**The information on this page is for the 2008 – 2009 academic year. For summer 2008 information, please click here.
Federal Stafford Loans
General Information
Beginning with the 2008-2009 academic year, IUPUI and IUPUC will utilize the federal Direct Loan program for all federal Stafford loans. The lender for the federal Direct Loan program is the US Department of Education. A federal Stafford loan is a low interest rate loan for students that can be used to help pay for your college education. There are two types of federal Stafford loans: subsidized and unsubsidized.
Subsidized
If you meet certain financial need criteria (based upon information supplied on your FAFSA), the federal government will pay the interest on your federal Stafford Subsidized loan while you attend school at least half time or during times when you qualify for an authorized deferment.
Unsubsidized
If you do not meet the financial need criteria (based upon information supplied on your FAFSA) to qualify for a Subsidized loan, you still can receive an federal Stafford Unsubsidized loan. You are responsible for paying the interest while you are in school. If you do not want to make the interest payments, the interest can be added to your principal balance through a process called capitalization.
2008-2009 Federal Stafford Loan Application Process
Borrowing Limits
The annual borrowing limit is determined by your degree status grade level and your dependency status (based upon information you supplied on your FAFSA). In addition to annual loan limits, there are also lifetime Stafford loan borrowing limits, also known as the aggregate limit.
Annual limits for loans disbursed on or after July 1, 2008
AGGREGATE LIMITS |
Dependent Student |
Indepedent Student |
|---|---|---|
Undergraduate Prerequisite |
$4,625 |
$8,625 |
1st year undergraduate |
$5,500 |
$9,500 |
2nd year undergraduate |
$6,500 |
$10,500 |
3rd year + undergraduate |
$7,500 |
$12,500 |
Graduate Prerequisite or Teacher Certification |
$5,500 |
$12,500 |
Graduate / Professional |
N/A |
$20,500 |
Health Professions |
N/A |
$40,500 |
In addition to the annual borrowing limits, there is also an aggregate, or cumulative, lifetime borrowing limit.
AGGREGATE LIMITS |
Subsidized |
Total |
|---|---|---|
Dependent Undergraduate, |
$23,000 |
$31,000 |
Independent Undergraduate, |
$23,000 |
$57,500 |
Graduate / Professional |
$65,500 |
$138,500 |
Health Professions |
$65,500 |
$224,000 |
Repayment
With either the federal Stafford Subsidized or Unsubsidized loans, repayment on the principal begins six months after graduation, leaving school, or dropping below half-time status. There are multiple repayment plans ranging from 10 years to 30 years.
Federal Stafford Loan Entrance and Exit Counseling
New federal Stafford loan recipients are required to complete entrance counseling. New federal Stafford loan borrowers are notified and typically complete entrance counseling online as they sign the Master Promissory Note.
Exit counseling is required for all students that have received a federal Stafford loan and who are schedule to graduate or will not be attending IUPUI at least half-time. An exit interview is your opportunity to review the amount of your loans and rights and responsibilities in repaying these loans.
Federal Stafford Borrower’s Rights and Responsibilities
- Remember that the MPN certifies your loans for the maximum amount you are eligible to borrow. Because you may accrue debt with each year of your education, you should be certain that you need the full amount of your education loan each year. You can decline or reduce your loan amount each year.
- You are required to repay education loans, even if you do not finish your academic program or your academic program does not meet your expectations.
- You are responsible for notifying your school and lender if you have received student loans from more than one lender.
- You must use money received from education loans for education-related expenses only.
- You must notify your lender in writing of:
- Name or address changes.
- Failure to enroll at IUPUI.
- Failure to enroll on at least a half-time basis or for the loan period certified.
- Withdrawal from school or reduction of attendance to less than half time.
- Transfer from one school to another.
- Graduation.
If you meet the eligibility requirements, you have a right to repayment deferments, which suspend principal loan payments for specified periods of time.
