Answers for Federal Stafford Loan FAQ
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Am I eligible for a federal Stafford Loan? |
Undergraduate, graduate, and professional students are eligible for the federal Stafford Loan program if they meet the general eligibility requirements as determined by the FAFSA, are enrolled or expect to be enrolled at least half time as a degree seeking student, meet satisfactory academic progress, and are not currently in default of any previously disbursed Stafford Loan. |
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How do I apply for a federal Stafford Loan? |
In order to be considered for a federal Stafford Loan, students must complete the following steps:
- Answer yes to student loans on question 31 when you submit your FAFSA and complete any additional follow-up paperwork our office may require.
- Confirm a Stafford Loan lender using VIP.
- If you are a new borrower, read and sign a Master Promissory Note with your chosen lender.
- If you are a new borrower, read and complete Entrance Loan Counseling
For more information, click here. |
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What determines whether the loan I am awarded is subsidized or unsubsidized? |
To qualify for a Subsidized Federal Stafford Loan, a student must have unmet financial need after all other gift aid is awarded. Financial need is determined as the estimated Cost of Attendance for the award period you are attending minus your Expected Family Contribution for the same period. Gift aid is normally considered to be any assistance program a student may receive as payment toward educational expenses that doesn’t require future repayment, such as scholarships and grants. A student who has no remaining financial need may then qualify for an unsubsidized Stafford Loan. |
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What is the interest on a Federal Stafford Loan? |
Currently, the interest rate is fixed at 6.0% for undergraduate subsidized Stafford Loans borrowed on/after July 1, 2008, and 6.8% for graduate Stafford and Unsubsidized Stafford Loans. For undergraduate subsidized Stafford Loans borrowed on/after July 1, 2009, the interest will decrease to 5.6%. For more information about the interest rate on loans you may have previously borrowed, please contact your lender. |
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Are there any fees to use a Federal Stafford Loan? |
Some lenders may charge loan fees up to 2% of your disbursement amount. This rate varies by lender and is subject to change. Please note that prior to disbursement, the loan amount listed on your account does not necessarily reflect loan fees deducted from your disbursement by your lender. For example, if your award is $1,000 and your lender assesses a 2% loan fee, the net disbursement will be $980. |
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How much can I borrow? |
Federal Stafford Loan Limits (EFFECTIVE JULY 1, 2008)
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Freshman
(0-29 credit hours) |
Sophomore
(30-59 credit hours) |
Junior/Senior
(60+ credit hours) |
Aggregate Limit
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Dependent Undergraduate |
$5,500, no more than $3500 of which can be subsidized
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$6,500, no more than $4500 of which can be subsidized |
$7,500, no more than $5500 of which can be subsidized |
$31,000, no more than $23,000 of which can be subsidized |
Independent Undergraduate(and Dependents with PLUS Denials)
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$9,500, no more than $3500 of which can be subsidized |
$10,500, no more than $4500 of which can be subsidized |
$12,500, no more than $5500 of which can be subsidized |
$57,500, no more than $23,000 of which can be subsidized |
Graduate students may borrow $20,500 annually, no more than $8500 of which can be subsidized. The graduate aggregate loan limit is $138,500, no more than $65,500 of which can be subsidized.
Please note that the University of South Carolina encourages students to borrow responsibly. Visit this loan repayment calculator to learn what you may expect your payments to be.
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Do I need to choose a lender and how do I go about it? |
Many banks and other lending institutions participate in the Federal Family Education Loan Programs and students have the right to choose their lender. Since these are federal loans, the federal government controls the interest rate and eligibility criteria, so the interest rate, amount of eligibility, and repayment terms will be the same no matter which lender you pick.
Beginning with the 2008-09 academic year, the University of South Carolina began requiring students to chose their Stafford Loan lender via VIP. There we provide students more information about lender selection and some suggestions of lenders that USC students have used in the past. It is important that you read the provided information and select carefully because when you accept a loan, you are committing to a relationship that may last up to 30 years.
You have the right to select any U.S. Department of Education approved lender even if they do not appear on the list on VIP. You also have the right to cancel your loan or to make early payments without penalty. When selecting a lender, some of the things you may want to consider are the total cost of the loan, incentives for on-time repayment, and the efficiency and quality of service the lender provides.
