Stafford Loan Overview

A Federal Direct Stafford Loan is a low-interest, fixed rate loan made to students. Generally, every student who files a FAFSA is eligible to borrow a Federal Direct Stafford Loan. Students may qualify to have a portion of their federal loan eligibility subsidized based on their financial need as determined by the FAFSA results. A student must be enrolled at least half-time to be eligible to receive aFederal Direct Stafford Loan.

Helpful information regarding Federal Student Aid is available online at www.studentaid.ed.gov.

Stafford Loan Interest Rates

  Subsidized Stafford Loan

Unsubsidized Stafford Loan

Interest Rate *4.66% (fixed) *4.66% (fixed)
Is interest charged when the students is enrolled in school? No - interest does not accrue when the student is enrolled in school.     Yes - interest accrues when the student is enrolled in school.          
Is interest charged during Deferment? No.

Yes.

Is interest charged during the Grace Period? Yes. Yes.
Is interest charged during Repayment? Yes. Yes.

*2014-2015 Loans disbursed between July 1, 2014 and June 30, 2015. Click here for prior year interest rates.  

  • Loan Origination Fee: 1.072%
    • The origination fee is deducted from each disbursement 
  • Grace Period
    • 6 months
    • The Grace Period begins at the time of graduation or when the student is no longer enrolled at least half-time (at least 9 units per term at Lawrence)
  • Repayment
    • Repayment begins after the completion of the 6-month grace period
    • Click here for repayment options
    • Click here for information about postponing repayment
  • Loan Servicer

Final Steps in Receiving Your Stafford Loan

If you received a Federal Direct Stafford Loan as part of your financial aid award and/or are a first-time loan borrower, please complete the following requirements:

  1. Entrance Counseling
    Entrance counseling will walk you through the Direct Loan process and explain your rights and responsibilities as a borrower. All first time Direct Loan borrowers must complete entrance counseling before their loans can be disbursed.
  2. Master Promissory Note (MPN)
    The Master Promissory Note (MPN) is a legal document in which you promise to repay your loans(s) and any acrrued interest and fees to the U.S. Department of Education. It explains the terms and conditions of your loan(s). Once you complete the MPN, you will not have to complete another Direct Loan Promissory Note for the duration of your Lawrence education.

Subsidized & Unsubsidized: What's the Difference?

Interest is not charged on a Subsidized Stafford Loan while you're enrolled at least half-time at Lawrence (9 or more units), during grace periods, and during deferment periods. Subsidized Stafford Loans are for students with "financial need" as determined by their Expected Family Contribution (EFC).

You are not required to demonstrate "financial need" to receive a Unsubsidized Stafford Loan. Interest is charged and accumulates on an Unsubsidized Stafford Loan from the time it’s first disbursed (credited to your student account). You can elect to pay the interest (although you're not required to) while you're in school, during grace periods, deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principal amount of your loan). If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount.

Direct Subsidized Stafford Loan

The Federal Direct Subsidized Stafford Loan is awarded to students who demonstrate financial need as determined by the FAFSA. Interest on a Federal Direct Subsidized Loan is paid by the federal government while the student is enrolled at least half-time, during deferment periods and, for loans disbursed before July 1, 2012, during the 6-month grace period. Repayment begins 6 months after a student graduates or is no longer enrolled at least half-time (9 units).

Direct Unsubsidized Stafford Loan

Federal Direct Unsubsidized Stafford Loans are non-need-based loans. Interest begins accruing on the loan at the time of disbursement. The student has the option to make interest payments during the in-school period, or to allow the accrued interest to be capitalized (added on) to the principal balance. Repayment begins 6 months after a student graduates or is no longer enrolled at least half-time.

Stafford Loan Limits

Stafford Loan Limits for Dependent Students

Grade Level

Maximum Subsidized Amount Additional Unsubsidized Amount Maximum Stafford Loan Amount
Freshman
(0 - 47 Units)
$3,500 $2,000 $5,500
Sophomore
(48 - 101 Units)
$4,500 $2,000 $6,500
Junior & Beyond
(102 - 155 Units)
$5,500 $2,000

$7,500

Maximum Aggregate Undergraduate Stafford Loan Limit: $31,000. Of this amount, only $23,000 can be subsidized loan funding. To estimate your monthly Stafford Loan payment upon graduation, use the Federal Direct Stafford Loan Repayment Calculator.

Stafford Loan Limits for Independent Students & Dependent Students Whose Parents are Unable to Qualify for PLUS Loan

Grade Level Maximum Subsidized Amount Additional Unsubsidized Amount Maximum Stafford Loan Amount
Freshman
(0 - 47 Units)

$3,500

$6,000 $9,500
Sophomore
(48 - 101 Units)
$4,500 $6,000 $10,500
Junior & Beyond
(102-155 Units)
$5,500 $7,000 $12,500

Maximum Aggregate Undergraduate Stafford Loan Limit for Independent Students and Dependent Students whose parents are unable to qualify for a PLUS Loan: $57,000. Of this amount, only $23,000 can be subsidized loan funding. To estimate your monthly Stafford Loan payment upon graduation, use the Federal Direct Stafford Loan Repayment Calculator

Who is My "Loan Servicer"

Click here for a list of Loan Servicers appointed by the U.S. Department of Education.

Your Federal Direct Stafford Loan will be serviced by one of the loan servicers appointed by the U.S. Department of Education. Your loan servicer will contact you after your Direct Loan (Stafford or PLUS) has been disbursed. You can also view your Direct Loan information and find your loan servicer by accessing the National Student Loan Data System online at www.nslds.ed.gov (you will need the PIN you received from the U.S. Department of Education).

Repayment Options

You have several repayment options for your Federal Direct Stafford Loans. In addition to different repayment plans, the U.S. Department of Education offers loan forgiveness programs for teachers and public service positions.

  • Repayment Options
    • Standard - 10 years to repay
    • Extended - 25 years to repay (must have more than $30,000 in Stafford Loans)
    • Graduated - 10 years to repay (monthly payment starts out low and then increases every 2 years)
    • Income Based Repayment - monthly payment is based on income and family size (must apply annually)
  • Calculate Your Monthly Loan Payment
  • Stafford Loan Forgiveness Programs

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