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Types of Loans

Subsidized and Unsubsidized Stafford Loans

A Stafford Loan is a low-interest, long-term loan with special benefits for students. Stafford Loans are the largest source of financial aid funds.

  • The interest is variable but will not exceed 8.25%. Interest rates are adjusted every year on July 1st.

  • The Standard Repayment plan is 10 years, but there are some repayment plans that may give you more time depending upon the amount you borrow.

  • The minimum scheduled payment will be $50 per month and begin after a six-month grace period. Your grace period begins after you graduate (or drop below half-time attendance). Monthly repayments will vary depending on amount borrowed.

You must be enrolled at least half-time in an eligible academic program to take out a Stafford Loan. You must also complete the Free Application for Federal Student Aid (FAFSA). Students with financial need, based upon the expected family contribution (EFC) and cost of attendance, may qualify for both subsidized and unsubsidized Stafford Loans. The amount of other financial aid, including scholarships, grants, and other resources can affect how much you qualify for. Students that do not have financial need, may qualify for unsubsidized Stafford Loans.

In addition to the FAFSA, a master promissory note (MPN) must be signed stating you promise to repay your loan(s). Read the entire promissory note before you sign it; this is a legal document. You must also complete an entrance counseling session, which explains the loan terms and conditions. Your MPN and entrance counseling must be completed before the loan funds will be disbursed to pay your school charges. Your school may also request additional information in order to receive your loan funds. See you school's website or financial aid material for specific information.

What is the difference between subsidized and unsubsidized loans?

Subsidized Stafford Loan - The federal government will pay the interest while you are in school, during your grace period, and during authorized periods when payments can be suspended, called deferments.

Unsubsidized Stafford Loan - the federal government does NOT pay your interest. The interest is always your responsibility to pay. If you do not pay the interest while you are in school, your grace period, or during deferments, the interest on your loan will capitalize and be added to your principal balance.

Stafford Loan Limits

Subsidized and/or Unsubsidized Base Amounts Additional Unsubsidized Amounts for Independent Students * Total Amounts for Independent Students
Freshman $2,625 $4,000 $6,625
Sophomore $3,500 $4,000 $7,500
Junior and Senior $5,500 $5,000 $10,500
Graduate and Professional Students * $8,500 $10,000 $18,500
Maximum Undergraduate Borrowing $23,000 $23,000 $46,000
Maximum Undergraduate and Graduate Borrowing $65,500 $73,000 $138,500**

Federal PLUS Loan

The PLUS loan is available for parents of undergraduate, dependent students.

  • The interest for a PLUS Loan is variable and may change each July 1. The maximum interest rate is 9%.

  • Parents normally have up to 10 years to repay the loan, but there are some repayment plans that may give more time depending upon the amount borrowed.

  • Scheduled payments will not be lower than $50 per month and begin 60 days after the PLUS Loan is fully disbursed.

A fee of up to 4% of the loan is deducted from each loan disbursement. The Federal Government charges a 3% origination fee and College Access Network charges a 1% guarantee fee.

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