Stafford Loan

The Stafford loan is usually the best option for students requiring additional funding for school once grants, scholarships and other free aid is awarded. Federal Stafford Loans are made directly to the student. Interest rates on Stafford loans are kept low because they are guaranteed by the government. Stafford loans are low-cost federal loans which are available to undergraduate students at a fixed interest rate of 6.8% for unsubsidized and 5.6% for subsidized for the 2009-2010 academic year. The subsequent year’s fixed rates for subsidized Stafford loans, as set by the Department of Education, will decrease as shown in the chart below.

Subsidized Student Loans: The government pays the accrued interest on the loan while the student is still in school (at least at half-time status), during the grace period and throughout approved deferment periods. Eligibility for this type of loan is based on financial need.

Unsubsidized Student Loans: The student is responsible for the interest accrued on the loan. Repayment will begin 6 months after the student graduates or enrolls in school less than half-time. Financial need or income levels are not factors for eligibility.

Benefits

• 0.25% ACH: Interest rate is reduced by 0.25% if automatic payments are made directly from your bank account.
• 24/7 Account access

Stafford Loan details for the 2009-2010 academic year:

Loan Type	Interest Rate	Fees
Stafford Loan	5.6% (subsidized) 6.8% (Unsubsidized)	0% Federal Default Fee* .5% Origination Fee

Interest Rate for Undergraduate Subsidized Stafford Loans:

Academic Year	Rate
2009-2010	5.6%
2010-2011	4.5%
2011-2012	3.4%

Loan Limits:

Year	Dependent Students	Independent Students
1st year	$5,500	$9,500
2nd year	$6,500	$10,500
3rd year	$7,500	$12,500
4th year	$7,500	$12,500