Federal Stafford Loan
Eligibility for the Stafford loan is determined after a student has filed an application for financial aid. including the FAFSA. There are two kinds of Stafford loans: subsidized and unsubsidized.
- Subsidized Stafford loan. The federal government pays the interest on the loan while the student borrower is in school. To qualify for a subsidized Stafford loan, a student must demonstrate financial need via the FAFSA, tax returns, and other aid application materials.
- Unsubsidized Stafford loan. The student pays the interest throughout the life of the loan. Payment can be deferred until six months after a student graduates or leaves school, however making interest-only payments while in school is encouraged. Students do not need to demonstrate need to qualify for an unsubsidized loan.
Loan Step-by-Step
Basic Loan Information
- Interest rate. The interest rates for loans issued after July 1, 2006, are fixed as follows. Some lenders further reduce interest rates as a borrower benefit.
Subsidized undergraduate loans
6% for loans disbursed 2008–09
5.6% for 2009–10
4.5% for 2010–11
3.4% for 2011–12
Unsubsidized undergraduate loans and graduate loans
6.8% for all
- Loan fees. Stafford loans have loan fees (2% for 2008–09). Some lenders eliminate or reduce fees as a borrower benefit.
- Lenders. You may use any lender who participates in the federal Stafford loan program.
- Disbursement. A full-year loan is disbursed in two installments, half each term. The funds come directly to Bennington College early in each term, after course registration is complete. (See note below regarding schedule for MATSL students.)
- Interest accrual. Interest begins to accrue on a subsidized Stafford loan six months after the borrower graduates or leaves school. Interest begins to accrue on an unsubsidized Stafford loan when the loan is first disbursed.
- Repayment. Repayment begins six months after the borrower graduates or leaves school.
- Length of repayment. Most Stafford loans are repaid over 10 years, though other options, including loan consolidation, are available. More information is available from individual lenders.
- Other options. Individuals may qualify for a variety of Stafford loan repayment adjustments, including alternative repayment schedules; loan forgiveness for certain types of service; limited deferment for unemployment, enrollment in school, economic hardship, or other specified circumstances; and loan cancellation in the event of death.
- Annual loan limits
Freshmen: $3,500 *
Sophomores: $4,500 *
Juniors/seniors: $5,500 *
Postbaccalaureate students: $5,500 (dependent); $12,500 (independent)
Graduate students: $20,500 or cost of education, whichever is less
(note: low-residency masters programs are less than
$20,500)
* Independent undergraduates, and dependent undergraduates whose parents have been denied a PLUS loan for reasons of poor credit, can borrow an additional $4,000 (freshmen and sophomores) to $5,000 (juniors and seniors).
Stafford Loan Disbursements for MATSL Students
Because the two terms of the MATSL program’s academic year are of very different lengths, it is subject to a special Stafford loan disbursement schedule. Half of the loan is disbursed in July for the summer term. The remaining half is disbursed halfway through the academic year calendar, in January. Bills for the non-resident term, however, are sent in August.
MATSL students whose summer disbursement will not cover all summer charges and students who will pay the non-resident term charges with the second (January) loan disbursement may contact the Business Office (business@bennington.edu or 802-440-4355) to arrange a payment contract accommodating the Stafford disbursement schedule.
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Financial Aid
