Loans provide students with an opportunity to invest in their future. The Federal Direct Stafford Loan Program is administered by the federal government. There are two types of Stafford loans: subsidized and unsubsidized.
Subsidized Loans
- The federal government pays the interest while the student is in school at least half time and during the six-month grace period.
- Once in repayment, the student is responsible for paying the interest on the loan(s) as well as the principal amount borrowed.
- This is a need-based loan.
Unsubsidized Loans
- The federal government does not pay the interest while the student is in school at least half time or during the six-month grace period. The student may choose to pay the interest while in school in order to avoid paying interest on interest (capitalized interest).
- This is a non-need-based loan which means the amount of the unsubsidized loan combined with other aid cannot exceed the total cost of attendance.
Stafford Loan Eligibility
| Students Must | Students Cannot |
|---|---|
| File the FAFSA | Be in default on any educational loan or owe repayment on a federal grant |
| Complete the ADU Aid Application | Borrow in excess of federal loan limits |
| Be a U.S. Citizen or eligible non-citizen | |
| Have a high school diploma or equivalent | |
| Be classified as degree seeking at ADU in an eligible program | |
| Be enrolled at least half-time at ADU | |
| Maintain Satisfactory Academic Progress (SAP) | |
| Complete verification if selected | |
| Satisfy all selective service requirements | |
| Complete the Master Promissory Note | |
| Complete the Entrance Loan Counseling |
Interest Rates
Effective July 1st 2010 Federal Direct Subsidized Stafford loans will have a fixed interest rate of 4.5% for the undergraduates and 6.8% for graduates, and Federal Direct Unsubsidized Stafford loans will have a fixed interest rate of 6.8%.
Loan Fees
Direct Stafford Loans have a 2% guarantee fee. There’s an up-front rebate of 1.5%, so the net disbursement is 99.5% of the gross loan amount. The borrower must make the first 12 payments on time to keep the rebate.
Disbursement of Loans
- Disbursement of financial aid will begin approximately 1 - 2 weeks following Drop/Add and continue each week throughout the trimester students complete and meet all eligibility requirements.
- Once the disbursements are posted, you may view them at my.adu.edu. Charges will be deducted at that time.
- Any remaining amount of financial aid will be processed as a refund.
- If charges remain on your account after disbursements or if subsequent charges are made to your student account, it is your responsibility to pay for them.
Repayment and Consolidation
When you near graduation (or drop below half time) you will be given information on loan repayment and consolidation. This is referred to Exit Loan Counseling.
