Federal Stafford Loan
What is it?
The Federal Stafford Loan is a low-interest loan backed by the federal government. For students who must borrow to supplement personal and family savings, part-time employment, and other aid, a Stafford Loan is generally the first choice because it is less expensive than alternative loans. Alternative loans should be avoided except in extraordinary circumstances.
Stafford Loans come in two types: subsidized and unsubsidized. Subsidized Stafford Loans are preferable because though interest begins accruing at the time of disbursement, the government pays the interest for you while you are in school, and if you qualify to have your payments deferred. With Unsubsidized Stafford Loans, however, you are required to pay the interest. You may choose to make monthly interest payments while you are in school, or you may choose to have the interest capitalized (it becomes part of the principal loan amount, and you will pay interest on this growing amount). It will cost you less in the long run to pay the interest as you go.
Subsidized Stafford Loans disbursed to undergraduate students on or after July 1, 2012 have a 3.4 annual percentage rate (APR), while Unsubsidized Stafford Loans for undergraduate students will have a 6.8 percent APR. The annual percentage rate (APR) for graduate student Unsubsidized Stafford Loans is 6.8 percent. Federal loans rates are fixed and once the loan has been disbursed the rate for that loan will not change, even if the rate for new loans in future years is different. By contrast, alternative loan rates are variable, are based on the Prime Interest Rate, and may fluctuate depending on economic conditions. This makes alternative loans potentially much more expensive than Stafford Loans.
| Interest Rates (July 1, 2012-June 30, 2013) | ||||
|---|---|---|---|---|
| Loan Type | Undergraduate Subsidized | Undergraduate Unsubsidized | Graduate Unsubsidized | |
| Annual Interest Rate | 3.4% | 6.8% | 6.8% | |
| Interest Payment Begins | After drop below half-time enrollment | After first disbursement | ||
There are fees associated with receiving a Stafford Loan. A 1% origination fee will be deducted from the gross amount of your loans before disbursement.
Beginning in the 2012-13 aid year, Graduate students are no longer eligible for Subsidized Stafford Loans.
Who is eligible?
Subsidized Stafford Loans are offered based on financial need as assessed though the application. Financial need is not a requirement for Unsubsidized Stafford Loans. The remaining requirements are the same for both types of Stafford Loans.
To establish and maintain eligibility, a student must meet the following criteria:
- Be a U.S. citizen, permanent resident, or other eligible noncitizen.
- Have a high school diploma or its recognized equivalent.
- Meet all Satisfactory Academic Progress requirements.
- Be 1) admitted to BYU as a regular student in a degree-seeking undergraduate or graduate program, or 2) pursuing initial teacher certification, or required recertification, or 3) take prerequisite courses for admission to a graduate degree-seeking program (for current or future enrollment during the academic year).
- Be enrolled in at least 6 credit hours per semester or 6 hours per term for undergraduates, and in 4.5 hours per semester or 4.5 hours per term for graduates, during the entire loan period. (The credits must meet eligibility requirements.)
- Be awarded by your last day of eligible enrollment.
- Do not exceed federal loan limits.
Please see the new Repeat Policy to find out if you're still eligible for federal financial aid.
Your eligibility for federal financial aid is subject to specific terms and conditions. We are required to follow federal regulations even if funding has already been awarded and/or disbursed when new information regarding your eligibility becomes available. If you are awarded financial aid and subsequently fail to maintain eligibility, or we become aware of additional information which affects our initial determination of your award eligibility, adjustments to your award may be required. If adjustments are necessary, you may be required to repay some or all of your funding. For more details, click here.
How do I apply?
Begin by submitting the Free Application for Federal Student Aid (FAFSA), as indicated in Step 4. Then continue through the remaining steps as suggested.
