Federal Stafford Loan Information

This loan, which requires a separate application, is available to students who are U.S. citizens or permanent residents.

ll Federal Subsidized Stafford loan applicants must demonstrate financial need through a system approved for determining need for the Federal Family Education Loan Programs. (All applicants must submit the FAFSA Form.)

Medical students may borrow up to $8,500 per year, not to exceed a cumulative total of $65,500 (including undergraduate and graduate loans). Students who borrow in excess of the annual or aggregate Federal Stafford loan limits are ineligible to receive other Title IV funds.

The interest rate for new Federal Stafford loan borrowers is based on the 91-day U.S. Treasury Bill plus 1.7% during the in-school and grace period, and 2.3% during all other repayment periods. The maximum interest rate is capped at 8.25%. The rate is variable and adjusted annually.

Repayment begins six months after a student's enrollment status drops below half-time. The full repayment period may not exceed 10 years.

The lender will deduct a single insurance premium of up to 1% of the loan principal from each new Federal Stafford loan. State guarantee agencies will determine the percentage amount.

The lender will also deduct a 3.5% origination fee (proportionately) from each payment of the loan.

Any loan made for more than $1,000, and the period of enrollment exceeds six months, are disbursed in two or more installments, not to exceed ½ of the loan, with the period between the lst and 2nd installment being after 1/3 of the enrollment period has passed.

All borrowers must promptly notify the holder of the loan of any change of address or status.

A selected number of Federal Stafford loan applications from various lenders are available in the SFAO.

Deferment Provisions

A borrower whose first disbursement is made before July 1, 1993 will be able to receive a two-year deferment upon entering an accredited internship or residency program.

Deferment options for new borrowers whose first disbursement was made on or after

7/1/93 include:

- attending school at least half-time

- unemployed (up to 3 yrs.)

- experiencing economic hardship (up to 3 yrs.)

- study in an approved graduate fellowship or rehabilitation program for the disabled.

All borrowers should review the promissory note for additional deferment and forbearance options.