Stafford Loan Information

Types of Stafford Loans

There are two types of Stafford Loans: subsidized and unsubsidized.  The Federal government pays the interest on subsidized Stafford Loans while the student is in school and enrolled for at least 6 credits or in a deferment period. With unsubsidized Stafford Loans, the student is responsible to either pay or capitalize the interest while in school or during a deferment period.

To view a list of possible Stafford Lenders, click UMF's Stafford Lender list here.

Borrowing Limits

The amount of Stafford Loan a student may borrow is determined by grade level, cost of attendance, family contribution and other aid. The loan limits for subsidized and unsubsidized Stafford Loans combined are:

Students considered independent for financial aid purposes, and dependent students whose parents have been denied a PLUS loan, may be eligible to borrow additional unsubsidized Stafford Loan funds beyond the regular limits. Unsubsidized Stafford Loan limits for independent students are increased by $4,000 for freshmen and sophomores, and $5,000 for juniors and seniors.

Fees

Origination and default fees totaling up to 2% are deducted from each disbursement of the loan. Some lenders deduct the fee from loan disbursements and others cover the fees themselves; consult UMF's Stafford Lender list for particular lenders' features. These are collected by the Federal government and the guarantee agency to offset the cost of the loan program and loan defaults. 

Interest Rate

The interest rate for subsidized and unsubsidized Stafford Loans is variable and capped at 8.25%. The interest rate is set annually by the Federal government after June 30.

Other Requirements

Loan Counseling: First time Stafford Loan borrowers must receive loan counseling, the purpose of which is to explain the Stafford Loan program and student rights and responsibilities. Students will be instructed how to satisfy this requirement with their award notice.

Completing the Master Promissory Note (MPN): First time Stafford Loan borrowers must complete a Master Promissory Note which can be done online.  Click on the link above and follow the instructions.  The MPN provides the convenience of completing one promissory note for all the Federal Stafford Loans you will borrow for up to 10 years, if you borrow from the same lender each year.  Repeat borrowers using the same lender will receive funds under their previously completed MPN.

Loan Disbursement

Stafford Loan funds generally divided equally between semesters and are disbursed (paid) to a student by check or by Electronic Funds Transfer (EFT). With EFT, loan funds are electronically transmitted from the lender directly to the student's account with the Business Office.  Checks arrive through the mail and are deposited on student accounts as they arrive.  First-time borrowers must be enrolled for 30 days prior to their first disbursement.  Credit balances resulting from loan disbursements are refunded to the student (according to dates established by the Business Office), or the student may authorize the credit balance to remain on her/his account to be applied toward future charges.

For more information about this program, please consult the Student Guide published yearly by the U.S. Department of Education.