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The Federal Direct Stafford Loan is a low-interest loan available to students for post secondary educational expenses. Most matriculated students are eligible for an Unsubsidized Direct Stafford Loan each academic year. The loan is made to the student who is responsible for repayment. The interest rate for all Stafford Loans disbursed on or after July 1, 2014 is a fixed rate of 6.21%.
Subsidized Direct Loan: As of July 1, 2012 Subsidized Loans are no longer available for graduate students.
Unsubsidized Direct Loan: The government will not pay interest while a student is in school. Interest accrues as soon as the loan is disbursed, and must be paid or capitalized, during periods of in-school enrollment and/or deferment.
You are eligible to participate in the Federal Direct Loan Program if you are: (1) a U.S. citizen or permanent resident; (2) enrolled in a degree program on at least a half-time basis; and (3) making satisfactory academic progress. This requires that you have a cumulative GPA of at least 3.0 (grades of I and C+ or lower are interpreted as failures).
Graduate and professional students are eligible to borrow up to $20,500 in an Unsubsidized Direct Loan. The cumulative maximum for the Federal Direct Stafford/Ford Loan Program is $23,000 for undergraduates, and $138,500 for graduate and professional students, including any amount borrowed for undergraduate study.
Once the loan servicer has approved your loan, the loan amount minus the origination fee will be electronically credited to your student account within five to ten business days. Effective for loans whose first disbursement will occur on or after 12/1/13 and before 10/1/14, the origination fee will be 1.072%. For loans whose first disbursement will occur on or after 10/1/14 and before 10/1/15, the origination fee will be 1.073%. This fee is determined by the U.S. Department of Education. Funds cannot be disbursed until the ENTRANCE COUNSELING requirement has been fulfilled, until you have signed a Master Promissory Note, and until you are registered for the semester.
If there is a credit on your student account after loan funds have disbursed (this does not include pending credits since this means the loan funds have not yet arrived), you may request a refund by completing an online request for electronic refund to your bank account by logging into the Student Link, select the Money Matters tab, then Student Account Inquiry. Click Request a Refund in the upper right hand corner.
Federal legislation requires that all Federal Direct Stafford Loans be disbursed in two equal installments. The second disbursement cannot be made available until halfway through the loan period. This means that for students who are attending both semesters of the academic year, half the loan amount is available in the fall and the other half is available in the spring. For students borrowing for one semester only (January graduates or students beginning their studies in January), the loan is disbursed in one lump sum.