Subsidized/Unsubsidized Stafford Loans

Stafford Loans are Federal Direct Loans 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 the interest that accrues on Subsidized Stafford Loans during certain periods.

Compare this loan to other loans in the table below.

• Eligibility
  
  • 
    1. Must be undergraduate, graduate, or professional student enrolled at least half time as a degree-seeking student. Note: Graduate and professional students are no longer eligible for the Subsidized Stafford Loan, effective July 1, 2012.
    
    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.
• Award Amounts
  • Stafford Loan limits depend on year in school and dependency status.

    Year/Classification	Annual Subsidized Stafford Loan Base Limit	Annual Additional Unsubsidized Loan Limit	Annual Stafford Loan Limit Total
    Dependent Students*
    Freshman	$3,500	$2,000	$5,500
    Sophomore	$4,500	$2,000	$6,500
    Junior or senior	$5,500	$2,000	$7,500
    Independent Students*
    Freshman	$3,500	$6,000	$9,500
    Sophomore	$4,500	$6,000	$10,500
    Junior or senior	$5,500	$7,000	$12,500
    Graduate Students	$0	$20,500	$20,500
    Doctor of Pharmacy Student Years 1, 2, 3	$0	$33,000	$33,000
    Doctor of Pharmacy Student Year 4 (10 months)	$0	$34,389	$34,389
    Doctor of Veterinary Medicine Student Years 1, 2, 3	$0	$40,500	$40,500
    Doctor of Veterinary Medicine Student Year 4 (11 months)	$0	$44,945	$44,945

• Interest Rates

  • Subsidized and Unsubsized Stafford Loans disbursed between July 1, 2013 and July 1, 2014 have a fixed interest rate of 6.8%. This is effective for undergraduate and graduate/professional student borrowers.

• Loan Fees, Effective March 1, 2013

  • Stafford Loans: 1.051% of accepted amount. The Department of Education's website and systems may not reflect this update immediately.

  • For example, for every $1,000 of Stafford Loans borrowed, the origination fees will be $11.00 (rounded up).

• Loan Deadline
  • Fall term only (August-December) requests for Federal Stafford Loans may be processed if accepted by Thursday, December 6, 2012 at noon.
  • Spring only (January-May) or academic year (August-May) requests for Federal Stafford Loans may be processed if accepted by Thursday, May 2, 2013 at noon.
  • Summer loan deadlines depend upon the module(s) of enrollment. Loans must be accepted by the date indicated for the latest module you attend.

  Module 1: Wednesday, June 7, 2013 at noon

  Module 2: Tuesday, July 5, 2013 at noon

  Module 3: Wednesday, August 2, 2013 at noon

• Steps to apply for a Federal Stafford Loan
  • 1. 1. File the Free Application for Federal Student Aid (FAFSA) at www.fafsa.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 at myPurdue.
    2. 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.
    3. 3. 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 at myPurdue.
       
    4. 4. The borrower must also complete a Stafford Master Promissory Note (MPN) at studentloans.gov (if not already on file).
    5. 5. First time borrowers should complete entrance counseling.
    6. 6. DFA certifies eligibility with the Direct loan servicer.
    7. 7. Stafford loan funds are processed electronically through the Purdue Bursar. The student will be notified by the Bursar's Office that funds have been processed. 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 via paper check or direct deposit.
• Master Promissory Note

  • The Stafford Loan Master Promissory Note is a multi-year or serial loan feature of the Stafford program. It allows borrowers to receive future Stafford Loan funds without completing and signing additional promissory notes as long as the borrower remains eligible and completes appropriate loan request processes. By signing only one promissory note, the delivery of Stafford Loan funds will occur even faster because it eliminates the time it takes for a promissory note to be mailed, completed, and returned to the loan service provider. Borrowers use their FAFSA PIN to sign their promissory note at studentloans.gov.

• Loan Entrance Counseling

  • Entrance Counseling, which should not be confused with Financial Awareness Counseling, will walk you through the Direct Loan process and explain your rights and responsibilities as a borrower. If you have not previously received a particular loan type (subsidized/unsubsidized or PLUS),  the Federal Government requires you to complete loan counseling at www.studentloans.gov to ensure that you understand the responsibilities and obligations you are assuming.
    
    You will need to log in using your SS# and your FAFSA PIN.
    
    You will need about 30 minutes to complete the counseling session

• 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 student loan counseling page. See more information about repayment in our Direct Loan Fact Sheet.

    See repayment examples here assuming a 6.8% fixed interest rate and 10 year repayment term. Borrowers can calculate payments at www.studentloans.gov or refer to the National Association of Student Financial Aid Administrators' (NASFAA) Student Loan Repayment Interest Tables (PDF).

    Amount Borrowed	Payment
    $5,000	$58
    $10,000	$115
    $20,000	$230
    $30,000	$345
    $50,000	$575