The Federal Stafford Loan is available through the Federal Family Educational Loan Program (FFELP) to help both undergraduate and graduate students pay for their education.
There are two types of Stafford Loans--subsidized and unsubsidized.
Eligibility for subsidized loans is based on financial need as determined by federal guidelines. A loan is called "subsidized" because the government pays interest for the student during:
- At least half-time enrollment in school
- The six-month grace period after the student ceases attendance on at least a half-time basis.
This loan is available to students regardless of income or need. With an unsubsidized loan, you are responsible for all interest that accrues during in-school, grace and deferment periods. You may choose to pay the interest portion only while in school, which would keep your loan balance at principal. If you choose to defer such payments, the interest will be capitalized, resulting in an increase in both total debt and the amount of monthly payments.
- The interest rate is fixed at 6.8% for unsubsidized and 5.6% for subsidized Stafford loans.
- It carries low origination and guarantee fees. Many other loans have significantly higher fees.
- Repayment of the loan does not begin until you graduate or drop below half-time status.
- In cases of economic hardship, payments may be deferred, extended, or reduced.
- The loan is forgiven in case of permanent disability or death.
Loans are usually issued for a single academic year, and both eligibility and amount are redetermined annually throughout your academic career.
Your Stafford loan eligibility is determined by the Office of Financial Aid and is based on information you provided in the Free Application for Federal Student Aid (FAFSA).
Federal criteria include:
- Enrollment in an eligible school at least half-time in a degree program
- U.S. citizenship, permanent residency, or eligible noncitizen status
- Satisfactory academic progress (as determined by the Office of Financial Aid)
- No unresolved defaults or overpayments owed on Title IV educational loans and grants
- Satisfaction of all Selective Service Act requirements
Borrowing limits are based on your dependency status and year in school. You are considered independent if you:
- were born before January 1, 1986; or
- will be working on a degree beyond a bachelor's degree during the school year; or
- you are married when the Free Application for Federal Student Aid (FAFSA) is filled;
- have children who receive more than half of their support from you; or
- have dependents (other than your children or spouse ) who live with you and receive more than half of their support from you, now and through June 30, 2009; or
- are an orphan or ward of the court or were a ward of the court until age 18; or
- are a veteran of the U.S. Armed Forces
If you do not meet any of the above criteria, you are considered a dependent student for financial aid purposes.
You can never borrow more than the cost of education, less other financial aid received (special rules apply for recipients of Montgomery Chapter 30 VA benefits and Americorps benefits). Below are the maximum amounts you may borrow.
Federal Stafford Loan limits are as follows:
If dependent, your combined subsidized and unsubsidized Stafford annual eligibility is as follows:
|
Freshman |
Sophomore |
Junior |
Senior |
| Maximum Subsidized |
$3,500 |
$4,500 |
$5,500 |
$5,500 |
| Unsubsidized |
$2,000 |
$2,000 |
$2,000 |
$2,000 |
| Total |
$5,500 |
$6,500 |
$7,500 |
$7,500 |
If independent, your subsidized and unsubsidized Stafford annual eligibility is as follows:
|
Freshman |
Sophomore |
Junior |
Senior |
| Maximum Subsidized |
$3,500 |
$4,500 |
$5,500 |
$5,500 |
| Unsubsidized |
$6,000 |
$6,000 |
$7,000 |
$7,000 |
| Total |
$9,500 |
$10,500 |
$12,500 |
$12,500 |
The cumulative maximum amount that may be borrowed as dependent undergraduate is $31,000 ($23,000 maximum subsidized) and for an independent is $57,500 ($23,000 maximum subsidized).
The interest rate is fixed at 6.8% for unsubsidized and 5.6% for subsidized Stafford loans.
The student can be required to pay fees of up to 1.5% of the principal of the loan. This can include an origination fee of up to 0.50%, charged by the federal government, plus a federal default fee of up to 1%, charged by the guarantee agency. These fees are deducted from the principal at each disbursement.
| Loan amount |
$4,000 |
| Total fees (1.5%) |
$60 |
| Amount disbursed Fall |
$1970 |
| Amount disbursed Spring |
$1970 |
Here's a step-by-step guide to the Stafford application process:
- Complete a Free Application for Federal Student Aid (FAFSA) application online at the Department of Education's website http://fafsa.ed.gov.
- Once your FAFSA is processed, you will receive a Student Aid Report (SAR) documenting your financial resources and expected family contribution towards educational costs. An electronic copy will be sent to the Office of Financial Aid of the school listed on your application. The University of Mississippi's school code is 002440.
- Check your SAR for accuracy. If there are errors, follow the correction process indicated on the SAR or as instructed by the Office of Financial Aid.
- From the information obtained in the SAR and other supporting documents, we will generate an online Financial Aid Award Notification documenting the financial aid available to you including Stafford Loan eligibility.
- The student may accept all or a part of the aid and indicate his/her choice of lender by accepting and confirming the Financial Aid Award Notification online.
- The student must complete Loan Entrance Counseling on the Web.
- Once the Financial Aid Award Notification has been accepted and submitted and Loan Entrance Counseling has been completed, you may sign your school-certified Stafford Loan application/Promissory Note online. You will not need to e-sign a new Master Promissory Note if one is already on file with your lender.
- You will receive a Notice of Guarantee and Disclosure Statement. This is your notice of loan approval, and it contains essential information about the terms and conditions of your loan. It also tells you the amount of your loan and an estimated date for the arrival of funds.
An Electronic Funds Transfer (EFT) will be sent directly to our school. The amount of the proceeds will be the loan amount less the fees. Funds will credit first to your Bursar bill and any excess funds will be mailed to your permanent address or directly deposited to your personal account.
