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Federal Stafford Loans
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 NC Advantage (Borrower
Benefits)
See how much and how you save with our loans. |
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Stafford Loans are low-interest loans made to students.
The interest rate for Federal Stafford Loans made on or after July 1, 2006 is fixed for the life of the loan and is set based upon the date the loan is made (details below). See how much you can lower your rate at repayment with our NC
Advantage!
The Federal Stafford Loan is the most widely used loan in the
student education loan program because of its low interest rate and wide availability. Repayment terms are up to 10 years.
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| A Subsidized
Stafford Loan is available to students who have financial need. An
Unsubsidized Stafford Loan is an option for students who do not
demonstrate financial need.
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Subsidized Stafford Loan
For the student with financial need, the federal government pays the
interest on the subsidized loan while the borrower is enrolled in
college at least half-time and for six months after enrollment
stops. At the end of the six-month grace period, the borrower becomes
responsible for the loan interest and repayment.
The table below shows the fixed interest rate on Subsidized Stafford Loans set by federal statute and based on the date the loan is made through 2012.
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The amount of Federal Stafford loan students may borrow depends on their grade level in school, program length,
amount of other financial aid received, dependency status, and --
in the case of the subsidized Stafford Loan -- the amount of financial need.
Loan Limits
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| Date Made | Fixed Interest Rate |
| | Undergraduate | Graduate |
| July 1, 2006 - June 30, 2008 | 6.8% | 6.8% | |
| July 1, 2008 - June 30, 2009 | 6.0% | 6.8% | |
| July 1, 2009 - June 30, 2010 | 5.6% | 6.8% | |
| July 1, 2010 - June 30, 2011 | 4.5% | 6.8% | |
| July 1, 2011 - June 30, 2012 | 3.4% | 6.8% | |
| July 1, 2012 | 6.8% | 6.8% | |
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Unsubsidized Stafford Loan
Student borrowers with no financial need are eligible for Unsubsidized Stafford Loans. Interest on these loans is not paid by the federal government and is the responsibility of the student at all times. Borrowers can either pay the interest while they are enrolled or have it added to the loan principal. Delaying the interest payment by adding to principal, however, will increase the cost of the loan. Repayment of the principal begins six months after the student is no longer enrolled.
The fixed interest rate is 6.8% for Unsubsidized Stafford Loans made on or after July 1, 2006.
Loan Limits
To borrow a Stafford Loan from College Foundation, Inc. (CFI), the prospective borrower must have a North Carolina Connection as well as meet federal loan requirements. The required connection is established by meeting at least one of the following:
You are:
- A resident of North Carolina; or
- Enrolled, or accepted for enrollment, at a North Carolina college or university eligible to participate in the Federal Family Education Loan Program; or
- A previous CFI borrower; or
- A current or former participant or beneficiary in the North Carolina 529 college savings plan; provided that, the savings account was active on or before June 1, 2008 and not closed due to a rollover to another qualified tuition program.
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How do new borrowers apply for a Stafford Loan?
The first step is to complete the Free Application for Federal Student Aid (FASFA) and have your
results sent to the financial aid offices of the schools to which you are applying. Each financial
aid office then determines if you are eligible for a subsidized or unsubsidized Stafford loan and,
if so, includes this recommendation and loan amount in your financial aid award package. |
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| Once you make your school choice and accept its financial aid offer,
the school can certify you as eligible for a Stafford Loan. You must then
complete a loan application (the Master Promissory Note) with a lender in order to get your loan.
Many schools provide you with a list of lenders to consider; you may select one from the list or any
other lender you prefer. Once you choose a lender, follow the directions from your school on how to
complete the loan process. Please note: some colleges participate only in the Federal Direct Loan
Program which might mean you do not have a choice of lender. Ask your financial aid office to
clarify their financial aid process. |
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| If you do have a choice of the lender for your Stafford Loan,
be sure you ask questions
before you decide. For example: |
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Does the lender offer borrower benefits to save you money on your loan?
Does your lender sell its loans or provide service throughout the life of your loan?
How does the total cost of the loan compare with loans from other lenders?
Other questions to ask. |
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Nondiscriminatory Policy
All student financial assistance is awarded on a nondiscriminatory
basis without regard to race, color, religion, national origin, sex,
marital status, disability, sexual orientation, veteran status, age
(with the exception that borrowers must be at least 17 to enter into
loan contracts under North Carolina law), or any other protected
characteristics established by law.
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