Federal Subsidized Stafford Loans
Most students who file a FAFSA are awarded a Federal Stafford Loan.
A Federal Parent Loan for Undergraduate Student (PLUS) is available
to parents of dependent students.
The Federal Subsidized Stafford Loan Program provides low-interest,
deferred-payment loans to undergraduate and graduate students who
demonstrate financial need. Need is calculated based on the FAFSA
along with the cost of school and other financial aid. These funds
help students with educational expenses. The federal government
subsidizes the interest on these loans before repayment
begins or during periods of deferment.
A student must be a US citizen or permanent resident, an undergraduate
or graduate student enrolled at least half-time, completed a FAFSA,
maintain satisfactory academic progress, and not exceeded annual
or lifetime aggregate loan limits. No credit check is required.
After graduation from college, dropping below half-time, or leaving
school for any other reason, a student receives a 6-month grace
period before starting repayment. There are a variety of repayment
options and a student may be eligible to postpone payments through
deferment or forbearance. Repayment is usually based upon a 10-year
plan. In certain circumstances, a person may be allowed up to 25
years for repayment.
Interest Rate and Origination Fee
The interest rate for Federal Stafford loans is variable, but does
not exceed 8.25%. The rate is adjusted each year on July 1. An origination
fee of up to 3 percent of the loan is charged for Federal Stafford
Loans. The fee is deducted proportionately from each loan disbursement