Federal Stafford Student Loan
The Federal Subsidized and Unsubsidized Stafford Loans, part of the Federal Family Education Loan Program, are low-interest loans designed to provide students with additional funds to finance their college education. These loans are a type of federal financial aid that must be repaid.
Federal Subsidized Stafford Loans are based on financial need. The federal government pays the interest during in-school, grace and deferment periods.
Federal Unsubsidized Stafford Loans are not based on financial need. The federal government does not pay the interest for Federal Unsubsidized Stafford Loans. Students may choose to defer interest payments until repayment begins; however, the student is responsible for all interest accrued. The accrued interest is automatically capitalized into the loan principal.
These are common questions students have about the Federal Stafford Loan program:
- Who is eligible to apply?
- How do I apply for Federal Stafford Loans?
- How much can I borrow as an undergraduate student?
- How much can I borrow as a graduate or professional student?
- Why did I seem to receive less money than I actually borrowed?
- How often can I apply to borrow?
- What is the interest rate for Federal Stafford Student Loans?
- How many hours must I be enrolled to be eligible to borrow?
- How are "full-time" and "part-time" defined?
- When do I begin repaying my Federal Stafford Loan?
- Can I get a deferment on my repayment?
- How are Federal Stafford Loans disbursed?
- What happens if I drop classes or withdraw after receiving loan funds?
- Who will my lender be for Federal Stafford Loans?
Who is Eligible to Apply?
Full-time and part-time dependent or independent students may apply. The program is limited to U.S. citizens and permanent residents. Students must be enrolled in a degree-granting program. Non-degree students and guest students are ineligible for the Federal Stafford Loan Programs. Students in a second bachelor's degree program may borrow at undergraduate loan maximum limits.
How Do I Apply for Federal Stafford Loans?
All students interested in applying for a Federal Stafford Loan at George Mason University must first complete the Free Application for Federal Student Aid (FAFSA). Once George Mason University has received your financial information, we will send you an award letter which will indicate your eligibility for the Federal Subsidized Stafford Loan. You should complete all items on the award notification, indicate the amount that you want to borrow, if less than the amount offered; indicate how much, if any, Unsubsidized Stafford Loan you are interested in; and return the award notification to the Office of Student Financial Aid. Shortly thereafter, if you do not already have a Stafford Loan Master Promissory Note, you will be provided information on how to complete a Stafford Loan Master Promissory Note and how to select a lender online. Proceeds from your loan will be applied against your university charges. Should your current semester bill be paid from other sources, you will receive a refund in the amount of either your full loan proceeds or your loan proceeds less any charges owed.
How Much Can I Borrow as an Undergraduate?
Through a combination of Subsidized and Unsubsidized Stafford Loans, first year undergraduate students can borrow up to $5,500 per academic year; sophomores can borrow up to $6,500 per academic year, junior, seniors and fifth year undergraduates can borrow up to $7,500 per academic year. The basic cumulative undergraduate limit is $23,000.
Undergraduate students who are classified by the Department of Education as "independent" may be eligible to borrow additional funds under the Unsubsidized Stafford program. Independent freshmen and sophomores may be able to borrow up to an additional $4000 and independent juniors, seniors, and fifth year undergraduates may be able to borrow up to an additional $5000. The cumulative limit for this additional unsubsidized borrowing is $23,000.
How Much Can I Borrow as a Graduate or Professional Student?
Through a combination of basic Subsidized and Unsubsidized Stafford Loans, graduate and professional students can borrow up to $20,500 per academic year. The cumulative undergraduate and graduate limit, for subsidized loans is $65,000. Graduate and professional students may be eligible to borrow additional funds under the Unsubsidized Stafford Loan program. The cumulative limit for this additional unsubsidized borrowing is $73,000 and includes any "additional" unsubsidized borrowing as an independent undergraduate.
Beginning July 1, 2006, graduate and professional students who have used all their Stafford loan eligibility for the year are also eligible to apply for the GradPLUS loan to cover up to the cost of attendance less any other aid received.
Why Did I Seem to Receive Less Money than I Actually Borrowed?
The Federal government charges a guarantee fee against all loans that it guarantees which is equal to as much as 3% of the gross loan proceeds. This insurance fee is deducted proportionally from the loan proceeds before they are disbursed. Some lenders may absorb the cost of the fee and charge nothing to the student borrower.
How Often Can I Apply to Borrow?
Once you have received the maximum loan limit for your grade level you must wait until the beginning of the next academic year to be eligible for additional loan funds. You must be enrolled at least half-time during the period that the loan is to cover and be making satisfactory academic progress toward your degree as determined by George Mason University. Academic grade levels are determined as follows:
Undergraduate Students |
|
Credit Hours |
Academic Grade Level |
|---|---|
0-29 |
01 |
30-59 |
02 |
60-89 |
03 |
90-120 |
04 |
121+ |
05 |
Graduate/Professional Students |
|
Credit Hours |
Academic Level |
|---|---|
0-18 |
06 |
19-36 |
07 |
38-54 |
08 |
55-72 |
09 |
What is the Interest Rate for Federal Stafford Student Loans?
