Federal Direct Stafford Loans are also referred to as Direct Loans or Federal Direct Loans. The lender of these loans is the U.S. Department of Education and repayment is to the Department. Between 10 and 30 years to repay, depending on amount owed and type of repayment selected. For additional information please visit https://studentaid.ed.gov.

Application Form

You must apply for financial aid using the FAFSA. You will not be automatically offered a Direct Loan. If you want to borrow from the Direct Loan program you must request the loan from the financial aid office. If you request a Direct Loan and later decide you do not need the funds, you may decline the loan by contacting the financial aid office.

Subsidized Loans

If you are an undergraduate student and have financial need you are eligible for a subsidized Direct Loan. With subsidized loans no interest will be charged as long as you maintain at least half-time enrollment (6 credits). Financial need is the difference between Cost of Attendance and your Expected Family Contribution.

Interest Rate and Repayment for Subsidized Loans

Subsidized loans taken between 7/1/2018-6/30/2019 are charged a fixed interest rate of 5.05%. The interest will not change throughout the life of the loan. There is no interest charged on your subsidized loan as long as you maintain half-time enrollment at the college. The interest rate varies each year on new loans and is adjusted each July 1st.

Qualifying Credits and Programs

You must take at least 6 credits per semester. You must be accepted for admission to a degree-seeking program (this includes eligible certificate programs).

Unsubsidized Loan

The unsubsidized loans are charged an interest rate of 5.05% and is available to students who do not qualify for the subsidized loan. The difference of the unsubsidized loan is that interest accrues while the student attends school. You are eligible to receive an unsubsidized Direct Loan to replace all or a portion of the family contribution if there is loan eligibility remaining.

Interest Rate and Repayment for Unsubsidized Loans

Unsubsidized loans taken between 7/1/2018 -6/30/2019 are charged a fixed interest of 5.05%.  The interest will not change throughout the life of the loan. If you borrow an unsubsidized Direct Loan, you have the option of paying the interest as it accrues or you can let it be added to the principal of the loan. The interest rate varies each year on new loans and is adjusted each July 1st.

150% Direct Subsidized Loan Limit (SULA)

Direct Loan requirements limit borrower eligibility for Direct Subsidized Loans to a period of 150 percent of the length of the borrower’s educational program.  For example, 6 years of Subsidized Loan eligibility for a Bachelor’s degree and 3 years for an Associate’s degree. Under certain conditions, first-time borrowers who have exceeded the 150 percent limit may lose the interest subsidy on their Direct Subsidized Loans.

Maximum annual limits for Subsidized and Unsubsidized Federal Direct Loans

For Dependent and Independent Students

Loans for Dependent Students (Federal Direct Loans)

The amount you are eligible to borrow each academic year

Maximum Subsidized Loan

Additional Unsubsidized Loan

Total Loan (combined subsidized and unsubsidized)

1st Year $3,500 $2,000 $5,500
2nd Year $4,500 $2,000 $6,500
3rd Year and Beyond (BA Programs only) $5,500 $2,000 $7,500

Loans for Independent Students (Federal Direct Loans)

The amount you are eligible to borrow each academic year

Maximum subsidized Loan

Additional unsubsidized Loan

Total Loan (combined subsidized and unsubsidized)

1st Year $3,500 $6,000 $9,500
2nd Year $4,500 $6,000 $10,500
3rd Year and Beyond (BA Programs Only) $5,500 $7,000 $12,500
Graduate and Professional Students N/A _ $20,500

Maximum Lifetime Loan Amounts (Federal Direct Loans)

Student Level & Dependency Status

Maximum subsidized and unsubsidized

Maximum subsidized

Dependent Undergraduate $31,000 $23,000
Independent Undergraduate $57,000 $23,000
Graduate/Professional $138,500 N/A


  • Dependent student: The career maximum of subsidized and unsubsidized combined undergraduate loans is $31,000 ($23,000 maximum in subsidized loans).
  • Independent student: The career maximum undergraduate amount is $57,000 ($23,000 maximum in subsidized loans).
  • Graduate and professional student: The career amount maximum is $138,500.

