Federal Stafford Loans
Federal Stafford Loan Benefits*
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2% Interest Rate Reduction for Stafford borrowers who make 48 consecutive, scheduled payments on time.
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0.25% Interest Rate Reduction for enrolling in an auto-debit payment program.
The Federal Stafford Loan program was developed by the Department of Education to provide easy access to low-cost loans to ensure everyone has an opportunity to receive a college education. Federal Stafford Loans feature attractive repayment benefits, low interest rates and flexible payment options.
Federal Stafford Loan Eligibility
The Stafford Loan is available to you if you are:
• Currently enrolled in a college or university at least half time, as determined by the school.
• A U.S. citizen or eligible resident.
• Are meeting your school’s requirements for Satisfactory Academic Progress.
• Have no unresolved defaults on federal education loans.
Federal Stafford Loan Terms
Stafford Loans are issued in two forms:
Subsidized Stafford Loan
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This is a need-based loan. Eligibility is based on the information you provide on the Free Application for Federal Student Aid (FAFSA).
• The federal government pays the interest on your Subsidized Stafford loan that accrues while: 1) you are in school; 2) during your six-month grace period after finishing school; and 3) during periods of approved deferment.
• You must complete and file the FAFSA with the Department of Education in order to be considered for this loan (we handle this process for you).
Unsubsidized Stafford Loan
• Unsubsidized Stafford loans are available to you regardless of financial need.
• You can make interest payments on this loan while in school and in grace, or you can defer these interest payments. If you choose to defer these payments, the accrued interest will be capitalized (added to your original loan amount), resulting in a higher cost of interest over the life of the loan.
• You must complete and file the FAFSA with the Department of Education in order to be considered for this loan (we handle this process for you).
Stafford Loan Disbursement
Your lender will send ALL funds directly to your school. In most cases, your loan will be disbursed in at least two installments, and no installment will be greater than half the amount of your loan. Your loan money must first be used to pay your tuition, fees, room and board. If loan money remains, you will receive the remaining funds from your school, unless you give the school written permission to hold the funds until later in the enrollment period.
At some schools, loan disbursement for first-year undergraduate students and first-time borrowers cannot be disbursed until 30 days after the first day of your enrollment period. This gives you the opportunity to withdraw from classes before loan funds are disbursed. Please ask your school Financial Aid officer for details on their particular disbursement policies.
Canceling a Stafford Loan
You may cancel your Subsidized and Unsubsidized Stafford loan(s), or a portion of it, if you inform your school within 14 days of the date that the loan is credited to your account. Or, if you receive Stafford Loan funds directly by check, you may refuse the funds by not endorsing the check with your school’s Financial Aid office.
Borrowing Limits
If your current Federal Income Tax status is as “a dependent”, undergraduate student loan limits per year are:
$2,625 Freshman
$3,500 Sophomore
$5,500 Junior and Senior
If you are an independent, undergraduate student, or if you are a dependent, undergraduate student and your parents are unable to get a PLUS Loan, your loan limits per year are:
Subsidized Limit Additional Unsubsidized Limit
$2,625 $4,000 Freshman
$3,500 $4,000 Sophomore
$5,500 $5,000 Junior & Senior
Graduate students may borrow:
Subsidized Limit Additional Unsubsidized Limit
$8,500 $10,000
Aggregate Borrowing Limits
Below are your aggregate, total borrowing limits for all Stafford Loans:
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$23,000 if you are a dependent, undergraduate student.
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$46,000 if you are an independent, undergraduate student.
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$138,500 if you are a graduate or professional student. This includes Stafford Loans that you have received for undergraduate studies.
How To Apply For A Federal Stafford Loan
Academic Financial Solutions makes it easy to apply for a Stafford Loan. Just call us 1-866-416-6333. You can also apply by clicking the button below.
Federal Stafford Loan Rates, Fees, and Benefits
Interest Rates
For the 2005/2006 school year, the Stafford Loan interest rates are set at 5.30% in repayment and 4.70% in grace.
Stafford Loans are simple-interest loans with variable interest rates.
In repayment, the variable interest rate is calculated annually by adding 2.3% to the 91-Day Treasury bill.
While in school, grace or deferment, the variable interest rate is calculated annually by adding 1.7% to the 91-Day Treasury bill.
The interest rate is capped at 8.25% simple interest for the life of the loan.
Available Discounts:
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2% Interest Rate Reduction for Stafford borrowers who make 48 consecutive, scheduled payments on time.
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0.25% Interest Rate Reduction for enrolling in an auto-debit payment program.
Fees
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Federal Stafford Loans are typically subject to a 3.00% origination fee and a 1.00% guarantee fee that is added onto the original loan amount once the loan is disbursed.
Benefits offered by Academic Financial Solutions
Personal Loan Specialists can be assigned to you and your family to identify your funding needs, compare your financial options and assist you with the application process. There is no charge for this consultation.
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Our Loan Specialists are available Toll Free for your convenience at
1-866-416-6333.
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Our AFS Simple Solutions® eliminates phone tag and resolves matters quickly.
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2% Interest Rate Reduction for Stafford borrowers who make 48 consecutive, scheduled payments on time.
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0.25% Interest Rate Reduction for enrolling in an auto-debit payment program
Federal Stafford Loan Repayment
After you finish school or drop below half-time status, there is a six-month grace period during which you will not be required to make payments on your student loans. (you can begin repaying your Stafford Loans at any time with no pre-payment penalty)
Before leaving school, a representative should schedule an Exit Interview Counseling session with you (for more information on this, please contact your School’s Financial Aid Office). Exit counseling provides you with information on current interest rates, repayment rights and responsibilities and other important loan facts. In order to maximize you explore Consolidating your Stafford loans at a lower interest rate subsidized by the Department of Education. For more information on Student Loan Consolidation, click here.
Federal Stafford Loan Deferment and Forbearance
Based on your individual, unique circumstances, your Federal Stafford Loan payments can be reduced or suspended for a determined amount of time. While in deferment, your payments are temporarily postponed. Interest payments are required for unsubsidized Stafford Loans, but not for subsidized.
If for any reason you are temporarily unable to remain current with your loan repayment schedule, but are ineligible for a deferment, you can apply to receive forbearance on your loan for a specified time period. During forbearance:
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payments are postponed or reduced; and
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all borrowers are responsible for the interest that accrues during the forbearance period.
Deferment and forbearance is not automatic; it is subject to the approval of your lender. You should continue to make your loan payments until a request for deferment or forbearance is granted.
*Academic Financial Solutions reserves the right to modify, extend or discontinue offering these benefits at any time without notice. Borrower benefits will terminate in the event of default or failure to meet qualification criteria. Additional terms and conditions apply; please contact Academic Financial Solutions for details.
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