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Federal Direct Stafford Loans

Federal Direct Stafford Loans are federal loans for undergraduate and graduate students. Student applicants must meet eligibility requirements, as described on the Applying and Eligibility page, to receive federal student aid and meet satisfactory academic progress requirements. The Federal Direct Stafford Loans are a form of aid that must be repaid by the student borrower. Federal Direct Stafford Loans are either subsidized or unsubsidized.

Subsidized vs. Unsubsidized
A subsidized loan is awarded based on financial need. The federal government "subsidizes" (pays) the interest during at least half time enrollment period.

An unsubsidized loan is not awarded on the basis of need. The borrower will be charged interest from the time the loan is disbursed until it is paid in full by the borrower. If the borrower chooses not to make interest payments and allows the interest to accrue (accumulate) while in-school or during other periods of nonpayment, the interest will be capitalized. This means the interest will be added to the principal amount borrowed and additional interest will be based on that higher amount.

Federal Direct Stafford Loans Overview

How to Apply

1. Student must complete the Free Application for Federal Student Aid (FAFSA).
2. Once the student receives a Financial Aid Award, the student must accept the Federal Direct Stafford Loan(s) via My Banner in accordance with the instructions provided on the Financial Aid Award.
3. After accepting the Federal Direct Stafford Loan(s), the student must complete Entrance counseling and sign a Master Promissory Note.  
       

*Need help? Click here for detailed step-by-step instructions.

Interest Rate

For loans first disbursed on or after July 1, 2017 and prior to June 30, 2018

Subsidized Stafford loans for Undergraduates: 4.45% fixed

Unsubsidized Stafford loans for Undergraduates: 4.45% fixed

Unsubsidized Stafford Loans for Graduate/Professional Students: 6.0% fixed

For loans first disbursed on or after July 1, 2016 and prior to June 30, 2017:

Subsidized Stafford loans for Undergraduates: 3.76% fixed

Unsubsidized Stafford loans for Undergraduates: 3.76% fixed

Unsubsidized Stafford Loans for Graduate/Professional Students: 5.31% fixed

Additional Loan Fees

For loans first disbursed between October 1, 2016 and before October 1,2017:

Origination Fee: 1.069%

For loans first disbursed between October 1, 2017 and before October 1, 2018 :

Origination Fee: 1.066%

Credit Requirements

None

Annual Loan Maximums

See Federal Direct Stafford Loan Annual Limits.

Aggregate Loan Maximum

See Federal Direct Stafford Loan Aggregate Limits.

Enrollment Requirement

Student must be enrolled at least half-time (at least 6 undergraduate credit hours for undergraduates and at least 3 graduate credit hours for graduate students).

Disbursement

For a given term, loan funds are disbursed beginning on the Monday of week three (provided all requirements are complete). Funds are applied directly to the student's account. If the student's account is paid in full and any Federal Direct Stafford Loan funds remain a refund will be issued to the student.  Contact the Business Office at businessoffice@otterbein.edu or 614.823.1150 for questions.

Grace Period

Six months.

Minimum Monthly Payment

$50

Maximum Repayment Period

10 to 25 years depending upon your repayment plan. Visit the U.S. Department of Education's Federal Direct Loans website for more information.

Deferment/Forbearance

A Federal Direct Stafford Loan borrower may receive a deferment while he or she is enrolled on at least a half-time basis. Deferment/forbearance may be available under other circumstances.*

Federal Loan Consolidation

Available under certain circumstances. Visit the Federal Direct Loan Consolidation website for more information.

*Contact Direct Loan Borrower Services at (800) 848-0979 or visit the StudentLoans.gov

Federal Direct Stafford Loan Annual Limits

Undergraduate Students

Student Classification

Dependent Students

Independent Students (and dependent students whose parents have been declined a Federal Direct Parent PLUS Loan due to adverse credit history)

Freshmen (0 to 31 undergraduate credit hours earned/transferred)

$5,500 (No more than $3,500 of this amount may be in subsidized loans.)

$9,500 (No more than $3,500 of this amount may be in subsidized loans.)

Sophomore (32 to 63 undergraduate credit hours earned/transferred)

$6,500 (No more than $4,500 of this amount may be in subsidized loans.)

$10,500 (No more than $4,500 of this amount may be in subsidized loans.)

Junior/Senior (64 to 95 undergraduate credit hours earned/transferred)

$7,500 (No more than $5,500 of this amount may be in subsidized loans.)

$12,500 (No more than $5,500 of this amount may be in subsidized loans.)

Certification Students

$12,500 (No more than $5,500 of this amount may be in subsidized loans.)

Graduate Students

$20,500 each year in direct unsubsidized Stafford loans.

Federal Direct Stafford Loan Aggregate Limits

Aggregate Direct Stafford Loan Limit by Student Type

Undergraduate, Dependent Students

$31,000 (No more than $23,000 of this amount may be in subsidized loans.)

Undergraduate, Independent Students (and undergraduate, dependent students whose parents have been declined a Federal Direct Parent PLUS Loan due to adverse credit history)

$57,500 (No more than $23,000 of this amount may be in subsidized loans.)

Graduate Students

$138,500 (No more than $65,500 of this amount may be in subsidized loans.)