Federal Stafford Loans | Pepperdine University | Graziadio Business School

Federal Stafford Loans

The Federal Stafford Loan is a loan made by a bank or a private lending agency to a student to be used for education-related expenses. There are two programs in the Federal Stafford Loan: Subsidized and Unsubsidized.

The Subsidized Stafford Loan is interest-free to the student (the government pays the interest) while the student is enrolled in school at least half time, during the grace period, and during periods of authorized deferment.

The Unsubsidized Stafford Loan is not interest-free at any time. However, the interest and principal payments may be deferred while the student is in school at least half time, during the grace period, and during authorized periods of deferment. If the interest payments are deferred, the interest will continue to accrue and will be added (capitalized) to the principal balance once repayment begins.

Federal Stafford Loan Limits

Undergraduate Dependent Students (determined by FAFSA):

Loan

Annual Loan Limits
(per two-term period)

Aggregate Loan Limits

Subsidized Stafford Loan
Unsubsidized Stafford Loan

$5,500
$7,500
(minus any Subsidized Stafford amount)

$23,000
$31,000

Plus Loan-Parent Loan (cost of attendance minus any other financial aid)  

Undergraduate Independent Students:

Loan

Annual Loan Limits
(per academic year)

Aggregate Loan Limits

Subsidized Stafford Loan

$5,500

$23,000

Unsubsidized Stafford Loan

$12,500 
(minus any Subsidized Stafford amount)

$57,500

Students may select any lender (bank or credit union) that processes student loans. Students may contact the Financial Aid Office regarding the most current lender information.

Student's lender choice may be based on their pricing, processes, loan products, and customer service (PPPS), with no one single factor being determinative.

Pricing
  • Front/Back Fees
  • Interest Rate
  • Repayment Benefits
Process
  • Loan Sales Strategy
  • Loan Processing System Compatibility
  • In-house Loan Origination and Servicing
Customer Service
  • Debt Management
  • Web-based Tools & Services

Pricing, processes, loan products, and customer service (PPPS), with no one single factor being determinative.

The Financial Aid Office encourages the students to share their experience with their lenders using the online survey at /financialaid/surveys/[BROKEN LINK], by phone, or in person.

Eligibility

How To Apply

Pepperdine participates in the Federal Family Education Loan Program and offers student loans through banks and other lending institutions. To apply for a student loan, students must complete the Free Application for Federal Student Aid (FAFSA).

Interest Rate Chart

Fees

The Stafford Loan has two fees deducted from it. The first is a 2% origination fee charged by the government; and the other fee is a default fee (insurance premium) charged by the guaranty agencies of up to 1%. Some lenders and guarantee agencies used by Graziadio School of Business Management chose to offset the above-mentioned fees.

No Prepayment Penalty

The Stafford Loan can be repaid in full or in part at any time without penalty. Prepayments are applied first to any accrued interest and then to the loan principal.

No Credit Check

Because the Stafford Loan is guaranteed by the federal government to the bank, there is no credit check required for students. However, the student cannot be in default on a prior student loan.

Grace Period

Both loan types have a grace period which means the student does not have to begin making payments until six months after graduating or dropping below half-time attendance.

Repayment Options

The Stafford Loan is repaid over a ten-year period following the end of the grace period. There are three types of payments available to students. In order to request a specific repayment option, please contact your lender.

  • Standard repayment (the same payment every month for up to ten years)
  • Graduated repayment (the payment starts small and gradually increases over the ten-year time frame)
  • Income-sensitive repayment (the payment is dependent upon your income and is adjusted each year for up to ten years)
  • Extended repayment (the eligible borrowers receive payment relief through a lengthened repayment term of upto 25 years.
  • Consolidation (the federal consolidation loan program allow borrowers to refinance one or more federal education loans and significantly lower their monthly repayment by extending the payback period.  The original loans are paid-in-full, and a new loan for the combined balances is issued with new terms, including a new, low interest rate that is fixed for the life of the loan.)

Loan consolidation (Through the Consolidation Loan program, a lender buys all of your eligible loans and combines them into one new loan)

Deferments/Forbearance

The federal government offers deferments on this loan for periods of

  • Enrollment in school
  • Study in a graduate fellowship program
  • Rehabilitation training program for disabled individuals
  • Unemployment
  • Economic hardship

Please contact your lender to request the appropriate forms.