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Federal Stafford Loan
- Who can apply for The Maine Advantage?
- Loans are available for undergraduate or graduate students.
- Student must be a Maine resident, or attend college in Maine.
- Eligibility
Based on financial need. Student must complete and file the Free Application for Federal Student Aid (FAFSA). Eligibility for a Subsidized Federal Stafford Loan must be determined prior to receiving an Unsubsidized Federal Stafford Loan.
- Interest Rate
The interest rate established by the Federal government is a fixed rate of 5.6% for Undergraduate Subsidized Stafford loans. All Unsubsidized Stafford loans and all Graduate Stafford loans are a fixed interest rate of 6.8%. These rates will be effective for all loans made on or after 7/1/2009.
- Advantage AutoPay
Enjoy the convenience of automatic monthly payments from your checking or savings account.
- Origination and Default Fees (effective July 1, 2009)
1% default fee and .5% origination fee.
- Annual Loan Limits (as of July 1, 2008)
Borrowers can receive both a Subsidized and Unsubsidized Federal Stafford Loan totaling up to their applicable Federal Stafford limit. For example: a freshman student applies for and receives a $2,000 Subsidized Loan and also applies for an Unsubsidized Loan. Since the annual loan limit for a freshman is $3,500, the borrower would be eligible for an Unsubsidized Loan of $1,500.
Undergraduate Students
| Freshman | | $3,500 |
| Sophomore | | $4,500 |
| Junior & Beyond | | $5,500 |
| Cumulative | | $31,000 (no more than $23,000 of which can be Subsidized) |
Dependent Students
Additional Unsubsidized amount: $2,000 per year
Cumulative $57,500 (no more than $23,000 of which can be Subsidized)
Additional Unsubsidized Amounts
For independent students or for dependent students whose parent cannot borrow a PLUS Loan, additional Unsubsidized amounts:
| Freshman | | $6,000 |
| Sophomore | | $6,000 |
| Junior or Senior | | $7,000 |
Graduate or Professional Students
Maximum per year $8,500
Cumulative $65,500
Additional Unsubsidized amount: $12,000 per year
- Disbursements
Disbursements are sent in two or more payments directly to the student's college and are co-payable to the borrower and the school.
- Repayment Begins
- For Subsidized Loans, payments of principal and interest are deferred until six months after student ceases to be enrolled on at least a half-time basis.
- For Unsubsidized Loans, principal can be deferred during period of enrollment, but the student is responsible for interest that accrues while the student is enrolled on at least a half-time basis.
- An option to make payments during the deferment period is available. Payments can be automatically debited from a checking or savings account, or can be billed via a monthly statement.
- Repayment Terms
Term of ten years that may be extended up to 25 years depending on the amount borrowed. The payment amount is determined by the total amount of Federal Loans borrowed, but cannot be less than $50 per month.
- Deferment Options
Deferment is available under certain circumstances. During eligible deferments, the Federal Government will pay the accruing interest for Subsidized Federal Stafford Loans. The borrower is responsible for interest that accrues for Unsubsidized Federal Stafford Loans.
- Capitalization of Unsubsidized Federal Stafford Loan Interest
Capitalization is a process whereby the lender adds unpaid interest to the principal balance of the loan. If you choose to not pay the accruing interest on your Unsubsidized Federal Stafford Loan, the lender will capitalize this interest when your loan goes into repayment.
- How do I know if I am an independent student?
A student's dependency is based on the information provided on the FASFA form. You may be an independent student if you are one of the following:
- 24 years of age or older;
- An orphan or ward/dependent of the court, or was a ward/dependent of the court until he or she reached 18;
- Student is a veteran of the U.S. Armed Forces. For the purposes of determining dependency status, a student is considered to be a veteran if he or she will meet both of the following criteria prior to the end of the award year for which the FAFSA is filed.
- The student engaged in active duty in the U.S. Armed Forces; is a National Guard or Reserves enlistee, who is called to active duty for purposes other than training; or was a cadet or midshipman at a service academy (even if the student withdrew before graduation).
- He or she was released under a condition other than dishonorable.
- The student is currently serving on active duty in the U.S. Armed Forces or is a National Guard or Reserves enlistee and is called to active duty for purposes other than training. In this case, active duty does not include a call into active duty for state purposes.
- The student is working on a master's or doctoral program (such as MA, MBA, MD, JD, PhD, EdD, or graduate certificate, etc.) at the beginning of the award year for which the FAFSA is completed.
- The student is married as of the date the FAFSA is completed.
- The student has at least one child who receives more than half of his or her support from the student.
- The student has a dependent, other than a spouse or a child, who lives with the student and receives more than half of his or her support from the student at the time the FAFSA is completed and through June 30 of the award year.
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1.800.782.5772 ·
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