Maximum for Subsidized Direct loans

Cost of Attendance
– Expected Family Contribution
– Estimated Financial Assistance

= Maximum Subsidized Loan Amount

Example of subsidized loan eligibility

Let’s say you are a dependent student and in your 3rd year of college. Your total cost of attending college is $10,000, which includes: tuition, fees, books, supplies, transportation, lunch, and personal expenses. Your expected family contribution determined from your FAFSA is $3000 and your total financial aid from grants and scholarships totals $2,000. You have expenses not met of $5000 ($10,000-$3,000-$2,000=$5,000). You could get a subsidized loan for the portion of expenses that were not met which is $5000. If you still need additional money to cover costs, you could receive a maximum of $500 in an unsubsidized loan. You could not exceed $2,500 in an unsubsidized loan since the maximum a 3rd year student could borrow in federal direct loans is $7,500.

$10,000 Cost of Attendance (COA)
– $3,000 Expected Family Contribution (EFC)
– $2,000 Financial Aid

= $5,000 Portion not met

Maximum for Unsubsidized Direct and PLUS loans

Cost of Attendance
– Estimated Financial Assistance

= Maximum Loan Amount


$5,000 Maximum Subsidized loan
+ $2,500 Maximum Unsubsidized loan (replaces part of your EFC)

= $7,500 Maximum Direct loan

A dependent student’s maximum eligibility, whether it subsidized or a combination of subsidized and unsubsidized loans, cannot exceed the amounts shown above. Independent students, however, are eligible to borrow additional funds from the Unsubsidized Direct Loan program. In cases where the parents of the dependent student are denied eligibility for the Parent Loan for Undergraduate Students (PLUS) due to a negative credit history, the dependent student may borrow additional funds from the unsubsidized loan program. Student borrowers do not need a co-signer and there is no credit check done by the federal government.

  • Federal Direct Loan borrowers taking their first loan on or after July 1, 2013 may qualify for a subsidized Direct Loan for a maximum of 150% of the length of their academic program. Students will be limited to receiving subsidized loans for 3 years in a 2 year program or 6 years in a 4 year program. Students reaching this limitation could receive unsubsidized loans if eligible. Additionally, borrowers who reach the 150% limitation will have their interest subsidy end for all outstanding subsidized loans.
  • The federal government charges all borrowers an origination fee at the time the loan is disbursed. This is in addition to interest charges.
  • While pursuing an undergraduate degree, you can borrow a maximum of $31,000 as a dependent student and a maximum of $57,000 as an independent student.
  • Before loan funds may be disbursed you must complete an entrance interview. This interview is usually done on-line and consists of providing loan borrowers with extensive information regarding the loan’s terms and conditions.
  • You are responsible for notifying your Direct Loan Servicer when you leave school or are no longer enrolled at least half-time and whenever your address changes.
  • You may prepay all or any part of the unpaid balance on your loans at any time without penalty. This will decrease the amount of interest that you will pay over the life of the loan.
  • If you receive a Federal Direct Loan or a Federal Perkins Loan and you drop below half-time status, you must contact your college Financial Aid Office to arrange for an Exit Interview.
  • Most colleges disburse the funds once a semester unless you are scheduled to register for only one semester in the academic year. In that case the loan will be disbursed in two equal payments. Colleges have the option of disbursing a loan for up to 20 payments depending on the college’s policy and the student’s needs.
  • A federal Student Loan Ombudsman office is available for assistance with loan problems at 1-877-557-2575 or by writing to: Office of the Ombudsman, Student Financial Assistance, US Dept. of Education, Fourth Floor, 830 First Street, NE, Washington, DC 20202-5144.

How do I apply for a Stafford Loan?

The same way you do the other federal student aid, by completing the Free Application for Federal Student Aid (FAFSA). You will need to submit a loan request form to your CUNY college to get a Stafford loan processed. You will also need to sign a promissory note, a binding legal document that states you agree to repay your loan according to the terms of the note.

