Graduate Stafford Loans

There are two different types of Graduate Stafford Loans, subsidized and unsubsidized.

• Subsidized loans are awarded based on financial need. You will not be charged interest before you begin repayment or during periods of deferment. The federal government "subsidizes" the interest during these times.
• Unsubsidized loans are not awarded based on financial needs. Any eligible student can take out unsubsidized graduate stafford loans. You will be charged interest from the time the loan is disbursed, to the time the loan is repaid in full.

How much can I borrow with a Graduate Stafford Loan?

	Graduate/ Professional Student
1st Year 2nd Year 3rd and 4th Years (and 5th year, where applicable)	$18,500 - No more than $8,500 can be in subsidized loans
Maximum Total Debt from Stafford Loans:	$138,000 - No more than $65,500 can be in subsidized loans. The Graduate Stafford Loan debt limit includes Stafford Loans received for undergraduate study.

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The amount you can borrow is based on your year in school and your status as a student. Independent students may borrow more because they are paying for college by themselves. Students may not always qualify for the maximum amount - check with your financial aid office.

Am I eligible for this loan?

You must be enrolled at least half time in an eligible program of study.

How can I get the Graduate Stafford Loan?

You first must complete the Free Application for Federal Student Aid (FAFSA) or Renewal FAFSA. After the FAFSA is processed your school will review the results and inform you about your loan eligibility. Next you must complete the Master Promissory Note (request the MPN), which is the promissory note for your loan. Your school may require that you complete their form, again - check with your financial aid office.

What is the interest rate of this loan?

Graduate Stafford Loans have variable interest rates (based on 91-day T-bill rate + 1.7% during school with an additional .6% increase upon graduation) capped at 8.25% or less, depending on yearly adjustments. The 91-day T-bill rate can be found in the financial section of most newspapers or the Wall Street Journal.

You will not be charged any interest for a subsidized Stafford Loan before you begin repayment and during the authorized period of deferment. The interest rate on your loan could change each year of repayment but, by law, it will never be more than 8.25 percent.

With unsubsidized Stafford Loans, the interest rate on your loan could change each year of repayment but by law, like the subsidized Graduate Stafford Loan, it will never be more than 8.25 percent. You will be charged interest from the day the loan is disbursed until it is repaid in full. You can choose to pay the interest during this period, or it can be added to the principal balance through a process called capitalization.

Are there any special fees I will pay?

With the Student Loan Network, you will be charged no (0%) guarantee fee and a 3% origination fee.

Many guarantors no longer charge a guarantee fee for education loans. If they do, this fee could be up to 1 percent of the loan amount. Additionally, there is an origination fee up to 3 percent of the loan amount which is used to insure the loan against default. Guarantee and origination fees are deducted from the loan proceeds before they are sent to the school.

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When will I get my money?

In most cases, your loan will be disbursed in two installments and sent directly to the school as determined by your financial aid office. Your loan money will be used to pay your tuition and fees. If loan money remains your school will credit your student account or pay you directly.

Can I cancel the Stafford Loan?

Yes. Your school must notify you in writing whenever it credits your account with your loan proceeds. This notification must be sent to you no earlier than 30 days before, and no later than 30 days after, the school credits your account. You may cancel all or a portion of your loan if you inform 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.

What are my repayment options?

The normal repayment for this loan is 10 years. You may be able to extend repayment by deferring or consolidating your loans. You may choose one of the following plans:

• The Standard Repayment Plan requires you to pay a fixed amount each month-- at least $50 or the interest that has accrued.
• The Graduated Repayment Plan sets your payments lower at first and then increases them over time. Each of your payments must equal the interest accrued on the loan between scheduled payments.
• The Income-Sensitive Repayment Plan bases your monthly payment on your yearly income and your loan amount. Payments may change as your income rises or falls.
• The Extended Repayment Plan is for borrowers with FFELP loans totaling more than $30,000. This plan offers a choice of fixed or graduated payments over a period of up to 25 years.
• Deferment does not fix your rates, it merely puts payment on hold. To lock your rates and lower your monthly payment, you must consolidate your loans.

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