STAFFORD LOAN
Subsidized Stafford Loan

The Subsidized Stafford Loan is offered to undergraduate students attending or planning to attend an approved post-secondary Title IV institution.  The Subsidized Stafford Loan is part of the Direct Loan Program and is administered through the Department of Education.  All schools receiving federal student aid participate in the Federal Direct Loan Program.

Students must complete and submit the FAFSA in order to apply for a Subsidized Stafford Loan.  The FAFSA, which stands for Free Application for Federal Student Aid, uses the prospective applicantís current financial information and family background to determine if the student qualifies for a Subsidized Stafford Loan.  The FAFSA application is the only form that needs to be submitted in order to be eligible for a Subsidized Stafford Loan.  
Students eligible for a Subsidized Stafford Loan must complete the promissory note and submit to your schools financial aid office.  The promissory note is a binding legal document that lists the borrowing conditions and terms under which the student agrees to repay the loan.  Students must adhere to the conditions and terms in order to continue to receive their student aid.

The Subsidized Stafford loan is based on a studentís financial need.  If a student is eligible for a subsidized loan, the government will pay (subsidize) the interest on the loan while the student is in school, six months after, and if payment deferment is approved.  Depending on the studentís financial need, they may borrow subsidized money for an amount up to the annual loan borrowing limit for their level of study.

Students can receive a subsidized loan and an unsubsidized loan for the same enrollment period as long as they don't exceed the annual loan limits. 
Dependent Undergraduate students (except students whose parents are unable to obtain PLUS Loans) each year can borrow up to:

Year 1:  No More than $3,500 - if you're a first-year student enrolled in a program of study that is at least a full academic year. 

Year 2:  No More than $4,500 - if you've completed your first year of study and the remainder of your program is at least a full academic year. 

Year 3 and Beyond: No More than $5,500 - if you've completed two years of study and the remainder of your program is at least a full academic year.

The total Maximum Debt from Stafford Loans when you graduate can no more than $23,000 in subsidized loans.

Independent undergraduate students (and dependent students whose parents are unable to obtain PLUS Loans) each year can borrow up to:

Year 1:  No More than $3,500 - if you're a first-year student enrolled in a program of study that is at least a full academic year. 

Year 2:  No More than $4,500 - if you've completed your first year of study and the remainder of your program is at least a full academic year. 

Year 3 and Beyond: No More than $5,500 - if you've completed two years of study and the remainder of your program is at least a full academic year.

The total Maximum Debt from Stafford Loans when you graduate can no more than $23,000 in subsidized loans.

Students will be paid through their schoolís financial aid office in at least two installments. No installment may exceed one-half of their loan amounts. The studentís loan money must first be applied to pay for tuition and fees, room and board, and other school charges. If loan money remains, theyíll receive the funds by check or in cash, unless they give the school written authorization to hold the funds until later in the enrollment period.

Generally, if a student is a first-year undergraduate student and a first-time borrower, their school cannot disburse their first payment until 30 days after the first day of their enrollment period. This practice ensures they won't have a loan to repay if you don't begin classes or if they withdraw during the first 30 days of classes.





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