Federal Stafford Loans – The First Loans Received

These loans are federally based with low interest rates. Repayment is differed until the student graduates or is not enrolled in classes full time for one consecutive semester. This is the first loan type offered to you.

A student must accept the full amount of these loans before the Graduate Plus Loans can be applied for. The loan amount offered is calculated based on school tuition, room status, and a small percentage for living expenses. There are limits to how much money can be borrowed with Stafford Loans.

Graduate Student Loan Limits

• Subsidized Stafford loan limit of $8,500 for the school year.
• Unsubsidized Stafford loan limit of up to $12,000 for the school year.
• Lifetime Stafford loan limit of $138,500, which includes all subsidized and unsubsidized graduate and undergraduate loans.
• Generally out-of-state students are eligible to receive the maximum annual loan limit.

STUDENTS MAY NOT QUALIFY FOR THE FULL AMOUNTS LISTED ABOVE.

What does it mean when a loan is Subsidized or Unsubsidized?

The Federal Stafford Loan will come in two distinctive amounts:

• A smaller amount will be called your Subsidized loan. This just means that the loan will not accrue interest during the time you are in school.
• The larger amount will be Unsubsidized which means that while you’re in school the loan will be accruing interest.

*Some students only need the subsidized loan to pay for school. Your school’s financial aid office will inform you of the amount of aid that has been awarded to you. You then decide whether to accept the entire awarded amount or just the amount you need.

Graduate plus Loans – The second source of federal loans

You must fill out a separate application for this loan. Applications can be found in your school’s Financial Aid Office. These loans are the only way to borrow above the set yearly limit unless private loans are used. These loans also have a low interest rate and repayment does not begin until the student graduates or is not enrolled in classes full time for one consecutive semester.

Remember these loans need to be applied for separately and they are based on your credit record. Keep this in mind when you are applying!

Private Loans – The third source of loan aid

These loans are provided through individual financial institutions and are not backed by the federal government. These private institutions control both the interest rates and when the loan must be repaid. These interest rates can change drastically so be careful when using this type of resource.

Remember if you need a private loan, talk to your school’s Financial Aid Office about preferred lenders. These are a group of private lenders who frequently deal directly with your school to provide students loans.

Related Posts:

1. More Info About Loans
2. Budgeting Before and During School
3. Why Student Loans Are A Huge Scam
4. Completing Your FAFSA
5. How Do I Stay Eligible For Federal Loans?