Why did I receive less than what I applied for in Stafford Loan funds?

Stafford Loan Benefits:
  • Fixed interest rate - as low as 5.6%
  • No payments while in school at least half-time

Stafford loans in the Federal Family Education Loan Program (FFELP) are provided to you by different lenders. Lenders retain a percentage of the amount you borrow in guarantee fees and/or origination fees. Guarantee fees are used by the lender in creating a reserve to protect the loan program in instances when borrowers default on their loans. Origination fees are a processing fee retained by lenders. Stafford loans typically do not have origination fees, but a guarantee fee is likely. The fee is usually 1% of your loan amount. The 1% is taken from the amount you were awarded and therefore, what you actually receive will be the awarded amount minus the fees.

In some cases a student may not be eligible for the total maximum in Stafford Loan funds but rather a portion based on their FAFSA determination. For example: The Stafford Loan limit maximum for a freshman student is $3,500 but based on their FAFSA determination, a student may only be eligible to borrow $2,000 for that particular academic year.

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Stafford Loan Frequently Asked Questions