Stafford Loans are for undergraduate, graduate and professional degree students. There are two types of Stafford Loans: subsidized and unsubsidized. You must have financial need to receive a subsidized Stafford Loan. Financial need is not a requirement to obtain an unsubsidized Stafford Loan. The U.S. Department of Education will pay (subsidize) the interest that accrues on subsidized Stafford Loans during certain periods.

Eligibility

1. Must be undergraduate, graduate, or professional student enrolled at least half time as a degree-seeking student.
2. Must be a U.S. citizen, U.S. national, or permanent resident of the United States.
3. Cannot be in default on a Federal education loan or owe a repayment of Federal Title IV aid.
4. Must have financial need to receive a SUBSIDIZED Stafford loan; the U.S. Department of Education will pay (subsidize) the interest that accrues on Subsidized Stafford Loans during certain periods.
5. Financial need is not a requirement to obtain an UNSUBSIDIZED Stafford Loan; the borrower is responsible for interest that accrues on Unsubsidized Stafford Loans.
   

Award Amounts - Effective July 1, 2008:
Stafford Loan limits depend on year in school and dependency status.

Interest Rates and Fees
For Stafford loans disbursed between July 1, 2008, and June 30, 2009, the interest rate is fixed at 6.0% for undergraduate Subsidized Stafford Loans (only) and fixed at 6.8% for unsubsidized Stafford Loans and graduate/professional Stafford Loans. For Summer 2008 up to 2% in fees may be charged to the borrower, including a 1% federal origination fee and a 1% federal default fee. In Fall 2008 the effective up front fee will be 0.5% of the loan. For example, the proceeds of a $10,000 loan will be reduced by $50. If a student fails to make 12 consecutive on-time payments, they will be billed an additional 1.5% fee.

Steps to apply for a Federal Stafford Loan

1. File the Free Application for Federal Student Aid (FAFSA) at www.fafsa.ed.gov (this is a requirement) and submit all documents requested by the Division of Financial Aid
   (DFA); check for required documents via the online Financial Aid Self Service system through www.ssinfo.purdue.edu.
   
   
2. DFA will send the student an Award Notice that the borrower can use to determine loan period, the type of eligibility, and the amount of eligibility; the borrower needs to determine how much they want to borrow and will have the option to accept the full amount offered or reduce the loan amount via the online Financial Aid Self Service system through www.ssinfo.purdue.edu.
   
   
3. For Summer 2008, Purdue students will still borrow in the Federal Family Education Loan Program (FFELP) and will need to choose a FFELP lender. Beginning in Fall 2008 (the 08-09 Academic year and following), Purdue students will borrow in the Federal Direct Lending Program.
   
4. DFA certifies eligibility with the loan service provider (beginning in June 2008) and the loan service provider approves the loan once the borrower has completed a Master Promissory Note (MPN) at www.dlenote.ed.gov (if not already on file).
   
   
5. Stafford loan funds are normally sent electronically to the Purdue Bursar by the loan service provider. The student will be notified by the Bursar’s Office that funds have arrived. Funds are applied first to fees, then to any housing costs (if the Bursar bills for housing). Any remaining Stafford funds are sent to the student. Please note that it is important that students keep their address up-to-date via SSINFO and read all email from facontact@purdue.edu.
   

Repayment Information
Loans are in deferred status as long as the student remains enrolled at least half time in a degree seeking program. If you would like more information regarding repayment, visit our Stafford Loan Repayment counseling page or our general student loan counseling page.