Undergraduate Subsidized Stafford Loan

Am I eligible for this loan?

You must be enrolled at least half time in an eligible program of study.

How much can I borrow with this loan program?

If you are a dependent undergraduate student or independent undergraduate student, you can borrow up to:

The total debt you can have outstanding in subsidized Stafford loans is $23,000.

How can I get this loan?

You first must complete the Free Application for Federal Student Aid (FAFSA) or Renewal FAFSA. After the FAFSA is processed, your school will review the results and inform you about your loan eligibility. Next you must complete the Master Promissory Note (available from a lender, guarantor, or financial aid office), which is the promissory note for your loan.   

When will I get my money?

In most cases, your loan is disbursed in two installments. Your loan money will be used to pay your tuition and fees. If loan money remains, your school will credit your account or pay you directly. Lenders send funds directly to your school.

Can I cancel the loan?

Yes. Your school must notify you in writing whenever it credits your account with your loan proceeds. This notification must be sent to you no earlier than 30 days before and no later than 30 days after the school credits your account. You may cancel all or a portion of your loan if you inform your school within 14 days after the date that your school sends you this notice or by the first day of the payment period, whichever is later. Your school can tell you the first day of your payment period.   

What is the interest rate of this loan?

You will not be charged any interest for a subsidized loan before you begin repayment and during the authorized period of deferment. The interest rate on your loan could change each year of repayment but, by law, it will never be more than 8.25 percent.  

Are there any special fees I will pay?

Many guarantors no longer charge a guarantee fee for education loans. But if they do, this fee could be up to 1 percent of the loan amount. Additionally, your lender may charge an origination fee up to 3 percent of the loan amount. Guarantee and origination fees, if charged, are deducted from the loan funds before they are sent to the school. 

What are my repayment options?

The normal repayment term for this loan is 10 years. You may be able to extend repayment by deferring or consolidating your loans.  

You can choose one of the following plans:
-The Standard Repayment Plan requires you to pay a fixed amount each month -- at least $50 or the interest that has accrued.  
-The Graduated Repayment Plan sets your payments lower at first and then increases them over time. Each of your payments must equal the interest accrued on the loan between scheduled payments. 
-The Income-Sensitive Repayment Plan bases your monthly payment on your yearly income and your loan amount. Payments may change as your income rises or falls.  
-The Extended Repayment Plan is for borrowers with FFELP loans totaling more than $30,000. This plan offers a choice of fixed or graduated payments over a period of up to 25 years.