• Subsidized loans, are need-based and interest will not accrue on the loan while you are in school at least half-time and during grace and authorized deferment periods. You become responsible for the interest when you leave school and start paying back your loan.
• Unsubsidized loans, are not need-based, and you are responsible for all of the interest that accrues on the loan, including while you are in school.

If you do not qualify for subsidized Stafford Loans, or need
more money than the subsidized program can offer, you may qualify for an unsubsidized Stafford loan, regardless of your family income. Except for the in-school interest provisions, both subsidized and unsubsidized Stafford loans have similar terms.

Eligibility

• You must have submitted a Free Application for Federal Student Aid (FAFSA).
• For subsidized Stafford loans, you must have financial need as determined by your school.
• You must be a U.S. citizen or national, a U.S. permanent resident, or eligible non-citizen.
• You must be enrolled or plan to enroll at least half time.
• You must be accepted for enrollment or attend a school that participates in the Federal Family Education Loan Program.
• You must not be in default on any education loan or owe a refund on an education grant.
• No credit check is required.

Interest Rates

• The interest rate on Stafford loans first disbursed beginning July 1, 2006 is fixed at 6.8%.
• The interest rate on Stafford loans first disbursed on or after July 1, 1998 but before June 30, 2006 is variable and may change on July 1 of each year but will never exceed 8.25%.
  • The rate is based on: The 91-day T-bill rate + 1.70% during in-school, grace, and deferment periods.
  • The 91-day T-bill rate + 2.30% during repayment periods.
• The current interest rate on Stafford loans first disbursed on or after July 1, 1998 but before June 30, 2006 is 7.22% in repayment and 6.62% during in-school, grace, and deferment periods.

Fees
For loans first disbursed July 1, 2007–June 30, 2008: Up to 2.5% in fees that includes a 1.5% federal origination fee and a 1% federal default fee. There are lenders and guarantors that work with Sallie Mae that pay all or a portion of these fees.

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Loan Limits
Loan limits vary depending on your student status. Independent students often may borrow more than dependent students. Your grade level is also a factor. Typically, the Stafford annual loan limits are:

Annual Loan Limits for
Subsidized and Unsubsidized Stafford Loans

*For loans first disbursed on or after July 1, 2008. **Exceptions may apply to certain graduate students.

Repayment
You receive a six-month grace period before starting repayment on Stafford loans after dropping below half-time study, graduation from college, or leaving school for other reasons.

A variety of repayment terms are available:

• Standard Repayment
  Principal and interest payments are due each month throughout the loan repayment term.

• Graduated Repayment
  Payments are lower at the beginning of repayment and step up at specified periods and in specified amounts over the term of the loan.

• Income-Sensitive Repayment
  Monthly payments are based on a percentage of the borrower's monthly income.

• Extended Repayment
  Lower monthly payments through an extended repayment period, up to 25 years.

• Student Loan Consolidation
  Combine eligible loans into a new loan with a single monthly payment and a fixed interest rate.

You may be eligible to postpone payments through deferment or forbearance.

Before your loan enters repayment, your financial aid officer will provide details on these options.

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