When are the deadlines, and when will I know if I am a recipient?
| 2012-2013 Deadlines | ||
|---|---|---|
| Regarding | Deadline | Description |
| Priority Processing | May 1, 2012 | Recommended submission date for 2012–2013 FAFSA |
| FAFSA | June 30, 2013 OR your last date of 2012–2013 attendance, whichever comes first | Complete and correct FAFSA must be submitted for the 2012–2013 academic year |
| Verification | September 20, 2013 OR 120 days beyond the last day of your 2012–2013 attendance, whichever comes first | If selected, you must complete verification before you are awarded federal financial aid. Please check your To-Do List in My Financial Center and submit appropriate documents if requested. |
| Add/Drop Deadline | Fall 2012-September 10 Winter 2013-January 18 Spring 2013-May 7 Summer 2013-July 1 |
|
| Loan Process | Last day of class for semester/term. |
|
Please also see Dates and Deadlines for other significant dates and information.
You will know if you are eligible for a Subsidized and/or Unsubsidized Stafford Loan after Step 6 of your processing has been completed, including any follow-up "To-Do List" items and messages, which can be found in My Financial Center. We begin awarding federal aid programs about mid-July for students who have completed their processing by that time. Processing can take anywhere from just a few days to several weeks, depending on student response to "to do" list items and messages, and how soon the coming semester will begin. Because of the volume of applications submitted in the weeks just prior to the beginning of the semester, processing time is significantly increased during those periods.
How much money can I get?
Award amounts depend on your year in school and your dependency status. Yearly award amounts are disbursed to the student over a period of at least two semesters.
Yearly Borrowing Limits
| Year/Classification | Subsidized | Total (subsidized & unsubsidized) | |
|---|---|---|---|
| Dependent Undergraduates (excluding those whose parents can't get PLUS) | |||
| Freshman | $3,500 | $5,500 | |
| Sophomore | $4,500 | $6,500 | |
| Junior or Senior | $5,500 | $7,500 | |
| Independent Undergraduates & Dependent Students whose parents can't get PLUS | |||
| Freshman | $3,500 | $9,500 | |
| Sophomore | $4,500 | $10,500 | |
| Junior or Senior | $5,500 | $12,500 | |
| Graduate & Professional Students (all years) | |||
| Graduate Students | N/A | $20,500 | |
Note: The amounts in the chart above are the maximum amounts that you may borrow for the academic year. You might receive less than the maximum depending on the total amount of other financial aid you receive. The maximum amount you borrow may also be less if you are enrolled for less than an academic year.
Bachelor of General Studies (BGS) and other students taking Independent Study courses have additional restrictions on Stafford Loan amounts that may be borrowed. Please refer to the Independent Study and BGS page for additional information.
*Dependent students whose parents are denied a PLUS loan may receive additional unsubsidized Stafford up to the Independent Undergraduate limit.
Lifetime Borrowing Limits (Aggregate Limits)
| Grade Level | Subsidized | Total (subsidized & unsubsidized) |
|---|---|---|
| Dependent Undergraduates (excluding those whose parents can't borrow PLUS) | $23,000 | $31,000 |
| Independent Undergraduates & Dependent Students whose parents can't get PLUS | $23,000 | $57,500 |
| Graduate and Professional Students | N/A | $138,500* |
*Aggregate limits for graduate students include loans borrowed as an undergraduate student.
How and when will I get the money?
Your federal financial aid will be posted to your Student Account. It will credit toward your tuition and other charges. If money from your federal financial aid and other aid exceeds charges owed, Student Financial Services will refund any excess monies. The refund process begins approximately three days after the first day of classes, and continues until after the add/drop deadline.
If registered part-time, excess funds will remain in the Student Account until after the add/drop deadline, or until you verify with Student Services (801-422-4104) that no further registration changes will be made.
Excess funds will be sent to your bank account if you authorize direct deposit. If you do not authorize direct deposit, any excess funds will be mailed to the mailing address you have listed on myBYU. This may delay your receipt of funds.
Other Important Stafford Loan Topics
- Loan Repayment
- Deferment and Forbearance
- Avoiding Delinquency and Default
- Avoiding Overawards
- Entrance/Exit Counseling
- Loan Consolidation
- Repeat Policy
- Dates and Deadlines
