Federal Direct Stafford Loans
Stafford Loans are for undergraduate, graduate and professional degree students. There are two types of Stafford Loans: subsidized and unsubsidized. You must have financial need to receive a subsidized Stafford Loan. Financial need is not a requirement to obtain an unsubsidized Stafford Loan. The U.S. Department of Education will pay (subsidize) the interest that accrues on subsidized Stafford Loans during certain periods.
Eligibility
- Must be undergraduate, graduate, or professional student enrolled at least half time as a degree-seeking student.
- Must be a U.S. citizen, U.S. national, or permanent resident of the United States.
- Cannot be in default on a Federal education loan or owe a repayment of Federal Title IV aid.
- Must have financial need to receive a SUBSIDIZED Stafford loan; the U.S. Department of Education will pay (subsidize) the interest that accrues on Subsidized Stafford Loans during certain periods.
- Financial need is not a requirement to obtain an UNSUBSIDIZED Stafford Loan; the borrower is responsible for interest that accrues on Unsubsidized Stafford Loans.
Award Amounts - Effective July 1, 2008:
Stafford Loan limits depend on year in school and dependency status.
| Year/Classification | Base Amount | Additional Unsubsidized Loan Amount |
Total |
Dependent Students* |
|||
Freshman |
$3,500 |
$2,000 |
$5,500 |
Sophomore |
$4,500 |
$2,000 |
$6,500 |
Junior or senior |
$5,500 |
$2,000 |
$7,500 |
Independent Students* |
|||
Freshman |
$3,500 |
$6,000 |
$9,500 |
Sophomore |
$4,500 |
$6,000 |
$10,500 |
Junior or senior |
$5,500 |
$7,000 |
$12,500 |
Graduate Students |
$8,500 |
$12,000 |
$20,500 |
Professional Students |
$8,500 |
$32,000 |
$40,500 |
Interest Rates and Fees
For Stafford loans disbursed between July 1, 2008, and June 30, 2009, the interest rate is fixed at 6.0% for undergraduate Subsidized Stafford Loans (only) and fixed at 6.8% for unsubsidized Stafford Loans and graduate/professional Stafford Loans. For Summer 2008 up to 2% in fees may be charged to the borrower, including a 1% federal origination fee and a 1% federal default fee. In Fall 2008 the effective up front fee will be 0.5% of the loan. For example, the proceeds of a $10,000 loan will be reduced by $50. If a student fails to make 12 consecutive on-time payments, they will be billed an additional 1.5% fee.
Steps to apply for a Federal Stafford Loan
- File the Free Application for Federal Student Aid (FAFSA) at www.fafsa.ed.gov (this is a requirement) and submit all documents requested by the Division of Financial Aid
(DFA); check for required documents via the online Financial Aid Self Service system at myPurdue.
- DFA will send the student an Award Notice that the borrower can use to determine loan period, the type of eligibility, and the amount of eligibility. Note that beginning in Fall 2008 (the 08-09 Academic year and following), Purdue students will borrow in the Federal Direct Lending Program.
- The borrower needs to determine how much they want to borrow and will have the option to accept the full amount offered or reduce the loan amount at myPurdue.
- The borrower must also complete a Stafford Master Promissory Note (MPN) at www.dlenote.ed.gov (if not already on file).
- DFA certifies eligibility with the Direct loan servicer.
- Stafford loan funds are processed electronically through the Purdue Bursar. The student will be notified by the Bursar’s Office that funds have been processed. Funds are applied first to fees, then to any housing costs (if the Bursar bills for housing).
Any remaining Stafford funds are sent to the student via paper check or direct deposit.
Repayment Information
Loans are in deferred status as long as the student remains enrolled at least half time in a degree seeking program. If you would like more information regarding repayment, visit our student loan counseling page.
Amount Borrowed |
Payment |
$5,000 |
$58 |
$10,000 |
$115 |
$20,000 |
$230 |
$30,000 |
$345 |
$50,000 |
$575 |
$80,000 |
$921 |
Sample Estimated Monthly Repayment Chart: Assumes interest rate of 6.8% and all payments made as scheduled on 10-year repayment term (excludes any borrower benefit savings). Borrowers can estimate monthly payments at www.finaid.org/calculators/loanpayments.phtml.