salliemae Federal Stafford loan

Federal Stafford loan

Federal Stafford loans first disbursed July 1, 2006 are fixed-rate, low interest loans available to undergraduate students attending accredited schools at least half time. Stafford loans are the most common source of college loan funds.

Eligibility

• You must have submitted a FAFSA.
• For subsidized Stafford loans, you must have financial need as determined by your school.
• You must be a U.S. citizen or national, a U.S. permanent resident, or eligible non-citizen.
• You must be enrolled or plan to enroll at least half time.
• You must be accepted for enrollment or attend a school that participates in the Federal Family Education Loan Program.
• You must not be in default on any education loan or owe a refund on an education grant.

Features

• Sallie Mae lenders offer borrower benefits on Stafford loans that can save you money in repayment.
• Flexible repayment options are available, including consolidation.
• No payments are required while you are in school at least half time.
• You can manage your account online 24/7 at www.ManageYourLoans.com.
• You get life-of-loan servicing from Sallie Mae.
• There is no prepayment penalty.
• No credit check is required.
• Six-month grace period when no payments are required immediately following your graduation or dropping to less-than-half-time status.

Loan terms

Loan limits

Dependent	Annual loan limit
Freshman	$3,500*
Sophomore	$4,500*
Junior or senior	$5,500

Independent	Annual loan limit
Freshman	$7,500*
Sophomore	$8,500*
Junior or senior	$10,500
Graduate or professional	$20,500*

Undergraduate dependent lifetime limit	$23,000
Undergraduate independent lifetime limit	$46,000
Graduate or professional lifetime limit**	$138,500

*For loans first disbursed on or after July 1, 2007. **Exceptions may apply to certain graduate students.

Interest rate

For Stafford loans first disbursed beginning July 1, 2006, the interest rate is fixed at 6.8%.

Fees

For loans first disbursed July 1, 2007–June 30, 2008: Up to 2.5% in fees that includes a 1.5% federal origination fee and a 1% federal default fee. There are lenders and guarantors that work with Sallie Mae that pay all or a portion of these fees.

Repayment

• Standard repayment: You make both principal and interest payments each month for up to a 10-year repayment term. This plan has the lowest total interest cost.
• Graduated repayment: You make reduced payments in the early years of repayment and increased payments thereafter, while still paying off the loans within the maximum 10-year period. With graduated repayment, you have a higher total loan cost than with Standard Repayment.
• Income-sensitive repayment: Payments are a percentage of your gross income. You must reapply every year for this plan and payments are adjusted annually to reflect changes in income. With income-sensitive repayment, you have a higher total loan cost than with standard repayment.
  
• Extended repayment: If you have high student loan debt, you may be eligible for up to a 25-year repayment term and the choice of standard or graduated payments to keep payments affordable. With extended repayment, you have a higher total loan cost than with standard repayment.
• Student loan consolidation: You combine your eligible loans into a new loan with a single monthly payment and a fixed interest rate. While student loan consolidation can substantially lower your monthly payments, it will generally result in a higher total loan cost.

Legal

You are responsible for all of the interest that accrues on your unsubsidized Stafford loan while you are in school, but you do not have to pay the interest during this time. Unpaid interest that is deferred until after graduation is capitalized (added to the loan principal) and you will therefore pay interest on a higher loan amount. The federal government pays the interest on subsidized Stafford loans while you are in school, during grace, and during authorized deferment.