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Federal Stafford Loan
Stafford loans are low-interest, federally guaranteed student loans. There are two types of Stafford loans: subsidized and unsubsidized.
Subsidized Stafford loans
are available to students who meet a financial needs test. The federal government pays the interest on a subsidized Stafford loan while the borrower is enrolled in school, during grace periods and/or during qualified deferment periods.
Unsubsidized Stafford loans are available to students regardless of family income. Students are charged interest on an unsubsidized Stafford loan from the time the loan is disbursed until it is paid in full. If the interest isn't paid as it accrues, it will be capitalized. This means the interest will be added to the principal amount of the loan, with additional interest based upon the higher amount.
Loan amounts on Stafford loans (subsidized and unsubsidized) are based on the borrower's year in school and whether he or she is considered dependent or independent:
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Annual Loan Limits for Dependent Students
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Subsidized Loan |
Total Amount Subsidized and Unsubsidized
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Freshman
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$3,500
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$5,500
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Sophomore
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$4,500
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$6,500
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Junior or senior
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$5,500
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$7,500
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Federal Stafford Unsubsidized Independent Student
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Subsidized Loan
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Total Amount Subsidized and Unsubsidized
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Freshman
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$3,500
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$9,500
($6,000 unsubsidized)
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Sophomore
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$4,500* |
$10,500
($6,000 unsubsidized)
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Junior or senior
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$5,500
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$12,500
($7,000 unsubsidized)
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| Graduate or professional |
$8,500
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$20,500
($12,000 unsubsidized)
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Undergraduate dependent lifetime limit
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$31,000
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Undergraduate independent lifetime limit
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$57,500
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Graduate or professional lifetime limit**
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$138,500
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*For loans disbursed on or after July 1, 2008.
**Exceptions may apply to certain graduate students.
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1. First submit the FAFSA.
2. Contact your financial aid office and tell them that you would like a Stafford Loan from Student Loan Funding, Lender ID 831455.
3. Typically your school will initiate the application and give you instructions on how to complete the process. |
For loans disbursed 7/1/08–6/30/09, the interest rate for unsubsidized Stafford loans is fixed at 6.8% and for subsidized Stafford loans at 6.0%.
For unsubsidized and subsidized Stafford loans first disbursed 7/1/06–6/30/08, the interest rate is fixed at 6.8%.
For loans issued 7/1/1998–7/1/2006, the interest rate is variable and resets every July 1. The in-school interest rate based on the 91-day T-bill + 1.7% and the repayment interest rate is based on the 91-day T-bill + 2.3%. The rate is capped to never exceed 8.25%. |
Borrowers who select Student Loan Funding (lender code 831455) as their Stafford loan lender can earn these valuable benefits***:
1. 0% default fee
2. 0.25 percentage point interest rate reduction for automatic debit
SALLIE MAE RESERVES THE RIGHT TO MODIFY OR DISCONTINUE LOAN PROGRAMS AT ANY TIME WITHOUT NOTICE. APPLICANTS SHOULD CHECK THE SALLIE MAE WEBSITE CLOSE TO THEIR LOAN DISBURSEMENT DATE TO OBTAIN THE MOST UP-TO-DATE INFORMATION REGARDING LOAN PROGRAMS, INCLUDING BORROWER BENEFITS.
***Subject to the above, benefits are available on loans guaranteed 6/9/08–6/30/09 and serviced by Sallie Mae throughout repayment. Terms and conditions apply. The 1% federal default fee will be paid on the borrower’s behalf on loans guaranteed by USA Funds or NELA 6/9/08–6/30/08. A 0.25 percentage point interest rate reduction for paying by automatic debit is available during active repayment for as long as the borrower’s monthly payment is successfully deducted from his/her bank account.
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