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Federal Direct Stafford Loan

Low interest federal loans are available to assist eligible students who are enrolled at least half-time.

 

When should I begin the application process for 2013-2014?

Students should wait until they have an award letter that confirms eligibility for subsidized and/or unsubsidized Stafford loans as well as the amounts.

  • New students should already have an award letter and are eligible to begin the loan process in late May.

  • Returning student award letters are sent beginning in early-June.

  • Click the "Apply Now" link at the bottom of this page to begin the loan request process.

General Requirements for the Federal Stafford Loan

  • Student borrowers applying for a Federal Stafford Loan must be U.S. citizens or eligible non-citizens.

  • Students must be enrolled at least halftime in a degree seeking program.

  • Students applying for a Stafford Loan must complete the Free Application for Federal Student Aid (FAFSA) each year.

Subsidized Federal Stafford Loans

Students that meet certain financial need criteria may qualify for a Subsidized Federal Stafford Loan. The federal government pays the interest on the subsidized loan while students are enrolled at least half time and when they qualify for an authorized deferment.  Interest subsidies no longer apply during grace periods.

Unsubsidized Federal Stafford Loans

Students who do not qualify for a Subsidized Stafford Loan may be eligible for an Unsubsidized Stafford Loan. The federal government does not pay the interest on an unsubsidized loan. Students have the option of paying the interest while they are in school, or they can choose to have the interest added to their principal balance through a process called capitalization, thus increasing the amount to be repaid.

Federal Stafford Annual Loan Limits

  Dependent
(Annual Limit)
Independent
(Annual Limit)
All Students
(Maximum Subsidized Limit)
First Year $5,500 $9,500 $3,500
Sophomore $6,500 $10,500 $4,500
Junior / Senior $7,500 $12,500 $5,500
Note: Dependent students whose parent has been denied a PLUS Loan may be eligible for additional Unsubsidized Stafford Loans. Contact the Financial Aid Office for details.

Loan Fees

The Subsidized and Unsubsidized Federal Direct Stafford Loans have a 1.051% origination fee that will be deducted from the gross amount of the loan at the time of disbursement.  (Due to the government sequester, the origination fee will increase to 1.072% for NEW loans with a first disbursement on or after December 1, 2013.)

Interest Rates

The interest rate on Subsidized and Unsubsidized Federal Direct Stafford Loans is fixed at 3.86% (for loans disbursed after July 1, 2013). 

Loan Disbursement

  • Paid in two disbursements: The first at the beginning of the loan period and the second halfway through the loan period. Typically, disbursements occur in late August and again in late January (approximately 10 days before the start of each semester).
  • Proceeds are applied to any outstanding educational charges including tuition, fees, housing and meals. The Financial Aid Office will notify the borrower when the disbursement is credited. If there is a credit balance DePauw University will issue a refund to the borrower.

Repayment Terms

After you graduate, leave school, or drop below half-time enrollment, you will have a six-month “grace period” before you begin repayment.  You typically have 10 years to repay your Stafford loan. There are no prepayment penalties on a Stafford loan.

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