Stafford Loans

The school that you choose dictates which of two Stafford Loan programs will help fund your educational costs. Some schools participate in the William D. Ford Federal Direct Loan Program and others participte in the Federal Family Education Loan Program (FFELP). The government acts as the lender for Direct Loans and a lending institution, such as your family bank or credit union, acts as the lender for the FFELP.

How Much Money Do Stafford Loans Offer?
If you re a dependent student, you can qualify for a Stafford Loan of up to $2,625 during your first year of school. That amount increases to $3,500 for your sophomore year, and if you choose to continue your education and pursue a four-year degree, you can earn up to $5,500 each year for the final two years. If you are an independent student, you can qualify for a larger loan amount, ranging from $6,625 to $18,500 depending on your year of study.

Remember, however, that the total amount of all of your Stafford Loans cannot exceed $23,000 during your undergraduate career (as a dependent student) or $138,500 during your entire academic career. Your interest rate is fixed at a competitive market rate at the time your loan is disbursed, and will never exceed 8.25%. Some lenders in the FFELP program may offer you discounted interest rates if you consistently make payments on time or if you participate in electronic payment plans.

Subsidized vs. Unsubsidized
The Federal government guarantees loans of up to $18,500 to help you cover the cost of your education. Stafford Loans have a fixed interest rate. If you meet your school's guidelines for financial need, you may qualify for a subsidized Stafford Loan. Interest does not accrue on a subsidized loan until after you leave school or drop below half-time enrollment.

Although you do not have to begin making loan repayments until six months after you leave school, if you have an unsubsidized Stafford loan, interest will begin accruing when the loan is disbursed.

If you qualify, you can combine a subsidized Stafford Loan with an unsubsidized Stafford Loan to cover your educational expenses.

Stafford Loan Amounts and Eligibility
You can qualify for a Stafford Loan with no credit check if you are enrolled in an eligible program at an accredited school and meet one of the following criteria:

• You are a United States citizen
• You are an eligible non-citizen

Simply complete the FAFSA--the same application that your school uses to determine your eligibility for other sources of college funding.