Stafford Loans

Federal Stafford Loans are low-interest loans made to both undergraduate and graduate students enrolled at least half-time. Students must also meet general eligibility requirements prior to being offered a federal loan.

⇒ Subsidized Stafford Loan
The Subsidized Stafford Loan is need-based, and the interest is paid by the Federal Government as long as you are attending school at least half-time. The government also pays the interest on a Subsidized Stafford Loan for the six-month grace period after you graduate or cease to be enrolled at least half-time.

⇒ Unsubsidized Stafford Loan

Unsubsidized loan amounts are intended to help students that do not qualify for need-based aid or for whom need-based aid is not sufficient to meet educational expenses. For this loan, the government does not pay any interest on it. The interest starts to accrue from the date of the disbursement.

Many students receive both a Subsidized and an Unsubsidized Stafford Loan for the same period. The total of your combined Stafford Loans may not exceed the annual loan limit. The interest rate for undergraduate Subsidized Loans disbursed after July 1, 2008, is fixed at 6.0% for in-school, grace, deferment, forbearance, and repayment; the interest rate for undergraduate Unsubsidized, graduate Subsidized, and graduate Unsubsidized Loans disbursed after July 1, 2006, remains fixed at 6.8%. An origination fee and Federal Default Fee may be deducted from your loan before it is disbursed. For more information go to Student Aid on the Web.

↵ Accepting a Federal Stafford Loan:

Read all information on your financial aid Award Notification Letter. The award letter lists all the aid programs and the maximum amounts that you are eligible to receive.
Determine the amount you need to borrow. You may borrow any amount up to the maximum listed on your award letter. Compare all aid amounts to your anticipated tuition and fees and other education-related expenses (transportation, books, etc.) which you may incur. Then determine the amount that you need to borrow. An origination fee is deducted from your loan before it is disbursed. The net amount of the disbursement varies between 96% and 97% of the principal (gross) amount. You may want to factor in an allowance for this fee when determining the amount to request.
Complete the Loan Acceptance Form (the last page of the Award Notification Letter) and return it to the Student Finance Office. (For additional information and instructions, please see the Stafford Loan Guide.) Indicate the amount you want to accept (borrow) and choose a lender. Return the Loan Acceptance Form to the Student Finance Office.
Complete a Master Promissory Note (MPN) if this is your first loan or you are changing lenders. Your lender will send the MPN and/or information about completing the MPN online to your permanent home address. Many lenders have online and electronic signature capability.
Complete a Title IV Fee Authorization form (if you have not already done so) and return it to the Student Finance Office.
If this is your first Federal Stafford Loan, you must complete Stafford Loan Entrance Counseling before your loan funds can be disbursed. This is a federal requirement. NLU cannot release a Stafford loan disbursement to you until you have completed Entrance Counseling.

The lender will disburse the funds to NLU through the National Disbursement Network (NDN). This is a two to three business day process. When the funds are received, NLU will review all eligibility requirements and then post the funds to your student account. If federal funds create a credit balance, NLU will refund the excess funds to you by mailed check. Refund checks are generally processed within the same week but always within 14 business days.

⇒ Selecting a lender:

For more information about the Stafford Loan and for suggestions on how to select a lender, please see our Stafford Loan Guide.