Federal Direct Stafford Loans are the primary means by which our students finance their legal education. These loans are lent directly from the federal government to the student, and cannot exceed $18,500 for an academic year. Students accepted into the College of Law will be eligible to receive a Federal Direct Stafford Loan package for the academic year of the lower of: 1) $18,500; or b) the student's Cost of Attendance for the academic year.
Federal Direct Stafford Loans comprise two types: subsidized and unsubsidized.
Subsidized loans are loans for which the federal government pays the interest on the loan for a student while the student is in law school. When the deferment period ends after law school graduation, the amount of subsidized loan that the student must repay will be equal to the sum amount of the loans that the student was awarded while in law school.
Unsubsidized loans are loans that accrue interest while a student is in law school. When the deferment period ends after law school graduation, the amount of unsubsidized loan that the student must repay will be higher than the sum amount of the loans that the student was awarded while in law school.
The amount of subsidized Federal Direct Stafford Loans that a student receives will be based upon the financial figures that the student supplies to the government when applying for federal financial aid. In overly simplistic terms, the greater a student's financial resources, the less likely it is that the student will be awarded a large amount of subsidized loan funds. The maximum amount of subsidized Federal Direct Stafford Loans that a student may receive in an academic year is $8,500.
The amount of unsubsidized Federal Direct Stafford Loans that a student may receive is based upon the amount of subsidized Federal Direct Stafford Loans that he or she received. This amount can be calculated according to the following formula:
$18,500 or the student's Cost of Attendance (whichever is lower) - amount of subsidized Federal Direct Stafford Loan amount of unsubsidized Federal Direct Stafford Loan
Using this formula, a student whose Cost of Attendance is $18,444 and who receives the maximum of $8,500 in subsidized Federal Direct Stafford Loans would be eligible to receive $9,944 in unsubsidized Federal Direct Stafford Loans ($18,444 - $8,500 = $9,944). A student whose Cost of Attendance is $18,444 who receives $0 in subsidized Federal Direct Stafford Loans would receive $18,444 in unsubsidized Federal Direct Stafford Loans ($18,444 - $0 = $18,444).
The Federal Direct Stafford Loan Program offers four repayment plans. Upon graduation, students may choose one of the following plans:
The Standard Repayment Plan requires you to pay a fixed amount each month -- at least $50 -- for up to 10 years. The length of your actual repayment period will depend on your loan amount.
The Extended Repayment Plan allows you to extend loan repayment over a period that is generally 12 to 30 years, depending on your loan amount. Your monthly payment may be lower than it would be if you repaid the same total loan amount under the Standard Repayment Plan, but you may repay a higher total amount of interest over the life of your loan because the repayment period may be longer. The minimum monthly payment is $50.
Under the Graduated Repayment Plan, your payments will be lower at first and then increase generally every two years. The length of your repayment period will generally range from 12 to 30 years, depending on your loan amount. Your monthly payment may range from 50 percent to 150 percent of what it would be if you were repaying the same total loan amount under the Standard Repayment Plan. However, you'll repay a higher total amount of interest because the repayment period is longer than it is under the Standard Repayment Plan.
The Income Contingent Repayment Plan bases your monthly payment on your yearly income, family size, and loan amount. As your income rises or falls, so do your payments. After 25 years, any remaining balance on the loan will be forgiven, but you may have to pay taxes on the amount forgiven.
