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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
    • 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.
    • Must be a U.S. citizen, U.S. national, or permanent resident of the United States.
    • Cannot be in default on a Federal education loan or owe a repayment of Federal Title IV aid.
    • IMPORTANT! Please review the following document provided by the U.S. Department of Education for changes made to Subsidized Stafford Loan eligibility.
      Subsidized Stafford Loan Eligibility Time Limitation
  • 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
      Dependent Undergraduate Aggregate (Lifetime) Limit
      $31,000 (up to $23,000 may be subsidized)
      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
      Independent Undergraduate Aggregate (Lifetime) Limit
      $57,500 (up to $23,000 may be subsidized)
      Graduate Students $0 $20,500 $20,500
      Graduate Student Aggregate (Lifetime) Limit

      $138,500 (up to $65,000 subsidized; graduate students no longer eligible for subsidized loans after July 1, 2012)

      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 Pharmacy Aggregate (Lifetime) Limit Varies based on program
      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
      Doctor of Veterinary Medicine Aggregate (Lifetime) Limit Varies based on program
  • Interest Rates
  • Loan Fees
    • Stafford Loans: 1.072% 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 11, 2014 at noon.
    • Spring only (January-May) or academic year (August-May) requests for Federal Stafford Loans may be processed if accepted by Thursday, May 7, 2015 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 4, 2014 at noon

      Module 2: Tuesday, July 2, 2014 at noon

      Module 3: Wednesday, July 30, 2014 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 the Student Loan Repayment, New Loan Borrower Frequently Asked Questions, or Student Loan Terms pages.
    • 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

You may go to this free, user-friendly online tool where you can combine all your student loans in one repayment calculator. You enter real numbers and get real results instantly, in plain language with easy-to-understand charts and graphics. With just a few clicks, you can see the impact of repayment options with PayBackSmarter:

Federal student loan consolidation

Extra principal payments

Graduated repayment

Income-based repayment

How long does it take to process a Stafford loan?


Loan Comparison Chart

Interest Rate
3.86-5.41%
5.0%
5.0%
6.41%
6.41%

2.25-13.99%

Check with your lender.

Interest Rate
Type
Fixed
Fixed
Variable or fixed - Check with your lender.
Fees
1.072% of the accepted amount
None
None
4.288% of the accepted amount
4.288% of the accepted amount

0-5% of the accepted amount

Check with your lender.

Minimum enrollment
Undergrad: 6 cr, Grad: 4  cr
Undergrad: 6 cr, Grad: 4 cr 
12 cr. hours
6 cr hours
4 cr hours
Less than half-time for some - Check with your lender.
FAFSA
required
YES
YES
YES
YES
YES
NO
SAP required
YES
YES
YES
YES
YES
Check with your lender.
Standard repayment term
10 Years
10 Years
10 Years
10 - 25 Years
10 Years

Typically 5-15 years

Check with your lender.

When payment starts
6 months after graduation or falling below half-time enrollment
Perkins: 9 months (Purdue Loan: 6 months) after graduation or falling below half-time enrollment
12 months after graduation or falling below 12 cr. hours
Optional-based upon application
Immediately after falling below half-time enrollment
Check with your lender.
Who can apply
Student
Student
Student
Parent
or Step Parent
Student
Student
Responsible for repayment
Student
Student
Student
Parent
Student
Student
Student
Credit Check Required
NO
NO
NO
YES
YES
YES
Loan Limits
Based upon grade level and dependency status
$2,000
$2,000
Up to 100% of the cost of attendance, minus other financial aid received
Up to 100% of the cost of attendance, minus other financial aid received

Generally, up to 100% of the cost of attendance, minus other financial aid received.

Check with your lender.

Minimum required payment during student's enrollment
None; interest may accrue.
None
None
Payments can be deferred while the student is in school; interest continues to accrue and is added to the loan's principal after graduation.
None; interest may accrue.
Many private lenders allow payments to be deferred while the student is in school; interest accrues during this time. Many lenders offer options to make interest payments while the student is in school.
Repayment Plans
Graduated, extended, or income-based plans may be available to qualified borrowers.
None
None
Graduated and extended repayment options
Graduated, extended, or income-based plans may be available to qualified borrowers.
Discretionary programs available for troubled borrowers but are not part of the loan agreement.

Cosigner /
endorser option

N/A
N/A
N/A
YES
YES
Most private lenders require a cosigner for freshmen. A cosigner may result in a better interest rate. Check with your lender.
Cosigner /
endorser release
N/A
N/A
N/A
NO
NO
Some after 1 year - Check with your lender.
Tax deductible interest
YES
YES (subject to IRS guidelines)
YES (subject to IRS guidelines)
YES - parent can take tax deduction (subject to IRS guidelines)
YES
Generally, YES - the student can take the tax deduction (subject to IRS guidelines). Restrictions apply to loans for less than half-time enrollment.
Ability to consolidate
YES - Up to 25 years

Perkins: YES (but borrower must include at least one Direct Loan or Federal Family Education Loan (FFEL) Program loan in the Direct Consolidation Loan; note that benefits specific to Perkins Loans will be lost, though.)

Purdue Loan: NO

YES (but borrower must include at least one Direct Loan or Federal Family Education Loan (FFEL) Program loan in the Direct Consolidation Loan)
YES - Up to 25 years
YES - Up to 25 years
Check with your lender.
How to apply
Accept on myPurdue
Accept on myPurdue
Accept on myPurdue

Accept on myPurdue and www.student
loans.gov

Lender website