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Federal Stafford Loans


General Information

IUPUI participates in the federal Direct Loan program for all federal Stafford loans. The lender for the federal Direct Loan program is the U.S. 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.



Important Information about Direct Subsidized Loans


A federal regulation has changed which temporarily eliminates the interest subsidy during your grace period on Direct Subsidized Loans first disbursed on or after July 1, 2012.  This change means that interest during your grace period (six months beginning from the date you graduate or stop attending at least half-time) must either be paid or will accrue and increase the amount due at repayment.  The temporary status is scheduled to end on July 1, 2014.  Direct Subsidized Loans disbursed prior to July 1, 2012, will retain the interest subsidy during your grace period.



Subsidized Stafford- Undergraduate Students

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. Federal regulation has changed to temporarily eliminate the interest subsidy during your grace period on Direct Subsidized Loans first disbursed on or after July 1, 2012.

This change means that interest, during your grace period (six months beginning from the date you graduate or stop attending at least half-time) must either be paid or will accrue and increase the amount to be repaid. The temporary status is scheduled to end on July 1, 2014. Direct Subsidized Loans disbursed prior to July 1, 2012, will retain the interest subsidy during your grace period. As of July 1, 2012, graduate and professional degree students are not eligible for receive subsidized loans.


Unsubsidized – Undergraduate and Graduate/Professional Students

Financial need is not a requirement to obtain an unsubsidized loan. You are responsible for paying the interest while you are in school. If you do not make the interest payments, the interest will be added to your principal balance through a process called capitalization.
Federal Loan Application Process and Borrower Benefits.


Current Interest Rates


Loan Origination Fee

In addition to interest, borrowers will pay a loan origination fee. This fee is used to offset the costs of the Direct Loan program. This fee is a percentage of the principal amount of each disbursement. It is deducted before the university receives the disbursement, so the loan amount that the student receives will be less than the amount that they will later have to repay. The Loan Origination Fee is 1.051% for Subsidized & Unsubsidized Federal Stafford Loans disbursed prior to December 1, 2013. Subsidized & Unsubsidized Federal Stafford Loans disbursed after December 1, 2013 will have an origination fee of 1.072%. 


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 aggregate limits.

Annual limits for loans disbursed on or after July 1, 2012

ANNUAL LIMITS

Dependent Student

Independent Student

Undergraduate Prerequisite

$2,625

$8,625

1st year undergraduate or Undergraduate Certificate
(0 – 25 credit hours earned)

$5,500

$9,500

2nd year undergraduate
(26 – 55 credit hours earned)

$6,500

$10,500

3rd year + undergraduate
(56+ credit hours earned)

$7,500

$12,500

Graduate Prerequisite, Teacher Certification or License Renewal

$5,500

$12,500

Graduate / Professional

N/A

$20,500

Health Professions
(Medical & Dental)

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, Teacher Certification, License Renewal or Prerequisite

$23,000

$31,000

Independent Undergraduate, Teacher Certification, License Renewal or Prerequisite

$23,000

$57,500

Graduate / Professional

$65,500

$138,500

Health Professions
(Medical & Dental)

$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. For Undergraduate students, a federal regulation has changed which temporarily eliminates the interest subsidy during your grace period on Direct Subsidized Loans first disbursed on or after July 1, 2012. This change means that interest during your grace period (six months beginning from the date you graduate or stop attending at least half-time) must either be paid or will accrue and increase the amount due at repayment. The temporary status is scheduled to end on July 1, 2014. Direct Subsidized Loans disbursed prior to July 1, 2012, will retain the interest subsidy during your grace period.


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 (MPN).

Exit counseling is required for all students who received a federal Stafford Loan and are expected 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 your 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 accept,
  reduce, or decline 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 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.


Additonal Information

Federal Stafford Loan Application Process