The Federal Pell Grant amount is determined by the Expected Family Contribution (EFC) listed on the Student Aid Report and the student’s enrollment status. Pell Grants are only awarded to undergraduate students working on their first Bachelor’s degree. These awards require the completion of the federal financial aid application process, including the Free Application for Federal Student Aid.
The U.S. Department of Education administers several loan programs designed to offer low-interest funding to students who need to borrow money to cover the costs of education. One such program is the Federal Stafford loan program. In order to qualify for a Stafford loan, a student must be enrolled in a status of at least half-time, complete the FAFSA, and submit any other required paperwork.
The Federal Stafford Loan Program is intended solely to aid students pursuing a degree in higher education. Students should borrow only the amount they believe is necessary to pay for educational costs. Keeping the amount of a loan at a minimum will ease repayment.
Subsidized and Unsubsidized Stafford Loans
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A subsidized loan is awarded on the basis of financial need. The federal government pays the interest while a student is in school and during grace and deferment periods.
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An unsubsidized loan is not awarded on the basis of need. You’ll be charged interest from the time the loan is disbursed until it’s paid in full. If you allow the interest to accrue while you’re in school or during other periods of nonpayment, it will be capitalized—that is, the interest will be added to the principal amount of your loan, and additional interest will be based on that higher amount.
Stafford Student Loan Interest Amounts
The subsidized Stafford Loan interest rate varies depending on date of disbursement. Contact your financial aid advisor for details. The unsubsidized Stafford Loan interest rate is at a fixed rate of 6.8%. You’ll be notified of interest rate changes throughout the life of your loans. A fee of up to 2% of the loan, deducted proportionately from each loan disbursement, is also assessed.
Annual Loan Limits for Stafford Loans
Federal Stafford loans have both annual limits and lifetime limits for what a student is permitted to borrow. These limits are based on an undergraduate’s classification (e.g. Freshman, Sophomore, Junior, or Senior) and whether a student is considered Dependent or Independent, based on results from the FAFSA application. Graduate students do not have Dependent or Independent distinctions, but do have different limits than undergraduate students. Lifetime maximum limit debt allowed includes all outstanding federal Stafford loans borrowed at other institutions.
Dependent Undergraduate Student:
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1st Year $5,500 – Only $3,500 may be subsidized
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2nd Year $6,500 – Only $4,500 may be subsidized
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3rd and 4th years $7,500 – only $5,500 may be subsidized
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Lifetime Maximum Limit $31,000 – only $23,000 may be subsidized
Independent Undergraduate Student:
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1st Year $9,500 – Only $3,500 may be subsidized
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2nd Year $10,500 – Only $4,500 may be subsidized
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3rd and 4th years $12,500 – Only $5,500 may be subsidized
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Lifetime Maximum Limit $57,500 – Only $23,000 may be subsidized
Graduate Students:
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Each academic year $20,500 – Only $8,500 may be subsidized
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Lifetime Maximum Limit $138,500 – Only $65,500 may be subsidized
The U.S. Department of Education also administers a loan program for Dependent students that can be borrowed by the student’s parent. Awarding of this loan is subject to credit approval. Parents, step parents or adoptive parents may apply. Completion of the FAFSA is required for the PLUS loan. Yearly loan limits are calculated at the time the PLUS loan is awarded and are dependent on the student’s Estimated Cost of Attendance.
Graduate students can also qualify for a graduate PLUS loan. Like the Federal PLUS loan, it is subject to credit approval. Yearly loan limits are determined by the student’s Estimated Cost of Attendance. Completion of the FAFSA is not required for the PLUS loan, but is strongly recommended so that eligibility for other types of financial aid may be determined first. Students who receive graduate Stafford loans may not qualify for any graduate PLUS loan.
Many private scholarships for college students are offered each year from various corporations and other organizations. These scholarships must be applied for separately from the federal financial aid application. To be considered, students must meet the eligibility criteria specified by the donor or sponsor and complete any independent scholarship application requirements.
These are some of the free private scholarship search tools available online:
College Board's Scholarship Search
College Toolkit
fastWEB
FinAid (Financial Aid Information Page)
Private student loans are offered through a variety of banks and other lenders. These loans must be applied for separately from the federal financial aid application. Interest rates on private loans generally are offered based on a student’s or cosigner’s credit. It is important to carefully look at a private loan’s terms during the application process as rates and conditions can vary greatly.
