Stafford Loan Info for the 2011-2012 Academic Year
Before applying for any additional private student loans, college students should first file their FAFSA to confirm eligibility for the Federal Stafford loan.
The Federal Stafford loan program is used to offer students low-cost, guaranteed financial assistance for college. Even though they are still loans that must be paid back with any accumulated interest, they offer favorable terms and do not require a co-signer to get approved.
There are two kinds of Stafford loans available:
2011-2012 Stafford loan rates:
Yearly Stafford loan amounts for dependent undergraduate students:
Yearly Stafford loan amounts for independent students and graduate-level students:
How does the financial aid office determine eligibility? The financial aid office will award you with a subsidized or unsubsidized Stafford loan considering the following equation to calculate financial need:
If a student is determined to have financial need, a subsidized Stafford loan is awarded to meet that need, or fulfill the maximum amount of subsidized loan eligibility the student has.
Let's use an example for an undergraduate dependent student who is eligible for the subsidized Stafford loan:
The student can receive the maximum amount of subsidized Stafford loans to meet their grade level allotment. For a freshman, it's $3,500. A sophomore would get $4,500 and a junior or senior would receive $5,500.
Here is an example of a student who is partially eligible:
No matter if he or she is a freshman, sophomore, junior, or senior, the student may only receive $2,000 in subsidized Stafford loans to cover unmet need. The remaining Stafford loan eligibility is put into the unsubsidized variety.
Here is a student who is not eligible for subsidized Stafford loans, but will instead receive unsubsidized Stafford loans:
Student will receive unsubsidized Stafford loans up to his or her yearly grade level amount.
Ken O'Connor is a financial aid expert and the director of student advocacy at cuStudentLoans.org. Learn more about credit union private student loans and college planning by visiting his blog.
Home & Family Finance® Resource Center