbursed on or after July 1, 2012, the Department of Education is prohibited from offering any repayment incentives to Federal Direct Loan borrowers, except interest rate reductions to borrowers who agree to have payments automatically electronically debited from their bank account.

 

Benefits of Direct Lending

The Federal Direct Loan Program offers numerous borrower benefits including:

  • There is a .25% interest rate reduction for automatically debiting your payment from your checking account.
  • Repayment options include Standard, Extended, Graduated, Income Contingent, Income-Based, Income-Sensitive, and Pay as you Earn Plan.

 

This website uses cookies to ensure site visitors get the best experience on our website. By continuing to use this site, you accept our use of cookies and Privacy Statement. To find out more, please visit Southern University's Privacy Statement.

I agree