Stafford Loans
Federal Stafford loans are the most commonly borrowed student loans. Loans are a form of financial aid that must be repaid, with interest. Federal Stafford loans are long-term loans with no payment required while the student is in school or during their six-month grace period.
Based on recent developments in the lending industry and further anticipated changes, UTSA has made the decision to move to direct loans in order to make the process as easy as possible by eliminating further obstacles that may hamper students' attempts to borrow Stafford Loans. All new students accepted in spring 2009 forward must accept Stafford Loans through the Direct Loan Program. All UTSA students, both new and continuing, will accept Stafford Loans through the Direct Loan Program beginning fall 2009.
Types of Stafford Loans
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Subsidized Stafford Loan-
- Are loans based on need as established by the school's cost of attendance. The U.S. Department of Education pays the interest while you are in school at least half time, for the first six months (grace period) after you leave school, and during a period of deferment (meaning a postponement of loan payments). The amount of your subsidized loan cannot exceed your financial need.
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Unsubsidized Stafford Loan-
- Are loans that are non-need based and can assist students in meeting educational costs. The student is responsible for the interest payments from the time the loan is disbursed until it is paid in full. You have the option to pay the interest as you continue to attend school or let the interest accumulate and let it be added to the principal amount of your loan. This means that the interest will be “capitalized” and the total amount you repay will be higher than if you paid the interest all along.
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Due to a recent change in federal law related to the annual Stafford loan limits, undergraduate students enrolled as regular students in eligible undergraduate programs may now be entitled up to an additional $2,000 in unsubsidized Stafford loan money.
Interest Rates
The Federal subsidized Stafford Loan interest rate is 6.0% for the 2008-2009 academic year. The unsubsidized Stafford Loan interest rate is 6.8%.
For the 2009-2010 academic year the undergraduate subsidized interest rate is 5.6%. The subsidized graduate is 6.8% as well as the unsubsidized undergraduate or graduate.
For Stafford Loans first disbursed between July 1, 1998 and June 30, 2006, the interest rate is variable (adjusted annually on July 1st) but will not exceed 8.25 percent. (You'll be notified any time the variable rate changes.)