Prior to the 2006-2007 school year, the interest rate on new Federal Stafford Loans was variable and was adjusted each July. For these loans, the interest rate will not exceed 8.25%. The current applicable interest rate will be shown on your loan promissory note/disclosure statement.
For undergraduate Subsidized Stafford loans the fixed interest rate for loans will change yearly between 2008 and 2012 based on the date of initial disbursement as follows:
Undergraduate Subsidized Stafford Loan First Disbursement Timing |
Fixed Interest Rate Applied |
|---|---|
| on or after July 1, 2006 and before June 30, 2008 | 6.8% |
| on or after July 1, 2008 and before June 30, 2009 | 6.0% |
| on or after July 1, 2009 and before June 30, 2010 | 5.6% |
| on or after July 1, 2010 and before June 30, 2011 | 4.5% |
| on or after July 1, 2011 and before June 30, 2012 | 3.4% |
| on or after July 1, 2012 | 6.8% |
How Many Hours Must I Be Enrolled to Receive My Loan and Maintain Eligibility to Borrow?
If you apply for a Federal Stafford Loan as a full-time student, you should attend full-time for the entire loan period. If you apply for a Federal Stafford Loan as a part-time student, you should attend a least part-time for the entire loan period. You must be enrolled for a minimum of six credit hours each semester as an undergraduate or a minimum of 4.5 credit hours each semester as a graduate or professional student to be eligible to borrow for that semester. Failure to enroll as indicated on your award notification may result in the reduction or cancellation of your loan.
The Definitions for Full-Time and Part-Time are as Follows
Undergraduate Students |
|
Credit Hours |
Eligibility Status |
|---|---|
1-5 |
not eligible with exception of Pell |
6-8 |
eligible at half-time level |
9-11 |
eligible at three-quarter time level |
12+ |
eligible at full-time level |
Graduate/Professional Students |
|
Credit Hours |
Eligibility Status |
|---|---|
0-4 |
not eligible |
4.5-5.5 |
eligible at half-time level |
6-8 |
eligible at three-quarter time level |
9+ |
eligible at full-time level |
Less than full-time enrollment in any term or semester requires budget adjustments be made to tuition, fees, books and supplies.
When Do I Pay Back My Federal Stafford Loan?
You begin repaying your loan six months after you graduate, leave school, or drop below half-time enrollment status. The actual length of the repayment period and monthly payment depends on the amount of the loan you owe, the interest rate, and the loan repayment option selected.
Federal Unsubsidized Stafford Loan borrowers, if deferring interest, will have their interest capitalized into the loan principal while in school and through the end of the grace period.
Can I Get a Deferment on Payment?
Payment may be deferred if the borrower enters into a deferrable situation and requests deferment of payments by submitting the appropriate documentation to the Stafford Loan lender or servicer. Deferrable situations include but are not limited to:
- At least half-time study at a postsecondary institution.
- Study in an approved graduate or postgraduate fellowship supported program.
- Study in an approved rehabilitation training program for the disabled.
- Unable to find full-time employment.
- Economic hardship.
- For more information about loan deferments, contact the lender or servicer for your Stafford Loan(s).
How are Federal Stafford Funds Disbursed to the Student?
Federal Stafford Loan funds are posted to the student's account within three days of receipt from the loan servicer. Loan funds are generally disbursed in two parts (e.g. one disbursement in fall and one disbursement in spring for a full-year loan). All first time borrowers must complete an Entrance Counseling and a Master Promissory Note, which can be done online, before loan funds can be disbursed to the student. Students must be enrolled at least half-time before funds will be disbursed.
What Happens If I pay for My Classes with a Federal Stafford Loan and I Later Drop Classes During the Refund Period or Withdraw After the Refund Period
If you pay for your classes with a Federal Stafford loan and during the drop period you reduce the number of credit hours below full-time, any refund due from the reduction in your charges may go to repay your loan. The refund would reduce your loan debt by the refunded amount. You should contact Student Accounts if you think you are due a refund.
If you pay for your classes with a Federal Stafford loan and then withdraw from all of your classes, a Return to Title IV Funds refund calculation will be performed to determine what portion of your financial aid received was actually earned. You may be required to repay to the school all or a part of the aid that you received prior to withdrawing. The Department of Education would be notified that you have dropped below half-time or have left school and your six month grace period for repayment would begin immediately.
Who Will Be My Federal Stafford Loan Lender?
Your lender for the Federal Subsidized and Unsubsidized Stafford Loans will be the lender that you choose at the time you complete your Stafford Loan Master Promissory Note.