STAFFORD LOAN
Unsubsidized Stafford Loan

The Unsubsidized Stafford Loan is offered to undergraduate students attending or planning to attend an approved post-secondary Title IV institution.  The Unsubsidized Stafford Loan is part of the Direct Loan Program and is administered through the Department of Education.  Colleges and universities must participate in the Direct Loan Program in order for their students to be eligible to receive federal funding. 

Students must complete and submit the FAFSA Application in order to apply for an Unsubsidized Stafford Loan.  The FAFSA, which stands for Free Application for Federal Student Aid, uses the prospective applicant’s current financial information and family background to determine if the student qualifies for an Unsubsidized Stafford Loan.
Students do not need to show a financial need in order to receive an Unsubsidized Stafford Loan.  If a student completes the FAFSA and is enrolled in a qualified educational program then they can receive an Unsubsidized Stafford loan.

The school’s financial aid office will subtract the total amount receiving in other financial aid from the cost of attendance to determine whether a student is eligible for an unsubsidized loan. Unlike a subsidized loan, students are responsible for the interest from the time the unsubsidized loan is disbursed until it's paid in full. Student’s have the option to pay the interest or allow it to accrue (accumulate) and be capitalized (added to the principal amount of the loan). Capitalizing the interest will increase the amount students have to repay.

Once a student receives notice that they qualify, they must complete a promissory note. A promissory note is a binding legal document that lists the borrowing conditions and terms under which the student agrees to repay the loan.
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:  $5,500 - if you're a first-year student enrolled in a program of study that is at least a full academic year. 

Year 2:  $6,500 - 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: $7,500 - 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 not be greater than $31,000. 

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

Year 1:  $9,500 - if you're a first-year student enrolled in a program of study that is at least a full academic year. 

Year 2:  $10,500 - 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: $12,500 - 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 not be greater than $57,500. 

As you can see, an Unsubsidized Stafford Loan is a great option for students wanting extra funding to pay for their education.  This is not a low-income loan, so any student can apply for this type of student loan. 

Students borrowing an Unsubsidized Stafford Loan will be paid through their school’s financial aid office in at least two installments. No installment may exceed one-half of their loan amounts. The student’s loan money must first be applied to pay for tuition and fees, room and board, and other school related fees. If loan money remains, they’ll receive the funds by check or direct deposit, 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 student loan to repay if they don't begin their classes or if they withdraw during the first 30 days of classes.





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