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Federal Direct Stafford Loan

The Federal Direct Stafford Loan is available through the William D. Ford Federal Direct Loan Program to help pay for educational expenses. The Penn State Office of Student Aid awards Federal Direct Subsidized Stafford or Federal Direct Unsubsidized Stafford Loans, or a combination of both, based on financial need.

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Eligibility

Meet Federal and Penn State Financial Aid Eligibility Requirements.

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Subsidized vs. unsubsidized loans

The differences between subsidized and unsubsidized Stafford loans

Subsidized Stafford Loan

Unsubsidized Stafford Loan

Based on financial need
Not based on financial need
The federal government pays the interest on the loan while you are enrolled in school at least half-time. Interest begins accumulating as soon as funds are disbursed until the loan is paid in full. Accrued interest will be added to the balance of the loan. (You are not required to pay the interest while you are in school, but we recommend that you do.)
Undergraduate student fixed interest rates:
  • 3.86 percent for loans disbursed on/after July 1, 2013
Undergraduate student fixed interest rates:
  • 3.86 percent for loans disbursed on/after July 1, 2013
Graduate student fixed interest rates:
  • As of Fall 2012, subsidized Stafford loans are no longer be available for Graduate students
Graduate student fixed interest rates:
  • 5.41 percent for loans disbursed on/after July 1, 2013

Origination fees:

  • 1.072 percent for loans first disbursed on/after Dec. 1, 2013

Origination fees:

  • 1.072 percent for loans first disbursed on/after Dec. 1, 2013

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How to apply

You will automatically be considered for the Stafford loan if you submit the Free Application for Federal Student Aid (FAFSA).

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How to accept and receive your loan

If you are a first-time borrower, you will need to accept your loan.

Use your Federal Student Aid PIN (the PIN you used for the FAFSA) to sign into StudentLoans.gov and follow the instructions to:

  1. Complete your Entrance Counseling
  2. Sign your Master Promissory Note (MPN)

In most cases, you will only need to complete entrance counseling and sign an MPN once during your college career.

Financial aid made easier!
Listen to our 90 Seconds or Less podcasts on the MPN and Entrance Counseling

If you have technical difficulty signing the MPN, please contact the U.S. Department of Education’s Direct Loan Applicant Services at 800-557-7394.


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Understand net vs. gross loan amounts

Your Stafford loan will appear on both the Student Aid Summary and Bursar Tuition Bills section on eLion; however, the loan amounts will be different. The loan amount on the Student Aid Summary is the gross amount. In contrast, the Bursar Tuition Bills section will reflect the net amount after the loan origination fees have been deducted. Once you have accepted your loan and completed your registration, funds will automatically disburse to your student account after classes begin.

Example 1

You are awarded a $2,750 subsidized Stafford loan for one semester

  • $2,750 is your gross loan amount
  • $2,721 is your net loan amount that will disburse to your student account (gross amount minus the origination fee)

Example 2

You are awarded a $1,000 unsubsidized Stafford loan for one semester

  • $1,000 is your gross loan amount
  • $990 is your net loan amount that will disburse to your student account (gross amount minus the origination fee)

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Decrease or cancel your loan

To decrease or cancel your loan, log into eLion and select "Loan Decrease" from the "Financial" menu. If you are a new student, this option will be available after your Penn State Access Account is activated during the New Student Orientation or at a Penn State Access Account Signature Station.

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Loan proration for graduating borrowers (undergraduates only)

If you are a graduating senior and only attending one semester, your Stafford loans may be prorated based on the number of credits for which you are enrolled. This means that you may not be eligible to receive your maximum annual loan limit.

Loan proration applies only to undergraduate students; it does not apply to graduate or professional students.

This affects students enrolled for only one final semester in an academic year: either fall-only, spring-only, or summer-only. For example, this will not affect students who are enrolled in fall and spring semesters and graduate at the end of the spring semester.

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