Federal Direct Stafford Loans

The William D. Ford Federal Direct Stafford Student Loan Program, sponsored by the U.S. Department of Education, offers low interest rates and easy repayment terms, and is geared toward those entering or re-entering the workforce. The Federal Direct Unsubsidized Stafford Loan is available to graduate students. The loan is not credit based, and only requires that students meet specific eligibility requirements. All students must file a Free Application for Federal Student Aid (FAFSA) in order for the Office of Financial Aid to determine eligibility for a Federal Direct Unsubsidized Stafford Loan. Depending on enrollment status, FAFSA results, cost of attendance, and other factors, an amount will be offered to eligible students. The federal government is the lender for student loans received through the Federal Direct Stafford Loan Program.

Effective for the 2020–2021 award year, all Direct Loan borrowers (subsidized, unsubsidized, graduate PLUS, and parent PLUS) will be required to complete the Annual Student Loan Acknowledgment (ASLA) before receiving the first disbursement on the first Direct Loan that the student or parent borrows for each new award year. The ASLA is intended to better assist borrowers in understanding the financial responsibility of funding their education and provide current information on a borrower's cumulative loan balance. As part of the Master Promissory Note (MPN) confirmation process, the ASLA, (previously known as the Informed Borrower Tool (IBT)), requires student and parent borrowers to view how much they currently owe in federal student loans, and to acknowledge that they have seen these amounts, before borrowing new loans each award year. If the Direct Loan is for the 2020–2021 award year, the ASLA is required before the first disbursement of the first loan, even if that first disbursement occurs before July 1, such as a 2020–2021 loan containing a summer 2020 crossover payment period. The ASLA requirement is in addition to entrance counseling.

Borrowers are responsible for all interest that accrues on the Federal Direct Unsubsidized Stafford Loan, and have the option to pay the interest on their loans while in school or let interest accrue until repayment begins (known as capitalization). Applicants must be enrolled in at least half-time attendance (minimum six graduate-level credits per semester) to be eligible for Federal Direct Unsubsidized Stafford Loans and to maintain eligibility for “in-school” deferment status.

Graduate students may borrow up to $20,500 per academic year from the Federal Direct Unsubsidized Stafford Loan Program. If graduate students are taking undergraduate prerequisite courses, a Preparatory Coursework form must be completed with their academic advisor and submitted to the Office of Financial Aid. Enrolled graduate students taking undergraduate preparatory coursework (concurrently while in a graduate program) may be eligible to receive undergraduate Direct Subsidized and Unsubsidized Stafford Loans. The total combined undergraduate, graduate, and professional aggregate loan limit for the Direct Stafford Loan program is $138,500, of which no more than $65,500 can be subsidized.

Graduate students who qualify for Stafford Loans through preparatory coursework are only eligible to receive up to a total of $12,500 in Stafford Loans for the academic year, of which no more than $5,500 may be subsidized (depending on FAFSA information determined eligibility). Graduate students receiving undergraduate Stafford Loans through preparatory coursework are subject to the undergraduate federal loan lifetime aggregate limits for independent students. Undergraduate independent students are eligible to receive up to a total of $57,500 in Stafford Loans for their lifetime, which no more than $23,000 may be subsidized (depending on FAFSA information determined eligibility).

Loan repayments will not be required while students maintain at least half-time attendance. Repayment starts six months after students leave school or drop below half-time attendance. Interest on Unsubsidized Stafford Loans begin to accrue when the loan is fully disbursed, and students may start repayments at any time.

Effective for Federal Direct Stafford Loans first disbursed on or after July 1, 2006, the interest rate is fixed. Prior to this date, Federal Direct Stafford Loan interest rates were variable. Federal Direct Loan interest rates change from year to year (in July) and may also change specifically for one type or the other; Subsidized or Unsubsidized, Graduate or PLUS. For loans disbursed after July 1, 2019, the interest rate for Unsubsidized Stafford Loans is 6.08 percent. Students who received loans prior to the aforementioned dates and who still have balances outstanding on those loans will continue with the interest rate rules in effect at the time of their original loans. Borrowers will also be charged an origination fee. The origination fee represents the lender’s (the federal government) fee for making the loan. For loans disbursed after October 1, 2019, the origination fee is 1.059 percent.

Annual and Aggregate Graduate Limits: Unsubsidized Stafford Eligibility Only

  • Annual: $20,500 (Ineligible for Subsidized Stafford Loans)
  • Aggregate: $138,500 (Including Undergraduate and Graduate Combined)