Federal Loan Options
As you look into federal loans, a lot of confusing terms get thrown around. The federal student loan system is easier to understand if you break it down.
Federal Loan Types
Federal Subsidized Direct Stafford Loans
- Based on financial need.
- Free Application for Federal Student Aid (FAFSA) required.
- Government pays interest while you're in school.
- Interest rate is fixed.
- Repayment begins six months after you graduate, leave college or drop to less than half time.
- Annual loan limits are set by federal government.
Federal Unsubsidized Direct Stafford Loans
- Not based on financial need.
- FAFSA required.
- You pay the interest
- Interest rate is fixed.
- Repayment begins six months after you graduate, leave college or drop to less than half-time.
- Annual loan limits are set by the federal government.
Federal Direct Parent PLUS Loan
- Parents can take out this loan on your behalf if you are dependent on them, an undergraduate student and enrolled at least half time.
- Parents must pass a credit check.
- Loan money is paid in multiple disbursements.
- Loans are not based on financial need.
- Parents pay the interest.
- Interest rate is fixed.
- There are origination fees.
- Loan limit is equal to the cost of attendance minus other financial aid received
NOTE: Compare private loan rates before taking out a Parent PLUS Loan. There are some private student loans that have a lower interest and fees than the Parent PLUS Loan. Compare your options before selecting your loan. Learn about private loans.
Federal Direct Stafford Loan Rates, Fees and Limits
The federal government sets the terms and conditions for all federal student loans. The interest rate varies depending on the loan type and (for most types of federal student loans) the first disbursement date of the loan https://studentaid.gov/understand-aid/types/loans/interest-rates
| Annual Federal Stafford Loan Limits for Undergraduate Students (July 1, 2023 - June 30, 2024) |
||
|---|---|---|
| Annual Loan Limits | Dependent Undergraduate | Independent Undergraduate* |
| Freshman | $5,500 (maximum $3,500 in Subsidized Stafford Loans) | $9,500 (maximum $3,500 in Subsidized Stafford Loans) |
| Sophomore | $6,500 (maximum $4,500 in Subsidized Stafford Loans | $10,500 (maximum $4,500 in Subsidized Stafford Loans |
| Junior and Senior | $7,500 (maximum $5,500 in Subsidized Stafford Loans | $12,500 (maximum $5,500 in Subsidized Stafford Loans |
*If you're a dependent student whose parents applied for, but were not approved for, a Federal PLUS Loan (parent loan), you can borrow at the Independent undergraduate level. Contact your financial aid office to determine the process.
