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St. Cloud State University

St. Cloud State University

Office of Scholarships and Financial Aid
Types of Financial Aid - Federal

Stafford Loan

The federal Stafford Loan is a guaranteed student loan, which may be subsidized, unsubsidized, or both. Currently St. Cloud State University (SCSU) participates in the Federal Family Education Loan (FFEL) Program in which students select a lender, most commonly from a school's lender list. Under the FFEL Program, students may choose any lender they desire to process their Stafford loan. The lender and a guarantee agency may deduct an origination fee and a default aversion fee from the loan prior to disbursement.

Beginning in Fall 2009, St. Cloud State University (SCSU) will participate exclusively in the William D. Ford Federal Direct Loan Program which means that students will apply for and receive their loan funds directly from the U.S. Department of Education rather than through a private lender.

Summer 2009

Academic Year 2009-2010

The subsidized Federal Stafford Loan is a need-based loan. The federal government pays the interest on the subsidized loan while you are in school at least half-time (6 credits) and during the 6 month grace period. You can borrow up to your financial need as determined by the federal financial aid formula or up to the program maximum, whichever is less.

The unsubsidized Federal Stafford Loan is similar to the subsidized loan except the federal government does not pay the interest while you are enrolled. You are responsible for paying all of the interest that accrues on this loan during the in-school period, the grace period, and periods of repayment or deferment. The interest may either be paid periodically or capitalized and added to the principal amount of the loan.

The current fixed interest rates for undergraduate students are 6.0% for the subsidized Stafford Loan and 6.8% for the unsubsidized Stafford Loan. Graduate students have a 6.8% interest rate for both the subsidized and unsubsidized Stafford Loan. Effective July 1, 2009 the subsidized loan interest rate for undergraduate students will be 5.6%

Stafford Loan Limits

Stafford Loan Limits per Grade Level Dependent Student Independent Student
Grade level 1 (0-29 semester credits completed) $5,500 $9,500
Grade level 2 (30-59 semester credits completed) $6,500 $10,500
Grade levels 3 or 4 and 5 (post-baccalaureate) $7,500 $12,500
Grade levels 6 or 7 (graduate student) $8,500 $20,500

Maximum Aggregate Limits

The maximum aggregate Stafford Loan limits are specified by federal law. Federal regulations also stipulate that a student cannot receive financial aid in excess of the cost of attendance. Therefore, some students are not able to borrow the full amounts listed.

  • Dependent Undergraduate: $31,000 (only $23,000 subsidized)
  • Independent Undergraduate: $57,500 (only $23,000 subsidized)
  • Graduate and Professional Students: $138,500 (only $65,500 subsidized)

Loan Counseling

All borrowers under the Stafford Loan and Direct Loan programs are required to complete loan entrance and exit counseling.

Entrance Counseling

Summer 2009: If you have not previously borrowed under the Stafford Loan (FFEL) program, you must complete loan entrance counseling before the first loan disbursement can be made. Loan entrance counseling takes approximately 15 minutes and provides a good overview of your rights and responsibilities as a student borrower.

Fall 2009: If you have not previously borrowed under the Direct Loan program, you must complete loan entrance counseling before the first loan disbursement can be made. Loan entrance counseling takes approximately 15 minutes and provides a good overview of your rights and responsibilities as a student borrower. If you have previously borrowed and completed entrance counseling under the FFELP Program, you are not required to complete entrance counseling again. Only new borrowers in Fall 2009 are required to complete entrance counseling.

Exit Counseling

If you graduate, withdraw, or enroll less than half-time (6 credits), you must complete loan exit counseling. The loan exit counseling takes approximately 25 minutes and will help you understand your loan repayment terms and options.

Loan Proration

Students graduating within the academic year and attending less than a full academic year are required by federal law to have their Stafford Loan amount prorated. Example: A senior graduating after fall semester cannot receive more than $2,750 (one-half of the annual $5,500) in a subsidized Stafford loan.

Stafford Loan Repayment

Repayment begins 6 months after you graduate, withdraw, or enroll less than half-time (6 credits). Minimum monthly payments of $50 are made to the lender and may increase depending on the total amount borrowed.

At times, personal situations may make it difficult for students to repay their student loan. In such cases, you may be eligible for a loan deferment that allows you to postpone payment of principal for a specific period of time. To arrange a deferment, contact your lender regarding eligibility and deferment forms. Additional information on loan repayment may be found at Federal Student Aid (http://studentaid.ed.gov/PORTALSWebApp/students/english/index.jsp).

Teacher Loan Forgiveness

The Teacher Loan Forgiveness Program is intended to encourage individuals to enter and continue in the teaching profession. Information may be found at the federal Student Aid on the Web at http://studentaid.ed.gov/PORTALSWebApp/students/english/cancelstaff.jsp

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