As a final caution, please keep in mind that due to future market conditions, your lender could decide to suspend any of its programs or discontinue/change any of the benefits it may offer. You are responsible for selecting a lender. Your lender, rather than the University of South Carolina, is solely responsible for any programs or discounts the lender offers. |
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I'm a returning student. Who is my lender? |
If you are a continuing borrower, you may return to the Lender Selection area on VIP and view your previous lender.
If you are a continuing student who has received a loan in the past or you are a transfer student who had received a Stafford Loan at another school, you may review your loans at the student access website for the National Student Loan Data System. |
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I want to change my lender. How can I do that? |
If you have already made your Stafford Loan lender choice via VIP and wish to change your choice, you will need contact the Office of Student Financial Aid and Scholarships.
Please keep in mind that in most cases it is beneficial to the student to remain with a single lender. This will ease your repayment of the loan in the future For more information, visit VIP. |
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What is the Master Promissory Note and how do I sign it? |
The Master Promissory Note is a binding, legal document outlining the terms and conditions of the loan. If you are a first time borrower, or if you are changing your lender, you must sign a promissory note with your lender before the funds will be disbursed. To learn more, click here. |
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What is Entrance Loan Counseling and do I need to do it? How do I complete it? |
Entrance Loan Counseling is a process that will explain your rights and responsibilities as a new Stafford Loan borrower. If this is your first time receiving a Stafford Loan, then you may click here to complete Entrance Loan Counseling. |
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| How will my loan be issued? |
According to federal regulations, your Stafford Loan must be issued in multiple disbursements during the academic year. If you plan to enroll for both fall and spring, your loan will be issued in two equal disbursements (one disbursement per term). If you plan to enroll for only one term, either fall or spring, your Stafford Loan will be issued to you in one disbursement, the amount to be determined by your eligibility. |
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VIP says my check is not here. Can I still pay my bill? |
Yes. Once your Stafford Loan has been awarded, the University of South Carolina will advance you the aid to pay your bill via VIP and that advance will be paid off once your lender disburses the funds on the established disbursement dates. |
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How do I change my loan amount? |
The University of South Carolina will award your Stafford Loan to the maximum of your eligibility. If you chose to decline your loan or wish to request a lower amount, you must indicate this choice on your award letter, available on VIP, and return it to the Financial Aid Office. You may also send your request via e-mail to our office at uscfaid@mailbox.sc.edu. |
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I will only take one class this semester. Can I still get a Stafford Loan? |
| To be eligible for a federal Stafford Loan, both graduate and undergraduate students must be enrolled in at least six hours in a degree seeking program |
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I graduate in December. What happens to my loans? |
For seniors in their final semester, the federal Stafford Loan must be prorated based on enrollment and the spring disbursement cancelled.
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What will happen if I change class rank during the academic year? |
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If you change rank during the academic year, you may be eligible for additional Stafford Loan funds. If you change rank from a freshman to a sophomore, from a sophomore to a junior, or from an undergraduate to a graduate student during the academic year, and you wish to be considered for additional loan funds, please contact our office
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When do I need to begin paying back my loans? |
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Repayment of the federal Stafford Loan program will begin six months after graduation or after dropping below half-time status.
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I've borrowed Stafford Loans before. How much do I owe? |
You may review your loans at the student access website for the National Student Loan Data System. You may also visit loan repayment calculator to learn what you may expect your payments to be.
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Can I consolidate my loans? |
Repayment of the federal Stafford Loan program will begin six months after you graduate or drop below half time status. An option to combine your separate Stafford Loans under one repayment exists with the federal Loan Consolidation program. There are pros and cons associated with loan consolidation.
Before deciding that consolidation is for you, be sure to consider the cost and weigh the benefits. While it can simplify loan repayment and lower your monthly payment, it can also significantly increase the total cost of repaying your loans. Consolidation offers lower monthly payments by offering you up to 30 years to repay your loans. You'll make more payments and pay more in interest. In fact, in some situations consolidation can double your total interest expense. If you don't need monthly payment relief, you should compare the cost of repaying your unconsolidated loans against the cost of repaying a consolidation loan.
Click here for a consolidation loan checklist.
Click here to learn more about consolidation
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