Subsidized Stafford Loan

This loan is a federally funded loan provided to students through the U.S. Department of Education. This loan requires unmet financial need. The federal government will pay the interest while the student is enrolled in school and during the six-month grace period. The student must repay the loan plus a variable or fixed rate of interest beginning six months after leaving the school or dropping to less than half-time status.

Generally, students enrolled in a certificate program or a degree program without having completed 30 credit hours may borrow up to $3,500 per year or the amount of unmet financial need, whichever is less. Students who have completed more than 30 credit hours in a degree program at the time of application may borrow up to $4,500 per year or the amount of unmet financial need, whichever is less.

Direct Student Loan Changes

Direct Subsidized loans will not be eligible for an interest subsidy during the six-month grace period.

Subsidized loans are loans for which the borrower is not responsible for the interest while the student is enrolled in college on at least a half-time basis, when the loan is in the six-month grace period after the student is no longer enrolled at least half time, or if the loan is in a deferment status. This provision eliminates the interest subsidy provided during the six-month grace period for subsidized loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014. If you receive a subsidized loan during this time frame, you will be responsible for the interest that accrues while your loan is in the grace period. You do not have to make payments during the grace period (unless you choose to) but the interest will be added (capitalized) to the principal amount of your loan when the grace period ends. This provision does not eliminate the interest subsidy while the borrower is in school or during eligible periods of deferment.

All subsidized loans made to undergraduate students will have a fixed interest rate of 6.8 percent.

Subsidized loans for which the first disbursement is on or after July 1, 2012, will have a 6.8 percent fixed interest rate. Note: In the Fiscal Year 2013 budget request, the Administration has proposed maintaining the interest rate on subsidized loans at the current rate of 3.4 percent for the 2013-2014 school year.

The U.S. Department of Education can no longer offer borrowers repayment incentives.

Effective for loans first disbursed on or after July 1, 2012, the Department of Education is prohibited from offering any repayment incentives to Direct Loan borrowers, except interest rate reductions to borrowers who agree to have payments automatically electronically debited from their bank account.

If you have any questions about how these changes could impact you, please contact the financial aid administrator at your school or call 1-800-4-FED-AID.