An unsubsidized Stafford loan is a student loan for undergraduates that attend a qualified post-secondary institution.  The unsubsidized Stafford Loan is administered by the Department of Education, which is responsible for the Federal Family Education Loan (FFEL) and the William D Ford Federal Direct Loan Program.  Both the FFEL and Direct Loan program consists of loans known as the Stafford Loans.

Undergraduates attending a qualified post-secondary institution have the opportunity to have an unsubsidized Stafford loan.  The unsubsidized Stafford loan amount is based on your willingness the take out an additional loan to pay for school fees and expenses.  The unsubsidized Stafford Loan is not based on financial need and students are able to borrow loan funds beyond your subsidized loan amount even if you don't have demonstrated financial need. Your school will subtract the total amount of your other financial aid from your cost of attendance to determine whether you're eligible for an unsubsidized loan.
 

Unlike a subsidized loan, you are responsible for the interest from the time the unsubsidized loan is disbursed until it's paid in full. You can choose to pay the interest or allow it to accrue (accumulate) and be capitalized (that is, added to the principal amount of your loan). Capitalizing the interest will increase the amount you have to repay.

If you're a dependent undergraduate student each year you can borrow up to:

·        $5,500 (for loans first disbursed on or after July 1, 2008) if you're a first-year student enrolled in a program of study that is at least a full academic year.

·        $6,500 (for loans first disbursed on or after July 1, 2008) if you've completed your first year of study and the remainder of your program is at least a full academic year.

·        $7,500 (for loans first disbursed on or after July 1, 2008) if you've completed two years of study and the remainder of your program is at least a full academic year.

If you're an independent undergraduate student (and a dependent student whose parents have applied for but were unable to get a PLUS Loan (a parent loan)), each year you can borrow up to:

·        $9,500 (for loans first disbursed on or after July 1, 2008) if you're a first-year student enrolled in a program of study that is at least a full academic year.

·        $10,500 (for loans first disbursed on or after July 1, 2008) if you've completed your first year of study and the remainder of your program is at least a full academic year.

·        $12,500 (for loans first disbursed on or after July 1, 2008) if you've completed two years of study and the remainder of your program is at least a full academic year.

For both the Direct Loan and FFEL programs, you'll be paid through your school in at least two installments. No installment may exceed one-half of your loan amount. Your loan money must first be applied to pay for tuition and fees, room and board, and other school charges. If loan money remains, you'll receive the funds by check or in cash, unless you give the school written authorization to hold the funds until later in the enrollment period.

Generally, if you're a first-year undergraduate student and a first-time borrower, your school cannot disburse your first payment until 30 days after the first day of your enrollment period. This practice ensures you won't have a loan to repay if you don't begin classes or if you withdraw during the first 30 days of classes.

For all unsubsidized Stafford loans first disbursed on or after July 1, 2006, the interest rate is fixed at 6.8%. 


SubsidizedStaffordLoan.org / PrivateCollegeLoan.org / PrivateSchoolLoans.org
FederalDirectLoans.net / FederalStaffordStudentLoan.com / StaffordLoan.org