What is my repayment period?

The repayment periods for Stafford Loans vary from 10 to 30 years depending on which repayment plan you choose. When it comes to repayment you can pick a repayment plan that’s right for you. You can get more information about repayment by going to the U.S. Department of Education web site www.studentaid.ed.gov.

When do I start paying back my student loans?

If you’re attending school at least half-time, you have a period of time after you graduate, leave school, or drop below half-time status before you must begin repayment. This period of time is called a “grace-period”. The grace period for a Stafford Loans is six months.

Subsidized loan – during the grace period, you don’t have to pay any principal although you will be charged interest for unsubsidized loans taken after July 1, 2012.

Unsubsidized loan – you don’t have to pay any principal, but you will be charged interest. You can either pay interest as you go along or it will be capitalized later.

How much will I have to repay and how often?

Usually you’ll pay monthly. Your repayment amount will depend on the size of your debt and the length of your repayment period. If you have a Stafford Loan, the amount you’ll pay also depends on the repayment plan you choose

How can I check the status of my student loans?

You should contact the holder of your loan. If you don’t know who holds your loan, you can use the Web site (https://nslds.ed.gov) to find out about your federal student loans. The site displays information on loan and/or federal grant amounts, outstanding balances, loan statuses, and disbursements. To use the NSLDS Student Access Web site, you will need your FSA ID to sign in.

What if I can’t make my payments?

There are two options for postponing repayment – Deferment and Forbearance. Receiving deferment or forbearance is not automatic. You must apply for it. You must continue making payments on your loan until your deferment or forbearance has been granted.


A period of time during which no payments are required and interest does not accumulate. In the case of an unsubsidized Stafford Loan you must pay the interest.

Forbearance – loan payments that are reduced or postponed.

If you temporarily can’t meet your repayment schedule but you don’t meet the requirements for a deferment, your lender might grant you forbearance.

  • Interest continues to accumulate and you are responsible for paying it no matter what type of loan you have.
  • Generally forbearance is for periods of up to 12 months at a time for a maximum of 3 years.

You’ll have to provide documentation to the holder of your loan to show why you should be granted forbearance.

What deferment options are available to you?

The following conditions can qualify you for a deferment Conditions of your Stafford Subsidized and Unsubsidized loans

  • Enrolling in school at least half time
  • Inability to find full time employment for up to 3 years
  • Economic hardship for up to 3 years Other deferment conditions are loan specific

If I take a leave of absence, do I have to start repaying my loans?

Not immediately. The subsidized Stafford loan has a grace period of 6 months before the student must begin repaying the loan. When you take a leave of absence you will not have to repay your loan until the grace period is used up. If you use up the grace period, however, when you graduate you will have to begin repaying your loan immediately. It is possible to request an extension to the grace period, but this must be done before the grace period is used up. If your grace period has run out in the middle of your leave of absence, you will have to start making payments on your student loans.

Can I cancel my student loan if I change my mind, even if I’ve signed the promissory note agreeing to the loan’s terms?

Yes, your school must notify you in writing whenever it credits your account with your loan funds. You may cancel all or a portion of your loan if you inform your school within 14 days after the date your school sends you this notice, or by the first day of the payment period, whichever is later. (Your school can tell you the first day of your payment period.)

Are my parents responsible for my educational loans?

No. Parents will only be responsible for your educational loans if you are under 18 and they co-sign your loan. In general you and you alone are responsible for repaying your educational loans. On the other hand, if your parents (or grandparents) want to help pay off your loan, you can have your billing statements sent to their address. Likewise, if your lender or loan servicer provides an electronic payment service, where the monthly payments are automatically deducted from a bank account, your parents can agree to have the payments deducted from their account. But your parents are under no obligation to repay your loans. If they forget to pay the bill on time or decide to cancel the electronic payment agreement, you will be held responsible for the payments, not them.