Federal Direct Stafford Loans

The Direct Loan program offers many benefits to students and parent borrowers, including:

• Consistent access to loan funds directly from the U.S. Department of Education
• Competitive rates and repayment options available to all borrowers
• Simple application process
• Quick receipt of funds
• Excellent customer service

This loan may be subsidized, unsubsidized, or a combination of both. With a subsidized loan, which is awarded based on financial need, the federal government pays interest that accrues while you are in school. The unsubsidized loan is not based on need; interest that accrues while in school must either be paid monthly or deferred and capitalized (added to the original loan balance). Loan eligibility is determined by the Financial Aid Office.

Interest rates for Federal Direct Stafford Loans are listed below. There is a .5% origination fee (which is net of a 1.5% up-front rebate that assumes 12 on-time monthly payments) deducted from the proceeds of the loan. Loan funds are disbursed directly to BCC in equal amounts over each term of enrollment for the academic year. There is a 6-month grace period prior to repayment following graduation, withdrawal, or a drop below half-time status. In order to minimize borrowing, students and families should use other sources of financing before borrowing and borrow only the minimum amount needed.

Loan limits:
Independent students are allowed to borrow more than dependent undergraduate students.

Annual Stafford loan limits:
Year 1	$5,500 (dependent) $9,500 (independent) Subsidized maximum $3,500
Year 2	$6,500 (dependent) $10,500 (independent) Subsidized maximum $4,500
Years 3 and 4	$7,500 per year (dependent) $12,500 per year (independent) Subsidized maximum $5,500 annually
Graduate student	$20,500 per year Subsidized maximum $8.500 annually

Aggregate limits

For undergraduate students:
Dependent—$31,000 (up to $23,000 may be in subsidized Stafford loans)
Independent—$57,500 (up to $23,000 may be in subsidized Stafford loans)
For graduate and professional students:
$138,500 (up to $65,500 may be in subsidized Stafford loans)

Interest rate: Interest rates are variable and may change annually.

Subsidized - 2010-11 rate: 4.5% 2011-12 rate: 3.4% 2012-13 rate: 6.8%
Unsubsidized - 6.8%
During in-school, grace or deferment, rate based on 91 day T-bill rate + 1.70%.
During repayment periods, based on 91 day T-bill + 2.30%.
Capped at 8.25%.
Based upon current rates.