Subsidized vs. Unsubsidized Loans

Federal Direct Stafford Loans are low-interest loans for students to help pay for the cost of a student's college education. The lender is the U.S. Department of Education. There are two types of loans: Subsidized and Unsubsidized.

Subsidized Stafford Loan is a need based loan. The Federal Government pays the interest while enrolled in school. The Financial Aid Office will determine if you are eligible for this loan from information reported the on the FAFSA.

Unsubsidized Stafford Loan is a non-need based loan. The student is responsible for paying the interest while enrolled in school. You do have the option to defer the interest until graduation or separation from the institution for any reason. If you choose to defer your interest, it will accumulate and capitalize onto your principal. The Financial Aid Office will determine if you are eligible for this loan from the information reported on the FAFSA.

You may be awarded either loan or a combination of each loan for the academic year. The maximum you are eligible to receive for the academic year:

Dependent Undergraduate Students

Freshman may borrow up to $3500 per year plus an additional $2000 unsubsidized loan.

Sophomores may borrow up to $4,500 plus an additional $2000 unsubsidized loan.

Juniors and Seniors may borrow up to $5500 plus an additional $2000 unsubsidized loan.

The amounts listed are divided in half for each semester Fall and Spring.

If you are considered an Independent student or if your parent (s) applied for a Federal Plus Loan and it is denied by the lender you will also be eligible for additional unsubsidized loans in the amounts listed below:

Freshman and Sophomore: $4,000

Junior and Senior: $5,000

Graduate Students:

Graduate students are awarded based upon information received from the FAFSA. They may be awarded subsidized, unsubsidized or a combination. The maximum amount a graduate student may be awarded for the academic year:

Award Year 2011-2012:   Subsidized Loan : $8,500   Unsubsidized Loan: $12,000

Award Year 2012-2013:   Unsubsidized Loan: $ 20,500

**Please note these amounts may vary, depending on any additional aid you may receive. You may only receive up to your cost of attendance or budget for the academic year.**

Interest Rates

Undergraduate students—If the first disbursement of your subsidized loan is between July 1, 2010 and June 30, 2011, the interest rate on your loan is fixed at 4.5%. The interest rate on subsidized loans first disbursed to undergraduate students between July 1, 2011 and June 30, 2012 will be fixed at 3.4%.

Graduate and professional degree students—The interest rate is fixed at 6.8%.

Direct Unsubsidized Loans—The interest rate is fixed at 6.8% for all borrowers (undergraduate and graduate).

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