**Federal Direct Stafford Subsidized Loans may be offered to students who demonstrate financial need. When determining the amount of a Subsidized loan, the cost of attendance, expected family contribution and estimated financial aid must be taken into account.
**Budget Control Act of 2011
Effective for loans made on or after July 1, 2012, graduate and professional students are no longer eligible to receive Federal Direct Subsidized Loans. The terms and conditions of Direct Subsidized Loans received by any student for loan periods beginning before July 1, 2012, for either graduate or undergraduate study, are not affected by this change. The annual loan limit for graduate and professional students remains unchanged at $20,500, but this amount will now be limited to Direct Unsubsidized Loans.
In addition, the BCA terminates the authority of the Department of Education to offer any repayment incentives to Direct Loan borrowers to encourage on-time repayment of loans, including any reduction in interest rate or origination fee, effective for loans first disbursed on or after July 1, 2012. As a result, the up-front interest rebate that has been provided to Direct Loan borrowers at the time of their loan disbursement will no longer be offered on any Direct Loan program loan with a first disbursement date that is on or after July 1, 2012.
The law continues to authorize the Department to offer interest rate reductions to Direct Loan borrowers who agree to have payments automatically electronically debited from a bank
account.
| Federal Direct Stafford Loans |
Dependent Students
(whose parents were not denied a PLUS loan) |
Combined Base Limit for Subsidized and Unsubsidized Loans |
Additional Limit for Unsubsidized Loans |
Total Limit for Unsubsidized Loans (minus subsidized amounts) |
| First-Year Undergraduate (Freshman) |
$3,500 |
$2,000 |
$5,500 |
| Second-Year Undergraduate (Sophomore) |
$4,500 |
$2,000 |
$6,500 |
| Third-Year and Beyond Undergraduate (Junior, Senior) |
$5,500 |
$2,000 |
$7,500 |
Independent Students
(and dependent students whose parents were denied a PLUS loan) |
Combined Base Limit for Subsidized and Unsubsidized Loans |
Additional Limit for Unsubsidized Loans |
Total Limit for Unsubsidized Loans (minus subsidized amounts) |
| First-Year Undergraduate (Freshman) |
$3,500 |
$6,000 |
$9,500 |
| Second-Year Undergraduate (Sophomore) |
$4,500 |
$6,000 |
$10,500 |
| Third-Year and Beyond Undergraduate (Junior, Senior) |
$5,500 |
$7,000 |
$12,500 |
**Graduate and Professional Students (see Budget Control
Act Changes above effective
July 1, 2012) |
Combined Base Limit for Subsidized and Unsubsidized Loans |
Additional Limit for Unsubsidized Loans |
Total Limit for Unsubsidized Loans (minus subsidized amounts) |
| Graduate and Professional Students |
$8,500 (until July 1, 2012) |
$12,000 ($20,500 after July 1, 2012) |
$20,500 |
Interest Payment: For subsidized loans disbursed prior to July 1, 2012, the federal government does not charge interest while you are enrolled in school at least half-time, during the six-month grace period, or during deferments.
For new subsidized loans first disbursed on or after July 1, 2012 through June 30, 2014, the Federal government will no longer subsidize the student loan interest during the six month grace period after the student graduates or drops below half-time status.
Interest Rates: For subsidized loans first disbursed on or after July 1, 2012, the fixed interest rate will be 3.4% for all undergraduate borrowers.
Loan Fee: Effective July 1, 2012, a loan origination fee of 1.0% (will be subtracted from the gross amount of the loan by the Federal government. The fee is subtracted from the loan before it is disbursed.
Repayment: After you graduate, leave school or drop below half-time enrollment, you have a 6 month grace period before you begin repayment. You may prepay all or part of a loan at any time without penalty. If you have more than one Federal student loan, be sure to specify which loan you are prepaying.
| Aggregate Loan Limits - Federal Direct Stafford Loans |
| |
Combined Base Limit for Subsidized and Unsubsidized Loans |
Additional Limit for Unsubsidized Loans |
Total Limit for Unsubsidized Loans (minus subsidized amounts) |
| Dependent Undergraduate Students (whose parents were not denied a PLUS loan) |
$23,000 |
$8,000 |
$31,000 |
| Independent Undergraduate Students (and dependent students whose parents were denied a PLUS loan) |
$23,000 |
$34,500 |
$57,500 |
| Graduate and Professional Students |
$65,500
(including undergraduate Stafford loans) |
$73,000 |
$138,500 |
