Subsidized Stafford Loan
The Subsidized Stafford Loan is a federal student loan available to students with financial need. Subsidized student loans are the best loan options for students because they accrue less interest over the life of the loan than unsubsidized student loans.
On a subsidized loan, interest is paid by the government (subsidized) while the student is attending school or while the loan is in deferment.
Note: Congress has not yet finalized interest rates for the 2013-2014 academic year. Check out the Student Loan Network blog for updates on interest rates and other student loan news.
Subsidized Student Loan Quick Facts
- Interest rate of 3.4% for the 2012-2013 year
- Interest is subsidized while in school
- Need-based - eligibility determined by FAFSA
- Lifetime loan limit of $23,000
- 1% origination fee
Subsidized Loan Limits
| Grade |
Annual Sub. Loan Limits
(Dependent & Independent) |
|---|---|
| First Year | $3,500 |
| Second Year | $4,500 |
| Third Year and Beyond | $5,500 |
| Graduate or Professional* | $8,500 |
| Total Lifetime Limit | $23,000 |
*Graduate and professional students are no longer eligible for subsidized student loans as of July 1, 2012. Subsidized loans received prior to this date do count towards lifetime loan limits.
Subsidized Loan Eligibility
Subsidized stafford loan eligibility is dictated by the Department of Education. The following items are conditions for subsidized student loan eligibility.
To be eligible for any federal student loan program, students must be:
- US Citizens or eligible non-citizens
- Enrolled at least half-time in an accredited academic program
- Have completed high school or equivalent (e.g. GED)
- Not in default status or delinquent on any existing federal student loan
To receive subsidized student loans, students must:
- Have financial need as determined by the FAFSA
- Be an undergraduate student; Graduate students no longer qualify for subsidized loans as of July 1, 2012.
How to Apply for Subsidized Loans
To apply for a Direct Subsidized Stafford Loan, students must file the Free Application for Federal Student Aid (FAFSA). Once completed, students will receive notification from their school detailing how much they are eligible to borrow in subsidized loans.
