Stafford Loan Program: What Is the Max?

Stafford Loan Program: What Is the Max?

Direct Stafford loans, that are supplied by means of the William D. Ford Federal Direct Loan program, are the essential constructing block of most students’ monetary assist packages. Students utilizing Stafford loans can usually borrow a big amount of cash no matter their monetary want, for each undergraduate and graduate college applications.

The rate of interest and phrases for Stafford loans can fluctuate relying on whether or not the loans are backed or unsubsidized, however in both situation, they characterize the most effective decisions for borrowing to pay school prices.

Borrowing Limits

Stafford loan limits are based mostly on whether or not a student is taken into account a dependent and their yr at school. The most loan quantities are outlined within the charts beneath.

Year Dependent Independent
Freshman (0-29 credit hours)  $5,500 ($3,500 backed, $2,000 unsubsidized) $9,500 ($3,500 backed, $6,000 unsubsidized)
Sophomore (30-59 credit hours) $6,500 ($4,500 backed, $2,000 unsubsidized)  $10,500 ($4,500 backed, $6,000 unsubsidized) 
Junior/Senior (60+ credit hours) $7,500 ($5,500 backed, $2,000 unsubsidized)  $12,500 ($5,500 backed, $7,000 unsubsidized) 
Graduate/Professional Not relevant $20,500 (all unsubsidized)

Dependent students who weren’t capable of safe a PLUS loan for added funds can borrow cash as much as the unbiased student loan quantity. Additionally, there’s a lifetime restrict on Stafford loans—at present capped at $31,000 for dependent students, $57,500 for unbiased students, and $138,500 for graduate students.

Aggregate Maximum Subsidized Loan Limit Aggregate Maximum Unsubsidized Loan Limit Total
Dependent Students  $23,000 $8,000 $31,000
Independent Students $23,000 $34,500 $57,500
Graduate Students  $65,500 $73,000 $138,500

Subsidized vs. Unsubsidized

With a backed Stafford Loan, the federal authorities pays the curiosity on the loan whereas a student remains to be at school. In different phrases, the loan worth has nothing added to its authentic quantity till after you graduate. Subsidized loans can be found based mostly on monetary want.

Students who do not qualify for a backed loan can nonetheless obtain an unsubsidized loan however will accrue curiosity whereas they’re nonetheless at school. However, they don’t have to start repaying the loan till after they graduate, and their six-month grace interval has ended.

The quantities of backed loans a student can obtain are restricted to the dependent maximums listed above. For instance, the utmost backed loan quantity for a freshman student can be $3,500. Any extra Stafford loans acquired, as much as the freshman yr most of $9,500, can be unsubsidized.

Graduate students will not be eligible to obtain backed loans.

Interest Rates and Fees

The Federal Student Aid web site maintains and usually updates details about the present rates of interest for federal student loans. It’s necessary to verify it often as a result of the charges charged will fluctuate by loan and borrower sort. As an instance, for loans with disbursement between July 1, 2020, and July 1, 2021, the speed for direct backed and unsubsidized undergraduate loans is 2.75%, whereas the speed for graduate {and professional} applications is 4.30%.

In addition to the curiosity paid on a Stafford loan, there’s additionally a loan charge. For loans with a primary disbursement date on or after October 1, 2019, and earlier than October 1, 2020, the loan charge is 1.059% of the entire loan quantity. If on or after October 1, 2020, and earlier than October 1, 2021, the charge is 1.057%. This charge is partially deducted from every disbursement verify.


Repayment of all Stafford Loans begins six months after a student both graduates, drops out, or drops beneath half-time standing. During this six-month grace interval, curiosity doesn’t get added onto a backed loan however accrues for unsubsidized loan balances. Stafford Loans assist you to select a reimbursement plan from the next choices:

  • Standard: Fixed funds that be certain your loans are paid off inside 10 years.
  • Graduated: Payments start decrease after which progressively improve with time (typically each two years). Loans are supposed to be paid off inside 10 years.
  • Extended: Payments may be mounted or graduated and supposed to be paid off inside 25 years.
  • Income-Based: Payments will both be 10% or 15% of your discretionary revenue. However, funds could by no means be greater than somebody would have paid on a Standard Repayment Plan. The fee quantity shall be recalculated every year based mostly on household dimension and revenue.


Regardless of whether or not or not you’re making use of for a backed or unsubsidized Stafford Loan, you have to fill out a FAFSA kind. Once accomplished, the FAFSA kind is forwarded to your college, who will then inform you of your loan eligibility and lender choices. When you settle for the loan, you’re required to signal a grasp promissory be aware earlier than any funds may be disbursed.

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