Federal Stafford Loan

Some of this information is from the "Student Guide" published by the U.S. Department of Education.

The Federal Stafford Loan Program is a long-term repayable educational loan that offers low interest rates. It is the Department of Education's major form of self-help aid. Repayment is deferred until you graduate, withdraw, or drop below half-time status (does not include summer sessions). This loan program offers funds to students regardless of family income level. Federal Stafford Loans are either subsidized or unsubsidized. The results of the Free Application for Federal Student Aid (FAFSA) determine which type of loan you are eligible for.

You can keep track of your loan accumulations by using the federal NSLDS system.

What is the difference between an unsubsidized and subsidized Federal Stafford Loan?

Who can get a Federal Stafford Loan?

What are the Teach for Virginia and Care for Virginia Programs?

Enrollment and Satisfactory Academic Progress

How much can I borrow?

What's the interest rate charged on these loans?

Is there a charge for these loans?

How do I pay back the loan?

How do I apply for a FFEL Stafford Loan?

How can I find a lender?

How will I receive my Federal Stafford Loan?

Will I have an opportunity to cancel my loan after I apply?

When do I pay back these loans?

Is it ever possible to postpone repayment of my loan?

Can my loan be discharged (canceled)?

Repayment assistance

What is the difference between an unsubsidized and subsidized Federal Stafford Loan?

FFEL Stafford Loans are either subsidized or unsubsidized. A subsidized loan is awarded on the basis of financial need. You will not be charged any interest before you begin repayment or during authorized periods of deferment (postpone payment). The federal government "subsidizes" the interest during these periods. 

An unsubsidized loan is not awarded on the basis of need. You'll be charged interest from the time the loan is disbursed until it is paid in full. If you allow the interest to accumulate, it will be capitalized--that is, the interest will be added to the principal amount of your loan and additional interest will be based upon the higher amount. (You may estimate how much this costs per month by using this chart or find out how much you will pay when you begin repayment using the finaid calculator.) This will increase the amount you have to repay. If you choose to pay the interest as it accumulates, you'll repay less in the long run.

You can receive a subsidized loan and an unsubsidized loan for the same enrollment period. 

Who can get a Federal Stafford Loan? 

If you're a admitted degree seeking student enrolled in a program of study at least half time, you may receive a Federal Stafford Loan. You must also meet other general eligibility requirements (Undergraduate requirements / Graduate requirements). 

Enrollment and Satisfactory Academic Progress

All financial aid is awarded subject to acceptance or readmission to the University as a regular degree seeking student. A student is eligible for financial assistance if she/he maintains satisfactory academic progress. This progress is reviewed at the end of each spring and/or summer term for the succeeding academic year. Satisfactory progress for financial aid purposes requires that the student maintain a minimum gpa and make progress toward their degree.

The minimum Satisfactory Academic Progress standards required to receive aid is available from the Financial Aid Web Site. A student who wishes to appeal the denial of financial aid must first have his/her case reviewed by their Financial Aid Counselor. If the student is not satisfied with the Director's decision, a further appeal can be made to the Director of Financial Aid. The appeal form is available in the Financial Aid Office or one the Forms page of this website.

How much can I borrow?

If you're a dependent undergraduate student you can borrow up to 

• $5,500 if you're a first-year student (Freshman) enrolled in a program of study that is at least a full academic year.   Only $3,500 can be Subsidized Stafford (if eligible).
• $6,500 if you've completed your first year of study (Sophomore) and the remainder of your program is at least a full academic year.  Only $4,500 can be Subsidized Stafford (if eligible).
• $7,500 a year if you've completed two years of study (Junior or Senior) and the remainder of your program is at least a full academic year.  Only $5,500 can be Subsidized Stafford (if eligible).

If you're an independent undergraduate student or a dependent student whose parents are unable to get a PLUS Loan, you can borrow up to 

• $10,500 if you're a first-year student (Freshman) enrolled in a program of study that is at least a full academic year (only $3,500 of this amount may be in subsidized loans). 
• $12,500 if you've completed your first year of study (Sophomore) and the remainder of your program is at least a full academic year (only $4,500 of this amount may be in subsidized loans). 
• $12,500 a year if you've completed two years of study (Junior or Senior)  and the remainder of your program is at least a full academic year (only $5,500 of this amount may be in subsidized loans). 

For periods of study that are less than an academic year, the amounts you can borrow will be less than those just listed. Talk to your financial aid administrator to find out how much you can borrow.

Generally, if you're a graduate student, you can borrow up to $20,500 each academic year. (Only $8,500 of this amount may be in subsidized Stafford loans.) You may not receive more than the cost of attendance as determined by the university.

NOTE: The amounts given above are the maximum yearly amounts you can borrow in both subsidized and unsubsidized loans. You may receive less than these yearly maximum amounts if you receive other financial aid that is used to cover a portion of your undergraduate cost of attendance or graduate cost of attendance.

The total debt you can have outstanding from all Stafford Loans combined is 

• $23,000 as a dependent undergraduate student. 
• $46,000 as an independent undergraduate student (only $23,000 of this amount may be in subsidized loans). 
• $138,500 as a graduate or professional student (only $65,500 of this amount may be in subsidized loans). The graduate debt limit includes any Stafford Loans received for undergraduate study. 

