| Learn
about Stafford Unsubsidized Loans
| Stafford Subsidized
Loan |
 |
 The
Federal Stafford Subsidized loan is a federally sponsored
student loan available at schools participating in the
FFELP. A bank, credit union, savings and loan association
or in rare cases the school itself can make the loan.
The school's primary role is to certify your eligibility.
First time borrowers must complete
and submit to your school's financial aid office, a
Stafford Master Promissory
Note (MPN). The MPN specifies the school you plan
to attend, your lender (enter EFSI) and other necessary
personal information
A guarantor, a state agency
or non-profit corporation, insures the loan, which means
you can make the loan just on your signature. The guarantor
may charge a fee for this insurance.
This loan was created specifically
for students after high school and has many benefits
not ordinarily found in credit cards or other loan products.
You choose the lender. Keep in mind that this is the
beginning of a long-term relationship. It is a good
idea to use the same lender throughout your college
career. Multiple lenders can cause increased monthly
payments and complicate repayment.
A Federal Stafford Subsidized
loan is awarded on the basis of financial need. Eligibility
is determined in the analysis of the submitted FASFA
(Free Application for Federal Student Aid) data
and by the school. The school will offer you the loan
in an award letter if you qualify.
Stafford Loans at
a Glace
| Level
of Study |
Annual
Limits |
Lifetime
Limits |
Rate
Cap |
| Undergrad |
$2,625/$3,500/$5,5001 |
$23,000
2 |
8.25% |
| Grad |
$8,500 |
$65,500 |
8.25% |
1-
Stafford annual limits - As an undergraduate you
may borrow up to $2,625 per year for the first year,
$3,500 for the second year and up to $5,500 per
year for the third and subsequent academic years
for a cumulative total of $23,000.
2- Lifetime limits - Graduate limits include the
amount you borrowed as an undergraduate. Therefore
if you borrowed $23,000 in subsidized loans as an
undergraduate, you may be eligible for up to $42,500
in subsidized loans as a graduate student ($23,000
+ $42,500 = $65,000). |
TERMS:
| 1. |
The
interest rate on a Federal Stafford Subsidized loan cannot
exceed 8.25 percent. |
| 2. |
The interest rate
varies annually and is adjusted each July 1. You'll be
notified of interest rate changes throughout the life
of the loan. |
| 3. |
You may be required
to pay an origination fee of up to 3% of the principal
balance. This will be deducted from the loan disbursement
you receive which is then paid to the Department of Education. |
| 4. |
Repayment begins
six months after you graduate, withdraw, or drop below
half-time attendance and you have up to 10 years to repay.
The minimum payment amount is $50 per loan. |
| 5. |
Many lenders offer
up-front discounts or repayment incentives that affect
the over-all cost of the loan. You should examine these
options carefully when choosing a lender. You may get
more money up-front, but actually pay more in the long-term. |
APPLICATION PROCESS:
Complete
the Free Application for Federal Student Aid (FAFSA)
found at http://www.fafsa.ed.gov/, which will start
the financial aid application process at your school.
Your school may also have an institutional application
you must complete. If the school offers and you accept
a Federal Stafford Unsubsidized loan, you will receive
a Master Promissory Note that you must sign and return
as instructed.
OBTAINING YOUR LOAN MONEY
Normally, loans are disbursed in two equal disbursements,
at the beginning and middle of the academic period.
Schools disburse Stafford Subsidized Loans in one of
two ways:
- Electronic funds transfer
(EFT), which allows your lender to transfer your money
directly to a school's bank account and subsequently
to your student account.
- Paper check made payable
to you and your school and sent directly to the school
for endorsement.
Choose Brazos Educational
Assistance, Inc. to obtain Diamond Benefits
(Lender Code #833228)
| For more information,
contact us at: |
BRAZOS EDUCATIONAL ASSISTANCE
P.O. Box 14445
Austin, TX 78761-4445
Austin office: (800) 375-9208
loans@bhesc.org |
|
