Direct Stafford Loan
Direct Stafford Loans are low-interest loans available to eligible students to help cover the cost of higher education. A loan is money you borrow and must pay back with interest. The lender is the U.S. Department of Education rather than a bank. Direct Stafford Loans come in two types - Direct Subsidized Loans and Direct Unsubsidized Loans. Eligibility is determined by completion of the FAFSA and enrollment status (minimum of 6 credits each semester).
Direct Subsidized Loans are for undergraduate students with financial need. Students are not charged interest while enrolled in school at least half-time or during grace and deferment periods.
Direct Unsubsidized Loans are for undergraduate and graduate students regardless of financial need. Students are responsible for paying the interest that accumulates on the loan from the time it is first paid out. If you choose to defer your interest payments, the interest will capitalize on the principal balance of the loan and increase the total amount you have to repay.
Direct Loans have fixed interest rates that differ depending on the loan type and year borrowed. For the 2017-2018 academic year, the interest rates are as follows...
Undergraduate Subsidized/Unsubsidized Loans - 4.45%
Graduate Unsubsidized Loans - 6%
In addition to interest, Direct Stafford Loans are subject to an origination fee of 1.066%. This fee is deducted from each loan by the U.S. Department of Education before the funds are applied to a student's account.
Students receiving Direct Loans must complete an Entrance Counseling session, a tool to educate you on the terms and conditions of your loans, and sign a Master Promissory Note (MPN) acknowledging that you agree to these terms. These items can be completed at www.studentloans.gov.
Additionally, all first-time borrowers at NYSID are required to meet with the Financial Aid Counselor for a brief, in-person, loan counseling session prior to the disbursement date. More information on this in-person loan counseling session will be given to first-time borrowers upon receipt of their award letters.
Repayment of Direct Stafford Loans begins six months after the student borrower graduates, leaves school, or drops below half-time (6 credit) enrollment status. You can find more information on loan repayment here.
Annual and Aggregate Federal Direct Loan Limits
There are limits on the loan amounts students are eligible to borrow each academic year (annual limit) and over a lifetime (aggregate limit). The actual amount that you can borrow depends on your year in school, whether you are a dependent or independent student, financial need, and enrollment status.
|Freshman (1-33 credits)||Sophomore (34-66 credits)||Junior (67-99 credits)||Senior (100-132 credits)||Aggregate Limit|
|Stafford (Subsidized / Unsubsidized)||$3,500||$4,500||$5,500||$5,500||$23,000|
|Additional Unsubsidized Stafford||$2,000||$2,000||$2,000||$2,000||$8,000|
|Independent Undergraduate/Dependent Undergraduate with PLUS Denial|
|Stafford (Subsidized / Unsubsidized)||$9,500||$9,500||$9,500||$9,500||$9,500|
|Additional Unsubsidized Stafford||$9,500||$9,500||$9,500||$9,500||$9,500|
|Graduate Limit||Graduate Limit|
|Total Stafford (unsubsidized)||$20,500||$138,500*||* This limit includes Stafford Loans received for undergraduate study.|
For more information on Direct Stafford Loans and answers to frequently asked questions, please visit the U.S. Department of Education's website here.