Unsubsidized Stafford Loans - the Federal Loan Solution for All Students
Unsubsidized Stafford Loans are federal Stafford Loans offered to undergraduate and graduate students, regardless of financial need. In order to apply for an unsubsidized Stafford Loan you must complete and submit the government's FAFSA (Free Application for Federal Student Aid) form.
Unsubsidized undergraduate school loans are not awarded to students based on need. Consequently these loans require borrowers to pay any interest that accumulates on their loans while in school, during periods of deferment and during grace periods. Interest on subsidized federal student loans, on the other hand, is paid by the U.S. government during those same time periods. For both types of federal loans, borrowers are allowed to defer any payments until after they graduate. This assumes that students remain in approved programs on a half time or full time basis.
- Borrow the entire cost of undergraduate education
- Defer Payment until after Graduation
- Co-signer release upon qualification
- Up to 0.25% interest rate reduction.
As a dependant student, the maximum allowable debt from all Stafford Loans upon graduation is $23,000 (for the 2007-2008 school year). Annual limits, which include both the subsidized and the unsubsidized Stafford Loan are as follows:
- $3,500 in the first year
- $4,500 in the second year
- $5,500 in the third year
- $5,500 in the fourth year
If you're an independent student the approved Stafford Loan limit over the course of your studies is $46,000. This total also includes both the subsidized and the unsubsidized Stafford Loan. The annual limits are:
- $7,500 in the first year
- $8,500 in the second year
- $10,500 in the third year
- $10,500 in the fourth year
Note that students who qualify for a subsidized Stafford Loan may be able to borrow additional monies over the subsidized amount as unsubsidized Stafford Loans. Together the loan amounts for subsidized and unsubsidized Stafford Loans cannot exceed the amounts indicated above.
In addition to your EFC score, eligibility requirements for the unsubsidized Stafford Loan are as follows. You must:
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- Be a United States citizen or an eligible noncitizen with a valid social security number
- Be working toward a degree or certificate in an eligible program
- Have a high school diploma, GED or pass an approved ability-to-benefit (ABT) test
- Register with the Selective Service if you're a male between 18 and 25
- Maintain satisfactory academic progress
Although you'll be fully responsible for the interest on your Unsubsidized Stafford Loan, at 6.8% (for the 2007-2008 school year) it's still a great financing solution. And don't forget that there are many other student loans for undergraduate students like private or alternative student loans available to help you finance your college career.