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Federal Stafford Loans

Stafford Loans are processed through the U.S. Department of Education and are funded by the U.S. Treasury. This ensures that the borrower will have a reliable and predictable source of funding.

Steps

  • File the Free Application for Federal Student Aid (FAFSA) for the current year at www.fafsa.gov. If eligible, Stafford loans will automatically be processed for students who have completed a FAFSA.
  • [OPTIONAL] Reduce or decline Stafford Loan amounts online prior to disbursement at myCSUB in order to avoid borrowing maximum eligibility.
  • Complete a Stafford Master Promissory Note (MPN) and Entrance Counseling at Direct Loans if not already on file.
    • The MPN is a promissory note that can be used to make one or more loans for one or more academic years (up to 10 years). The MPN is your legal signature for the loan.
    • Before receiving a student loan, borrowers must also complete an entrance counseling session. This quick and easy interactive counseling session provides useful tips and tools to help you develop a budget for managing your educational expenses and helps you to understand your loan responsibilities.
  • Complete the FAFSA and clear any holds that they may have on their financial aid accounts well in advance of the end of the term to ensure adequate processing time.
  • Prior to graduating or leaving school, Direct Loan borrowers must also complete exit counseling. Exit Counseling will explain your rights and responsibilities as a Direct Loan borrower.

Federal Direct Stafford Loans cannot be processed after the final day of the term for which the student was enrolled.

Types of Stafford Loans

There are two types of Stafford Loans: Subsidized and Unsubsidized

Subsidized Loans

This loan is designed to meet the calculated need of students (up to the maximum allowed at each grade level). For SUBSIDIZED Direct Loans, there is no interest charged as long as the student is continuously enrolled on at least a half-time basis (except for summers). Repayment, including interest, begins six months after a student is no longer enrolled on at least a half-time basis. The current fixed interest rate is [Rate].

Unsubsidized Loans

For students who are not able to show need according to the required need analysis calculation, or where the calculated need for a subsidized loan is less than the maximum that is allowed for the student's grade level, students may apply for an UNSUBSIDIZED Direct Loan. Students who are receiving unsubsidized loans will be billed monthly or quarterly for the interest, beginning within sixty days of the first disbursement of the loan. The student may defer the interest until graduation. Full repayment (not just interest) begins within sixty days after the student drops below half-time. The current fixed interest rate is [Rate].

Eligibility

Applicants must be:

  • an undergraduate, graduate, or professional student enrolled at least half time as a degree-seeking student.
  • a U.S. citizen, U.S. national or eligible non-citizen of the United States.
  • not in default on a Federal education loan or owe a repayment of Federal Title IV aid.
  • in compliance Satisfactory Academic progress standards.
  • below Federal borrowing aggregate limits.

Accepting / Declining or Reducing your Loan

Once you are awarded a Stafford Loan, you will need to:

Details

For Stafford Subsidized Loans disbursed between:

  • The current fixed interest rate is [Rate] and begins accruing after you either graduate or drop below half-time enrollment, whichever occurs first.
  • Interest rates are subject to change July 1 of each year.
  • An Origination Fee of 1.0% is assessed to all borrowers by the Direct Loan Servicer.

For Stafford Unsubsidized Loans,

  • The current interest rate is [Rate] and begins accruing while you are enrolled;
  • Interest rates are subject to change July 1 of each year.
  • An Origination Fee of 1.0% is assessed to all borrowers by the Direct Loan Servicer.

Repayment

Repayment does not begin until six months after students either graduate or drop below half-time enrollment, whichever occurs first. At the time a student graduates or drops below halftime enrollment they will also need to complete Exit Counseling.

For questions about payment plans, a complete listing of deferment options and Direct Loan repayment options, please contact the Direct Loan Servicer at1-800-848-0979 or online at https://www.dl.ed.gov.  Students may monitor their loan borrowing online through the National Student Loan Database ( NSLDS) at http://www.nslds.ed.gov.

The information provided at Student Aid describes the new Income Based Repayment (IBR) Plan for federal student loans. It includes the IBR eligibility requirements, the benefits of IBR, an IBR payment calculator, and some examples of how a borrower's monthly student loan payment amount can be reduced under IBR.

Annual Federal Stafford Loan Aggregate Borrowing Limits
Class Level Dependent Student - Base Amount (Subsidized and/or Unsubsidized) Dependent Student - Additional Unsubsidized Independent Student - Base Amount (Subsidized and/or Unsubsidized) Independent Student - Additional Unsubsidized
Freshman (0 to 44 units) $3,500 $2,000 $3,500 $6,000
Sophomore (45 to 89 units) $4,500 $2,000 $4,500 $6,000
Junior & Senior (90 + units) $5,500 $2,000 $5,500 $7,000
Teacher Credential $5,500 $2,000 $5,500 $7,000
Graduate / Doctorate n/a n/a $8,500 $12,000
Lifetime Federal Stafford Loan Aggregate Borrowing Limits
Program Level Dependent Independent
Undergraduate $31,000 (no more than $23,000 may be in Subsidized Loans) $57,500 (no more than $23,000 may be in Subsidized Loans)
Teacher Credential $31,000 (no more than $23,000 may be in Subsidized Loans) $57,500 (no more than $23,000 may be in Subsidized Loans)
Graduate / Doctorate n/a $138,500 (no more than $65,500 may be in Subsidized Loans)

For more information on student loans, please refer to Funding Education Beyond High School: The Guide to Federal Student Aid from the U.S. Department of Education for more information on federal loans at http://studentaid.ed.gov/students/publications/student_guide/index.html

Repayment Calculator and interest Rates

This Federal Department of Education link provides a budget calculator, current interest rate information, and repayment options available to assist you in managing your student loan borrowing.