Links open in new window

What Types of Federal Student Loans are Available?
How do Students and Parents Apply for Student Loans?
What are the Interest Rates for Federal Stafford and PLUS Loans?
How Much Can Students Borrow in Federal Stafford Loans?
When Does Repayment Begin on Student Loans?

---

What Types of Federal Student Loans are Available?
The Federal Family Education Loan Program (FFELP) offers three types of federal loans:

• Subsidized Federal Stafford Loans are low-interest loans based on financial need. Interest is paid by the federal government while you’re attending school at least half-time, during the six-month grace period following graduation or a drop to less than half-time enrollment, and during specified loan deferment periods.

• Unsubsidized Federal Stafford Loans are low-interest loans that aren’t based on financial need. You’re responsible for all interest accrued from the date the loan is disbursed. This includes the time that you attend school, the grace period and any type of loan deferment.

• Federal PLUS and Grad PLUS Loans are low-interest loans made to graduate or professional students and the biological or adoptive parents of dependent undergraduate students. PLUS loans aren’t based on financial need. The borrower is responsible for all accrued interest.
  
  

  
  

 

How do Students and Parents Apply for Student Loans?
To receive a Federal Stafford loan, the student must attend an eligible school at least half-time and must be a U.S. citizen or an eligible non-citizen. To apply for a student loan (including federal grants and work-study), the student must complete a Free Application for Federal Student Aid (FAFSA) each year. >>Go to “Applying for Aid” for more information.

After the FAFSA has been completed and sent to the U.S. Department of Education, the student will receive a Student Aid Report (SAR). After the student reviews the SAR to ensure that all information submitted is correct, the information will be sent electronically to the school(s) listed on the FAFSA application. After all application materials are complete, the financial aid office will notify the student of his or her eligibility for federal student aid, including student loans.

To apply for a Federal PLUS loan, parents and graduate or professional students should contact their lender or the financial aid office at the school, college or university the student plans to attend. 

Parent applicants don’t have to show financial need to qualify and aren’t required to complete the FAFSA. However, all graduate and professional student applicants must complete the FAFSA. Applicants with an unfavorable credit history aren’t usually eligible for a Federal PLUS loan.

 

What are the Interest Rates for Federal Stafford and PLUS Loans?
Federal Stafford and Federal PLUS loans have fixed interest rates. This means the interest rate will remain constant for the life of the loan. As of July 1, 2009:

• Subsidized Federal Stafford loans for undergraduate students have an interest rate of 5.60%;
  
• Subsidized Federal Stafford loans for graduate students have an interest rate of 6.80%;
  
• Unsubsidized Federal Stafford loans for undergraduate and graduate students have an interest rate of 6.80%; and
  
• Federal PLUS loans have an interest rate of 8.50%

 

How Much Can Students Borrow in Federal Stafford Loans?
The following charts show the maximum loan amounts for a full academic year. The student's financial need, other sources of aid, cost of attendance and length of academic year may affect the amount that can be borrowed.

Dependent* Students - Federal Annual Loan Limit

Grade Level	Total Subsidized & Unsubsidized
First Year	$5,500
Second Year	$6,500
Third Year and Beyond	$7,500
Graduate/Professional	N/A

* Dependent students whose parents are able to borrow a PLUS loan

 

Independent and some Dependent* Students - Annual Loan Limit

Grade Level	Subsidized Limit	Unsubsidized Limit** Less amount borrowed under Subsidized Loan Program
First Year	$3,500	$9,500
Second Year	$4,500	$10,500
Third Year and Beyond	$5,500	$12,500
Graduate/Professional	$8,500	$20,500
Health Professions	$8,500	$47,167***

* Dependent students whose parents are unable to borrow a PLUS loan
**Less amount borrowed under Subsidized Federal Stafford loan program
***$47,167 is the total annual graduate professional Stafford loan maximum of $20,500 plus the maximum Health Education Assistance Loan of $26,667 in additional unsubsidized Stafford loan

Note: The student's annual Federal Stafford loan eligibility is determined by each school's financial aid office. Please contact the financial aid office with eligibility questions. The additional amount of an unsubsidized Federal Stafford loan that a health professions student may borrow annually is based upon the student's academic program and the length of the academic year.

 

In addition to the maximum annual amounts, Federal Stafford loans have a total aggregate limit that can't be exceeded.

Maximum Agreggate Federal Stafford Loan Amounts

Classification	Total Loan Limit
Dependent UndergraduatesΛ	$31,000*
Independent and some Dependent† Undergraduates	$57,500*
Graduate and Professional	$138,500**
Health Professions	$224,000**

^*  No more than $23,000 of which can be subsidized
^** No more than $65,500 of which can be subsidized
^Λ  Dependent students whose parents are able to borrow a PLUS loan
^†  Dependent students whose parents are unable to borrow a PLUS loan

 

When Does Repayment Begin on Student Loans?
Repayment on Federal Stafford loans begins six-months after the student graduates or drops below half-time enrollment. This six-month period, called a grace period, gives the student time to find a job.

For PLUS loan borrowers, the first payment is due within 60 days after full disbursement unless the borrower qualifies for a deferment. Parent PLUS loan borrowers can defer their loan:

• When the parent borrower is enrolled at least half-time at an eligible school.
  
• When the student for whom the parent acquired the loan is enrolled at least half-time at an eligible school (upon borrower request).
  
• During the six-month period immediately following the date on which the borrower ceased to be enrolled at least half-time at an eligible school (upon borrower request).
  
• During the six-month period immediately following the date on which the student for whom the parent acquired the loan ceased to be enrolled at least half-time at an eligible school (upon borrower request).
  

Parent borrowers who are interested in a deferment must contact the lender about the eligibility requirements.  Parent PLUS loans disbursed prior to July 1, 2008 have different deferment eligibility requirements.

For graduate and professional student PLUS loan borrowers, the first payment is due within 60 days after full disbursement unless the borrower qualifies for a deferment.  Graduate or professional student PLUS loan borrowers can defer their loan:

• When the graduate or professional student borrower is enrolled at least half-time at an eligible school.
• During the six-month period immediately following the date on which the graduate or professional student borrower ceased to be enrolled at least half-time at an eligible school (upon borrower request).

Contact the financial aid office or lender for more information about repayment of student loans. There are several repayment options for borrowers to consider.  

If you're having trouble making your monthly payments, contact your lender immediately.  You may be able to delay your payments by getting a deferment or forbearance.