What's the interest rate charged on these loans?

For all  subsidized loans that were first disbursed on or after July 1, 2008 and before July 1, 2009, will have a fixed rate of 6.0%

All other subsidized and unsubsidized loans that were first disbursed on or after July 1, 2006, the interest rate is fixed at 6.8%.

If you have a loan that was first disbursed on or after July 1, 1994, the interest rate could change each year of repayment but it will never exceed 8.25 percent. The interest rate is adjusted each year on July 1.  You'll be notified of interest rate changes throughout the life of your loan. 

If you had loans that were first disbursed before July 1, 1994, the interest rate on these loans may be different. Check with the lender or agency that holds your loan. 

If you have subsidized loans, you will not be charged interest while you're enrolled in school at least half time, during a grace period, or during authorized periods of deferment (postpone payment). Interest will begin to accrue--that is, accumulate--when you enter repayment.

If you have unsubsidized loans, you'll be charged interest from the day the loan is disbursed until it is repaid in full, including in-school, grace, and deferment periods. You may choose to pay the interest during these periods, or it can be capitalized - the interest will be added to the principal amount of your loan and additional interest will be based upon the higher amount.. You may estimate how much this costs per month by using this chart or find out how much you will pay when you begin repayment using the finaid calculator.)

Is there a charge for these loans?

You'll pay fees of up to 1.5 percent of the loan and a default fee of 1% of the loan.  These fees are deducted proportionately from each disbursement of your loan.  For a FFEL Stafford Loan, a portion of this fee goes to the federal government to help reduce the cost of the loans.  If you don't make your loan payments when they're scheduled, you may be charged collection costs and late fees.

How do I pay back the loan?

There are three repayment plans that are available to borrowers of FFEL Stafford Loans if your first FFEL Program Loan was disbursed on or after July 1, 1993. All the repayment plans require you to repay the loan within 10 years. The repayment plans will be explained in more detail during entrance and exit counseling sessions at your school. The repayment chart shows examples of estimated monthly payments for various loan amounts under each of the plans. Aspects of these repayment plans will vary by lender. 

For loans disbursed after July 1, 2006, the interest rate is fixed at 6.8%.   To estimate payments on a Federal Stafford Loan, you may use the payment calculators on the finaid website. The current interest rate is 4.70%. 

In some cases it may be beneficial for you to consolidate one or more of your FFEL Stafford Loans into a Consolidation Loan. 

You may choose one of the following repayment plans 

• A Standard Repayment Plan requires you to pay a fixed amount each month--at least $50 or the interest that has accrued.   To see an estimated repayment plan, click here.
• Under a Graduated Repayment Plan, your payments will be lower at first and then increase over time. No scheduled payment may be more than three times greater than any other of your scheduled payments. 
• An Income-Sensitive Repayment Plan bases your monthly payment on your yearly income and your loan amount. As your income rises or falls, so do your payments. No single required payment may be more than three times greater than any other of your required payments. Each of your payments must at least equal the interest accrued on the loan between scheduled payments. 

How do I apply for a FFEL Stafford Loan?

First, you must complete the Free Application for Federal Student Aid (FAFSA) or Renewal FAFSA. After your FAFSA is processed, RU will review the results and will send you an Award Notification Letter indicating the amounts that you are eligible to borrow. You can accept the amount of the Stafford Loan offered that you want to borrow and complete the Loan Section on the Award Notification Letter. Read the instructions and complete the Award Notification Letter carefully. The completed Award Letter is then returned to the Radford University Financial Aid Office for processing. Radford University will be using the Full Circuit processing system beginning with the 2000-01 academic year. After you have completed the verification and review process at Radford University, your loan eligibility information will be forwarded to the guarantee agency or lender that you have selected. To check the status of your Federal Stafford Loan application at Radford University, you may use the Student Information System.

If you are borrowing a Federal Stafford Loan for the first time at Radford University, you will be required to complete an Entrance Interview before funds can be disbursed to you.

How can I find a lender?

Radford University will process your application for any lender that you choose.  Listed below are the lenders that Radford University students used last year.  To check the status of your Federal Stafford Loan application at Radford University, you may use the Student Information System.  

Although you are borrowing from a lender, many lenders contract with other agencies to collect the loans.  Servicers will be the ones that you will be working with during repayment of your loan.  Lenders may also sell your loans to other organizations, so it is very important to review materials that you receive from your lender or servicer.

Lenders RU Students have used

AMS Bank of America Bayport Federal Credit Union Chartway Federal Credit Union Chase Citibank Citizens Banik Discover Student Loan Dupont Community Federal Credit Union EdAmerica EFSI Key Bank Langley Federal Credit Union Navy Federal Credit Union Nelnet NellieMae Northwest Federal Credit Union NW Federal Credit Union PNC Bank Pentagon Federal Credit Union Richmond Postal Credit Union Sandy Spring Bank Salem VA Medical Center Credit Union Salliemae Southwest Student Services Suntrust Bank Wachovia Bank

Although the Federal Stafford Loan program has federally mandated options, such as interest rates, many lenders offer additional benefits for the loans.  Lenders can change these benefits at any time and without notice. 

