With the Stafford Loans, you borrow directly from a lender to help cover your educational expenses. These loans offer low interest rates and you don’t have begin paying them back until after you graduate or withdraw from classes. Along with the Federal PLUS Loans, the Stafford Loans make up the Federal Family Education Loan Programs (FFELP) (PDF).

Types of Stafford Loans
Maximum Loan Amounts
Applying for a Federal Stafford Loan

Types of Stafford Loans
Depending upon your level of financial need, you may be offered one of two types of Stafford Loan:

Subsidized Federal Stafford Loan
With the subsidized loan, the federal government pays the interest on your loan while you are enrolled and for six months after you graduate or withdraw from classes. Once the six-month grace period is over, you being paying the interest and principal on your loan.

• Who is eligible? Students who demonstrate financial need
• Interest rate? Fixed at 5.6%
• Other fees? 0.5% origination fee and a federal default fee of up to 1%
• Minimum monthly repayment? $50 (can be more depending on full amount borrowed)

Unsubsidized Federal Stafford Loan
With the unsubsidized loan, you are responsible for paying the interest on your loan; The federal government does not pay the interest as with a subsidized loan. You may begin paying the interest while you are still in school or add the interest to the total amount of your loan, which will you begin repaying after you leave school, graduate, or withdraw from classes.

• Who is eligible? Students who do not qualify for a Subsidized Federal Stafford Loan
• Interest rate? Fixed at 6.8%
• Other fees? 0.5% origination fee and a federal default fee of up to 1%
• Minimum monthly repayment? $50 (can be more depending on full amount borrowed)

Independent students, graduate students, and any dependent undergraduates whose parents are denied due to unsatisfactory credit, the students are automatically eligible for an additional Federal Unsubsidized Stafford Loan. First- and second-year students are eligible for an additional $6,000 and third- and fourth-year students are eligible for an additional $7,000 if the PLUS is denied. This unsubsidized loan amount is in addition to the loan limits for the Federal Subsidized and Unsubsidized Stafford Loan programs listed below.

Maximum Loan Amounts
Under the Federal Stafford (Subsidized and Unsubsidized) Loan Program, the maximum loan amounts students may borrow per year are as follows:

Applying for a Federal Stafford Loan
When you apply for financial aid, you’ll automatically be considered for one of these loans.

If you have not previously borrowed through the Federal Stafford Loan program, you must complete the Entrance Counseling and submit a completed Master Promissory Note (MPN) before funds can be credited to your student account. If you have submitted a MPN in a prior year while at HMC, you do not need to submit another MPN loan application.  From the Entrance Counseling Complete Page, select the "Log Out and Return to School Web Site" link.  You will be directed to About HMC's Lender Reference List.  Select the lender you have chosen and continue with the online application process to complete the Federal Stafford Loan Master Promissory Note (MPN).

Note:  If you borrowed a Federal Stafford Loan through the College Board, they will no longer make education loans and have sold their loans to Sallie Mae. Here is their contact information: Sallie Mae Education Trust (888) 272-5543 Lender Code: 802218

*Beginning the 2010-2011 academic year, Harvey Mudd College will be participating in the William D. Ford Federal Direct Loan Program (Direct Loans). Visit our website in June 2010 for more details. 

Last Updated: January 2010