Stafford Loan Process

Application Process

Applying for the Stafford Loan is actually easy. All you have to do is fill out the FASFA forms provided by the government, and whatever forms your lender may request. If you are applying for subsidized loans, you will need to determine that you have financial need, and your school will decide that. You must also be enrolled at least half time, and not have any other defaulted students loans or owe grant refunds.

It sounds complicated, but it really isn’t. As long as you don’t owe money already on educational loans or grants, and can qualify through an application process, you can get your loans approved as long as you fill them out properly and provide the required information.

Loan Limits

The loan limits are reasonable with the Stafford program, and most people can get by with just one. However, some students combine subsidized and unsubsidized loans to make the educational experience a little more comfortable, and this seems to work well for a lot of them. Here are the various loan limits.

Dependent Student Loans

The limit for first year dependent students is $3,500; for second year students, it is $4,500; and for students who have completed their first two years, the limit is $5,500. This limit applies to students who are enrolled at least half time in a program that will continue for at least one academic year.

These limits are usually more than sufficient to cover most of the student’s expenses during undergraduate years at in-state public institutions.

Independent Student Loans

The independent student loans have different limits due to the nature of the students who qualify–they are receiving no help from family. An undergraduate can borrow up to $7,500 their first year, but only $3,500 may be subsidized; students who have completed a year of study can borrow up to $8,500 annually, with a limit of $4,500 subsidized; and students third year and beyond can borrow up to $10,500 per year with $5,500 limits in subsidized loans. Again, these limits apply to students enrolled at least half time in a program that will continue for at least one academic year.

Subsidized loans simply mean that the government will pay the interest on your loan while you are in school and during the grace period. These loans are based on financial need where the unsubsidized ones are not.

Student Loan Consolidation

Another advantage of the Federal Stafford Loan is the Federal consolidation program. This is a consolidation program where you can consolidate all your Stafford loans into one new loan, and can be a handy way to manage your repayments and other finances once you are out of school. There are many benefits, so consider talking to your school’s loan counselor and financial aid office for additional info.