Stafford Loan Programs

Graduate Students

IMPORTANT: Budget Control Act of 2011 eliminates the Federal Direct Loan subsidy, effective July 1, 2012

The Budget Control Act of 2011, signed into law on Aug. 2, 2011, eliminates the Federal Direct Loan subsidy for graduate and professional students effective July 1, 2012. As a result, summer 2012 is the last term that graduate and professional students may be eligible to receive Federal Direct Subsidized loans, although they will continue to be able to receive unsubsidized loans.

Starting July 1, 2013, Federal Direct Subsidized and Unsubsidized loan disbursements will have a 1.051% origination fee, and Federal Direct PLUS loans will have a 4.204% origination fee applied at disbursement.

What does this mean for you?

Beginning July 1, 2012, new federal graduate/professional school loans will no longer be subsidized.

Subsidized Versus Unsubsidized Loans
Subsidized loans are interest-free while you are in school or otherwise have a deferment (authorized break from payments). As an example, let’s say you spent four continuous years in college, plus two years in graduate school. You have a subsidized loan from your first semester for $1,000 with a 3.86 percent interest rate. After completing your schooling, you would only owe the original $1,000, thanks to the subsidized nature of the loan. If your loan was unsubsidized, you would owe your loan balance, plus any interest occurred totaling $1,039.

Past Loans
Rules aren't changing for subsidized loans you have borrowed in the past. If you qualify for a deferment for reasons such as going back to school to get your Ph.D., you will still not get charged interest for the specified time period. If you borrow federal student loan money after July 1, 2012, new loans won’t be subsidized for graduate school and beyond.

Borrowing Limits
If you are starting or continuing a graduate degree program effective July 1, 2012 or later, borrowing limits won’t change. The difference is all of your new loans will be unsubsidized. If you qualify for Federal PLUS Loans, you can borrow additional funds. However, these loans are unsubsidized, too.

If you have consolidated your federal student loans or intend to consolidate after graduation, your subsidized loans will not be affected. Even though you pay via a single check or electronic payment, your unsubsidized and subsidized loans are separated in consolidation in case of future deferments.

Interest Rates and fees for the 2013-2014 academic year are:


Direct Interest Rate
Subsidized Stafford Loan
Unsubsidized Stafford Loan

Before you begin:
You will need your FAFSA PIN* issued by the U. S. Department of Education and the name, address and phone numbers of two adult references (living in the United States) with different addresses.
*If you have lost or forgotten your FAFSA PIN, visit
***Attention MAC users, you must use Internet Explorer or Firefox as your browser in order to complete your Master Promissory Note and Loan Entrance Interview. Safari is not compatible with the Dept. of Education's website.***
If you would prefer to work with another lender or as a transfer student have borrowed in the past and would like to continue working with that lender, please contact our office for further instruction.
STEP 2: Complete your Federal Direct Stafford Loan Entrance Interview online
This interview is a federal requirement and will inform you of your rights and responsibilities as a borrower under the Federal Stafford Loan program.

Complete your
To finalize the loan process you must complete and return the loan certification to the Office of Student Financial Assistance.

Attention Graduate/Part Time Undergraduate Students

Per Federal regulations, You MUST be enrolled/registered for at least 6 credits per term/semester in order for your Federal Stafford Loan or your Federal Grad Plus loan to disburse. Please remember that when you complete your Confidential Information form you will be indicating which terms/semesters you will be taking courses. Your loan disbursements will be divided by the terms you state on the form. Each of the terms/semesters you will be taking courses, you must maintain at least Half Time enrollment or at least 6 credits in order for your loan disbursements to be in compliance with Federal Regulations. This includes the Late Spring/Summer semesters. If you fail to maintain at least Half time enrollment your loan disbursements will be canceled.

There are 3 steps to applying for the Federal Direct Stafford Loan. If you are applying for a Federal Direct Stafford Loan for the first time at Sacred Heart University, you will need to complete all 3 steps which will take approximately 25-30 minutes.