Federal Stafford Loans
Federal Direct Stafford Loans are awarded to all students who complete a FAFSA, meet eligibility requirements, submit all required documentation, and are enrolled at least half-time. This loan is borrowed by the student and no credit check is required. Students may be offered a Subsidized and/or Unsubsidized Direct Stafford Loan based on financial need, which is evaluated using the data reported on the FAFSA.
With a Subsidized Loan, the federal government pays the interest on the loan while the student is in school at least half-time and during authorized periods of deferment.
For Unsubsidized Loans, students are charged interest from the time the loan is disbursed until it is paid in full. Borrowers may choose to pay the interest while they are in school, or defer payments until the end of their grace period. Any accrued interest will be capitalized and added to the principal amount of the loan at repayment, increasing the amount that must be repaid. If students choose to pay the interest as it accumulates, the long term cost of the loan will be less.
Repayment on Federal Direct Student Loans begins six months after a student graduates, withdraws, leaves school, or drops below half-time status. Interest rates on Federal Direct Loans are fixed. For undergraduate students, both subsidized and unsubsidized loans disbursed on or after July 1, 2012 will have an interest rate of 6.8%. Subsidized and unsubsidized Federal Direct Loans are subject to a 1% federal origination fee which is subtracted from the loan at the time of disbursement.
Loan Limits
The maximum loan amount for which a student may receive in the Federal Direct Student Loan Program (subsidized and/or unsubsidized) is determined by the student’s grade level.
Grade level is determined based on the number of credits a student has completed.
| Freshman | (0-29 credit) | |
| Sophomore | (30-59 credits) | |
| Junior | (60-89 credits) | |
| Senior | (90 + credits) |
The following annual maximums apply to undergraduate students.
| Freshman | $5,500 ($3,500 subsidized) | |
| Sophomore | $6,500 ($4,500 subsidized) | |
| Junior | $7,500 ($5,500 subsidized) | |
| Senior | $7,500 ($5,500 subsidized) |
Additional Federal Direct Unsubsidized Loan
The additional unsubsidized loan is available to students who are either classified as “independent” according to federal guidelines, or whose parents are denied the PLUS Loan by the Department of Education during the application process. Additional unsubsidized loan amounts are as follows:
| Freshman and Sophomore | $4,000 | |
| Junior and Senior | $5,000 |
Lifetime Limits
The following aggregate maximums apply to undergraduate students.
| Without Additional Direct Unsubsidized | $31,000 ($23,000 subsidized) | |
| With Additional Direct Unsubsidized | $57,500 ($23,000 subsidized) |
CLU reviews aggregate loan limits prior to awarding loans for the academic year. Students can check the amount of loans they have taken out during their academic careers through the National Student Loan Data System (NSLDS).
Click here to read more about IMPORTANT UPDATES to the Direct Loan Program effective July 1, 2012
