Unsubsidized Stafford loan

Unsubsidized Stafford

These loans are available for students who don't qualify for subsidized loans. You, the borrower, are responsible for the interest on these loans as soon as it is taken out. Most of the terms and conditions of subsidized and non-subsidized Stafford loans are the same.

Eligibility:
• U.S. citizen or permanent resident.
• Full- or half-time undergraduate or graduate student.
• Non-need based.
• No credit check required.

Loan limits:
Independent students are allowed to borrow more than dependent undergraduate students.

Cumulative loan limits differ for undergraduate and graduate/professional students

Annual limits:

• For undergraduate students:
  Dependent—$23,000 between subsidized and unsubsidized Stafford loans
  Independent—$46,000 (up to $23,000 may be in subsidized Stafford loans)
• For graduate and professional students:
  $138,500 (up to $65,500 may be in subsidized Stafford loans)

Interest rate: Aggregate Limits are variable and may change annually.

• 2007-08 in school rate:  6.8%
• 2008-09 in school rate:  6.8% 
• During in-school, grace or deferment, rate based on 91 day T-bill rate + 1.70%.
• During repayment periods, based on 91 day T-bill + 2.30%.
• Capped at 8.25%.
• Based upon current rates.

Interest capitalization:
Unpaid interest will be capitalized at the start of repayment and at the end of any deferment. If borrowers obtain forbearances, interest may be capitalized no more frequently than quarterly, and again at the end of the forbearance period.

Total origination or insurance fees:
3% to the federal government to cover administrative costs.
0.5% to the guarantee agency to cover the insurance fee.

Repayment term:
Up to 10 years.

Minimum payment:
$600 per year ($50 per month per FFELP loan account). Borrowers who take out Stafford loans from more than one lender may be required to make more than one minimum payment.

Interest subsidy:
Not applicable.

Repayment begins:
Following a 6-month grace period after leaving school.

Your Stafford loan promissory note details your rights and responsibilities as a borrower. Key things you should know:

Borrower Rights:

• Before you begin to repay, your loan holder is required to give you a repayment schedule and detailed information about interest rates, fees, the balance you owe, and repayment options available to you.
• You have the right to defer repayment for certain defined periods after the grace period, if you qualify.
  • You have a right to request forbearance.
  • You may be eligible to repay your student loans under a graduated or income-based repayment schedule.
  • You may prepay your loan in whole or in part at any time without penalty.

• You must repay your loans on time (including any accrued interest, and the insurance and origination fees that were deducted from your loan at disbursement) even if you do not complete your education, are unable to find employment after graduation, or are dissatisfied with the education you received.
• You must notify your loan holder or servicer immediately about any changes to your name, address, telephone number, Social Security Number, or student status.
• You must repay at least $600 a year ($50 a month) per account, unless you have deferment or your loan holder or servicer agrees to a lesser amount.
• If you request deferment or forbearance, you must continue to make normally scheduled payments until you receive written confirmation that your account has been placed in deferment or forbearance.