Direct Stafford Loan
Yes. Before your loan money is disbursed (paid out), you may cancel all or part of the loan by notifying your school. After your loan money is disbursed, you may cancel all or part of your loan within certain timeframes. For details, refer to the Borrower’s Rights and Responsibilities Statement that accompanies your MPN.
You must complete the Free Application for Federal Aid (FAFSA) http://www.fafsa.ed.gov/. Once you are awarded loans, you must then complete a Direct Loan Stafford Master Promissory Note (MPN) and complete Entrance Counseling Interview.
Your monthly payment amount on a Direct Stafford Loan will vary depending on the repayment plan that you choose and how much you borrowed. You can obtain estimated monthly payment amounts for different debt levels or for other repayment plans by contacting the Direct Loan Servicing Center at www.studentloans.gov or 1-800-848-0979.
Once you are no longer enrolled at least half time in an eligible program, you will receive a 6-month grace period on your Direct Subsidized and Unsubsidized Loans during which you are not required to make loan payments. The government will no longer subsidize or pay the interest on behalf of students during the six month grace period after graduation or when students are no longer enrolled at least half-time. This is effective for new Direct Subsidized Loans disbursed on or after July 1, 2012. You must begin repayment at the end of your grace period.
- ·1st year undergraduate: $5500 maximum ($3500 subsidized; $2000 unsubsidized)
- ·2nd year undergraduate: $6500 maximum ($4500 subsidized; $2000 unsubsidized)
- ·3rd/4th year undergraduate: $7500 maximum ($5500 subsidized; $2000 unsubsidized) ·The total amount that can be borrowed as a dependent undergraduate is $23,000 subsidized and $8000 unsubsidized.
- ·1st year undergraduate: $9500 maximum ($3500 subsidized; $6000 unsubsidized)
- ·2nd year undergraduate: $10,500 maximum ($4500 subsidized; $6000 unsubsidized)
- ·3rd/4th year undergraduate: $12,500 maximum ($5500 subsidized; $7000 unsubsidized) ·The total amount that can be borrowed as a dependent undergraduate is $23,000 subsidized and $34,500 unsubsidized. ·Graduate/Professional: $20,500 unsubsidized ·For loans borrowed prior to July 1, 2012, the total amount borrowed as a graduate/professional student can not exceed $65,500 subsidized and $73,000 unsubsidized. The total borrowed between both loans can not exceed $138,500. Please note: Graduate and Professional students will NOT be eligible for Direct Subsidized Loans made for periods of enrollment (loan periods) beginning on or after July 1, 2012.
- · $31,000 for dependent undergraduate students excluding those whose parents are unable to borrow a PLUS Loan (no more than $23,000 may be subsidized)
- · $57,500 for independent undergraduate students and dependent undergraduates whose parents are unable to borrow a PLUS loan (no more than $23,000 may be subsidized)
- · $138,500 for graduate/professional students (no more than $65,500 may be subsidized). [Please note:] the government has eliminated eligibility for the Direct Subsidized loan for Graduate and Professional students made for periods of enrollment (loan periods) beginning on or after July 1, 2012.
- · You must have a high school diploma or GED certificate.
- · You must be enrolled at least half-time and be working toward a degree or certificate in an eligible program. · You must be a U.S. citizen or eligible noncitizen.
- · You must have a valid Social Security Number.
- · You must register with Selective Service if required.
- · You must not be in default on any federal education loans or owe an overpayment on a federal education grant.
- · You must maintain satisfactory academic progress once in school.
- · You must complete the Free Application for Federal Aid (FAFSA). http://www.fafsa.ed.gov
A subsidized Direct Stafford loan is a loan from the Department of Education to students who can demonstrate financial need. The interest for the subsidized loan is paid or subsidized by the Department of Education, while you are in school at least 1/2 time. The government has eliminated the subsidy during the six month grace period after graduation or when students are no longer enrolled at least half-time so that the student will incrue interest during this six month grace period. This is effective for new Direct Subsidized Loans disbursed on or after July 1, 2012.
An unsubsidized Direct Stafford Loan is a loan from the Department of Education for students not based on a demonstrated financial need. For an unsubsidized loan, the interest is not subsidized (paid) by the Department of Education. Instead, the interest accrues and from the point the loan is originated the student is responsible for paying the accrued interest. The student can pay the interest while in school or during a period of deferment or forbearance.
Entrance Counseling is an electronic document available on VISION that provides an overview of federal loans and information to help the student understand their rights and responsibilities regarding their loans. It is a federal requirement that a student read and complete the Entrance Counseling before the student’s loans will disburse.
You may view information on available repayment plans online by going to www.studentloans.gov and selecting Repayment Plans and Calculators.