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Federal Student Loan Terms and Conditions

Federal Stafford Loan

Federal Stafford loans carry a low, fixed-interest rate set by the federal government.

Eligibility

  • Borrower must be matriculated and enrolled at least half time as an undergraduate, graduate or professional student.

  • Borrower must be a citizen of the United States or eligible noncitizen.

  • Borrower must have no unresolved defaults on federal student loans or owe a repayment of federal funds.

  • Borrower must maintain good academic standing.

Interest Rates

Interest rates for federal direct loans disbursed between July 1, 2014 and June 30, 2015:

  • undergraduate subsidized direct loans fixed at 4.66 percent

  • undergraduate unsubsidized direct loans fixed at 4.66 percent

  • graduate students are no longer eligible for subsidized loans per federal regulations

  • graduate unsubsidized direct loans fixed at 6.21 percent.

Interest rates for federal direct loans disbursed between July 1, 2015 and June 30, 2016:

  • undergraduate subsidized direct loans fixed at 4.29 percent

  • undergraduate unsubsidized direct loans fixed at 4.29 percent

  • graduate students are no longer eligible for subsidized loans per federal regulations

  • graduate unsubsidized direct loans fixed at 5.84 percent.

Benefits

  • interest may be tax-deductible

  • no prepayment penalty

  • federal Stafford loans may be consolidated to benefit from one convenient payment and potentially lower monthly payments

  • while enrolled at least half time, the borrower may request an in-school deferment.

Types of Federal Stafford Loans

  • Subsidized Federal Stafford Loan

    • The federal government pays the interest on this type of Stafford Loan while you are in school and during the six-month grace period.

    • Eligibility is based on financial need as determined by the Free Application for Federal Student Aid (FAFSA).

  • Unsubsidized Federal Stafford Loan

    • Interest accrues from the date of disbursement.

    • No payments are required while you are in school. However, you may choose to make payments on this type of Stafford Loan while you are in school, during your six-month grace period following graduation, or as scheduled in special-deferment situations.

    • Eligibility is not based on financial need as determined by the FAFSA, but you must complete the FAFSA to be considered.

Payment

  • The first payment is expected six months after you graduate or stop attending at least half time. If you have problems making your payments, please contact your lender immediately for assistance in obtaining information on forbearance. If you re-enter school, you may obtain an in-school deferment on the federal Stafford loans.