This loan is obtained from a bank or other lending institution and is insured by the federal government.  You are required to begin repayment once you are out of school or reduce your class load below six credits for a period of at least six months.  For new borrowers the interest rate is variable.  There are two types of Stafford Loan.

The Subsidized Stafford Loan is for students who demonstrate financial need.  The federal government pays the interest while you are in school.

The Unsubsidized Stafford Loan.  If based on financial need, you are not eligible to borrow all or some of the Subsidized Stafford Loan, you may borrow the Unsubsidized Stafford Loan.  The difference is that you, rather than the federal government, are responsible for the interest payments while you are in school.  You have the option to capitalize the interest, i.e., add the interest to your loan principal and defer payments until graduation.  Some banks capitalize interest once at repayment so the student does not incur compounded interest.  

Although an estimate of loan eligibility is provided in the award letter, you must complete and sign a loan application and promissory note.  Fordham processes Stafford Loans electronically.  After your deposit has been paid, you will receive directly from your guarantor (usually NYSHESC) a pre-printed Master Promissory Note.  Follow the instructions included with the application.

The chart below shows estimated monthly payments and total interest charges for loans of varying amounts, with standard repayment plans. Additional payment plans, such as graduated repayment and income-sensitive options, may also be available.  All students who have borrowed through the Federal Stafford Loan program must complete an entrance counseling session in order to receive funding and an exit counseling session prior to graduation.

Effective July 1, 2006 graduate students will be able to borrow the Federal PLUS loan. Even though the loan is named PLUS, it is in the graduate student’s name (not their parents). It allows you to borrow up to your Cost of Attendance minus any other aid.

The rate is fixed at 8.5% so students should exhaust their Federal Stafford Loan eligibility before applying for the Graduate PLUS Loan. There is also a credit check required for this loan but the credit criteria is less strict as it is for an alternative loan.

Grad PLUS Eligibility Requirements

Students Must:

• File a FAFSA
• Be a U.S Citizen or Permanent Resident
• Be enrolledat least half time
• Not be in default on any prior federal student loan
• Be pursuing a degree in an accredited program
• Have no recent federal drug convictions
• Have taken advantage of their full Stafford Loan eligibility before receiving a Graduate PLUS loan.
• Meet minimal credit requirements (absence of bad credit); Pre-screen may be available
• Complete separate PLUS MPN

Grad PLUS Features

• Student may borrow up to the full cost of education less other aid, annually
• Interest rate fixed at 8.5%
• No aggregate limit
• No co-signor requirement
• May be eligible for consolidation
• Defer principal and interest payments while in school and during periods of financial difficulty
• 3% origination fee
• On-line applications
• Borrowers have the same deferment, forbearance, and death and disability provisions as the Stafford Loan program

Keep in mind, this program starts July 1, 2006. Fordham University will not be able to certify any graduate PLUS loans until that day. You can get credit approved through your lender before July1 though.