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stafford

Federal Stafford (Student) Loan Program

A Federal Stafford Loan is a low-interest student loan funded by the federal government through the Federal Direct Lending program. This is the largest federal financial aid program, and is made up of both Subsidized and Unsubsidized loan components. To apply, the first step is to complete the FAFSA. Your maximum loan amount depends on your FAFSA dependency status, your grade level (the cumulative number of credit hours you've earned) for the specific loan period for which you're borrowing (see the chart below), and the total amount of scholarship, grant, and other assistance you're receiving for the loan period. A credit check is not required for a student to be approved for Federal Stafford Loan Funds.

Subsidized Stafford Loan aid is awarded in accordance with your calculated financial need. No interest is charged, no repayment of principal or interest is required, and no interest accrues during the time you're enrolled at least half-time. You’re required to begin repayment of your Subsidized Stafford Loan six months after graduating or dropping below half-time enrollment status. Please be advised that graduate students are not permitted to receive Subsidized Stafford Loan funds, even though (s)he may have a high level of financial need.

Please note: For all first-time borrowers who receive a loan on or after July 1, 2013 a 150% limitation is in effect. Example: If you are in a 4-year degree program, you will be allowed to borrow Subsidized Stafford loans for 6 years. In addition, if you reach your 150% limit, all of the Subsidized Stafford Loans that you have borrowed will begin accruing interest, like Unsubsidized Stafford Loans, even if you are still enrolled in classes. Students who reach the 150% Subsidized Stafford Loan limit could still receive Unsubsidized Stafford Loans as long as they meet other eligibility requirements. For more information please click on the following PDF.

Unsubsidized Stafford Loan aid may be offered to you regardless of your financial need, although the FAFSA must still be completed and submitted. No repayment of the loan principal is required while you're enrolled at least half-time. However, interest starts accruing once the loan is disbursed. The interest may be allowed to accrue and then be added to the loan principal (this is referred to as capitalization). However, many students wisely elect to pay the accrued interest on a quarterly basis in order to eliminate or reduce the effect of compounding.

Students frequently receive a combination of Subsidized and Unsubsidized Stafford Loan funds in their financial aid packages.

 

Federal Direct Student Loans Interest Rates

Loan Type

Student Grade Level

Cohort

Index Rate

Add-On

Fixed Interest Rate

Interest Rate Cap

First Disbursed On/After

First Disbursed Before

10-Year Treasury Note Index

Direct Subsidized Loans

Undergraduate Students

7/1/13

7/1/14

1.81%

2.05%

3.86%

8.25%

7/1/14

7/1/15

2.61%

2.05%

4.66%

8.25%

Direct Unsubsidized Loans

Undergraduate Students

7/1/13

7/1/14

1.81%

2.05%

3.86%

8.25%

7/1/14

7/1/15

2.61%

2.05%

4.66%

8.25%

Direct Unsubsidized Loans

Graduate/Professional Students

7/1/13

7/1/14

1.81%

3.60%

5.41%

9.50%

7/1/14

7/1/15

2.61%

3.60%

6.21%

9.50%

 

 

Maximum Annual Stafford Loan Amounts

Grade Level

Dependent Undergraduate

 

Independent Undergraduate

Freshman
(0-29 total earned credit hours)

$5500
(of which $3500 may be in Subsidized funds)

$9500
(of which $3500 may be in Subsidized funds)

Sophomore
(30-59 total earned credit hours)

$6500
(of which $4500 may be in Subsidized funds)

$10,500
(of which $4500 may be in Subsidized funds)

Junior
(60-89 total earned credit hours)

$7500
(of which $5500 may be in Subsidized loan funds)

$12,500
(of which $5500 may be in Subsidized funds)

Senior
(90 or more total earned credit hours)

$7500
(of which $5500 may be in Subsidized funds)

$12,500
(of which $5500 may be in Subsidized funds)

Graduate
(Masters or Education Specialist)

N/A

A graduate student fully admitted to a UCM masters or education specialist degree program may be considered for up to $20,500 in Unsubsidized Stafford Loan funds. However, the total amount borrowed may not exceed the student's assigned Cost of Attendance at the University of Central Missouri (less all other aid received for the borrower's loan period).

Detailed information about the Federal Stafford Loan program is available here.