  How will I receive my Federal Stafford Loan?

After you have completed the verification and review process at Radford University, your loan eligibility information will be forwarded to the guarantee agency or lender that you have selected. To check the status of your Federal Stafford Loan application at Radford University, you may use the Financial Aid Student Information System. 

Your lender will send the loan funds to your school. In most cases, your loan will be disbursed in at least two installments; no installment can be greater than half the amount of your loan. 

Your loan money must first be used to pay for your tuition and fees, room and board, and other school charges. If loan money remains, you'll receive the funds by check or in cash unless you give the school written permission to hold the funds until later in the enrollment period.

At Radford University, most funds are delivered to RU by Electronic Fund Transfer. Lenders who do not participate in Electronic Fund Transfer with Radford University will send the funds by paper check to Radford University. These checks are co-payable to Radford University and the student. When the Student Accounts Office receives the Federal Stafford Loan money, an e-mail  will be sent to the student indicating that the funds have been received. If the Federal Stafford Loan money is delivered by Electronic Fund Transfer (EFT), any money owed to Radford University will be automatically deducted from the loan amount before the excess money is deposited in the student's checking or savings account (if the student has signed the RU Direct Deposit agreement). If the student has their money delivered by EFT, but does not sign the Direct Deposit agreement, a refund check will be mailed to the student of any excess balance on their student account beginning the second week of classes. If the Federal Stafford  Loan funds are delivered as a check and the student owes money to Radford University on his/her student account, the student will be directed to endorse the check at the Student Accounts Office. A refund check of any excess balance of funds on the student account will then be mailed to the student.

Will I have an opportunity to cancel my loan after I apply?

Yes. You will receive a letter from the Financial Aid Office when your loan information is sent to your lender or guarantee agency. You will also receive a letter from Student Accounts when your account is credited with your Stafford Loan funds. You may cancel all or a portion of your loan by informing your school that you wish to do so within 14 days after the date that your school sends you this notice, or by the first day of the payment period, whichever is later. Your school can tell you the first day of your payment period. If you receive Stafford Loan funds directly by check, you may refuse the funds by not endorsing the check. 

When do I pay back these loans?

After you graduate, leave school, or drop below half time enrollment, you have six months before you begin repayment. This is called a "grace period."

During the grace period on a subsidized loan, you don't have to pay any principal, and no interest will be charged. During the grace period on an unsubsidized loan, you don't have to pay any principal, but interest will be charged. You can either pay the interest or it will be capitalized.

After you leave school or drop below half time enrollment, you'll receive information about repayment and will be notified of the date repayment begins. However, you're responsible for beginning repayment on time, even if you don't receive this information. 

Is it ever possible to postpone repayment of my loan?

Yes. Under certain circumstances, you can receive a deferment or forbearance on your loan. A deferment allows you to temporarily postpone payments on your loan. If you have a subsidized loan, you will not be charged interest during the deferment. If your loan is unsubsidized, you will be responsible for the interest on the loan during the deferment. If you don't pay the interest as it accrues, it will be capitalized. See the Loan Deferment Summary for the list of deferments available if your loan was first disbursed on or after July 1, 1993. 

For information on deferments for loans disbursed prior to that date, FFEL Stafford borrowers should contact the lender or agency holding the loans. You can't receive a deferment if your loan is in default.

If you are temporarily unable to meet your repayment schedule but are not eligible for a deferment, you may receive forbearance for a limited and specified period. During forbearance, your payments are postponed or reduced. Whether your loans are subsidized or unsubsidized, you will be charged interest. If you don't pay the interest as it accrues, it will be capitalized.

For example, you may be granted forbearance if you are 

• unable to pay due to poor health or other unanticipated personal problems. 
• serving in a medical or dental internship or residency. 
• serving in a position under the National Community Service Trust Act of 1993 (forbearance may be granted for this reason for a FFEL Stafford Loan, but not for a FFEL PLUS Loan). 
• obligated to make payments on certain federal student loans that are equal to or greater than 20 percent of your monthly gross income. 

Deferments and forbearances are not automatic. If you have a FFEL Stafford Loan, you must contact the lender or agency that holds your loan. For either program, you may have to provide documentation to support your request. You must continue making scheduled payments until you receive notification that the deferment or forbearance has been granted. 

Can my loan be discharged (canceled)?

Yes, in certain circumstances. A discharge releases you from all obligation to repay the loan. A complete listing of discharge conditions is given in the Discharge/Cancellation Summary.

Your loan can't be discharged because you didn't complete the program of study at the school (unless you were unable to complete the program because the school closed), didn't like the school or the program of study, or didn't obtain employment after completing the program of study.

Repayment assistance (not a discharge but another way to satisfy your obligation to repay) may be available if you serve in the military. For more information, contact your recruiting officer.

For more information about discharge or repayment assistance, FFEL Stafford Loan borrowers should contact the lenders or agencies that hold their loans. 

If you have been instructed by the RU Financial Aid Office to sign your note on-line, please click here.