These are both subsidized and non-subsidized loans, such as Stafford Loans. Subsidized loans are need-based; the federal government pays the interest on these loans while a student is enrolled. Non-subsidized loans are not need-based and interest begins to accrue from the time of disbursement. Students are not required to supply parental financial information for Title IV Funds.
- Subsidized Federal Stafford Loans are processed by banks, lenders, and other state agencies upon the school’s certification of a student’s eligibility. Your responsibility for making interest payments will not begin on subsidized loans until you graduate or drop to less than one-half time enrollment, or after a grace period (usually six months), at which point you begin repayment. You must demonstrate a need for the federally subsidized portion of these loans. The maximum amount of available funds through a subsidized Stafford Loan is $8,500 per year.
- Non-subsidized Federal Stafford Loans are available if you cannot meet your expected share of educational costs, if you have no eligibility for need-based aid, or you desire all aid available to meet your financial need as determined by the Financial Aid Office. Interest on a non-subsidized loan begins to accrue from the date of disbursement, therefore, you are encouraged to carefully consider how much money is needed before making application. The maximum abount of available funds through the non-subsidized Stafford Loan is $32,000 per year.
The program maximum for Stafford Loans, subsidized and non-subsidized, is $40,500 per year. If you do not qualify for the $8,500 subsidized loan, or you want all the aid you can receive, non-subsidized Stafford Loans may be used to meet the cost of education, up to annual the $40,500 limit. However, you must be aware that the amount of federal aid may never exceed the cost of education established by the school.
If you are considered an out-of-state resident for tuition purposes, you will exhaust total Stafford Loan eligibility before meeting the total cost of education. Commercial alternative loans are available to you in this situation. Staff in the Financial Aid Office can advise you regarding these loans.