Federal Direct Stafford Loans are available to students who apply for financial aid using the FAFSA. They have a variable interest rate and are guaranteed by the federal government. The FAFSA is the only application necessary to receive Federal Direct Stafford Loans but you must accept your loans on MaineStreet in order to receive them.
Repayment on Stafford Loans is not required until 6 months after the student leaves school, as long as the student remains enrolled at least half-time. Interest accrual while the student is in school is dependent on the type of Stafford Loan received (Subsidized or Unsubsidized). The interest rate maximum is currently 6.8%.
Think twice before borrowing any loan; don’t borrow just because you may be eligible. Take into consideration any other financial aid you are receiving before you borrow. Look into how much you may have available from your own resources before you borrow. Carefully evaluate your costs to see if you can reduce your expenses before you borrow. Taking out a loan should be your last resort, not your first option.
Subsidized Stafford Loans are need-based loans. The government pays the interest on the loan while the student is enrolled at least half-time and during other authorized periods called deferments. The amount of loan offered is based on academic grade-level.
Unsubsidized Stafford Loans are available to students in addition to Subsidized Stafford Loans and are not need-based. Also, all students are offered $2,000 in Unsubsidized Stafford Loans for the academic year. The government does not pay the interest; the student can choose to either pay the interest while in school or have the interest added to the loan principal to be repaid later.
(for undergraduate dependent students only)
If a parent is denied a Parent Direct PLUS Loan, the dependent undergraduate student can be treated as an independent student and may be eligible for additional Unsubsidized Stafford Loans. The student must contact our office if they would like to explore this funding option.
Direct Loans with a first disbursement date between July 1, 2012 and June 30, 2013 are:
The origination fee for a Direct Stafford Loan is 1%.
If you are borrowing a Direct Stafford Loan for the first time, you will need to complete Entrance Counseling.
When you stop attending school or if you drop below half time, you will need to complete exit counseling if you have borrowed a Stafford Loan.
All students borrowing a Direct Stafford Loan for the first time need to complete a new MPN.
For charts on annual grade-level and lifetime borrowing limits, please click here.
For an in-depth loan repayment calculator, click here.
Some students may want to consider consolidating their federal student loans into a Consolidation Loan. This is an option that has both pros and cons, so be sure you investigate this option carefully. For more information on Consolidation Loans, click here.