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  • 5m.

    Unsubsidized Stafford Loans: Before You Borrow

    Unsubsidized Stafford loans are federal student loans that don't require you to have financial need. Unlike subsidized loans, interest will accrue over the entire life of an unsubsidized loan.
    Updated: July 1, 2017

    What You'll Learn

    • What it takes to qualify for unsubsidized Stafford loans.
    • The current interest rates on these loans.
    • Why it's smart to start repaying them while you're in school.
    A woman reading a book in the library

    The Highlights

    Who can borrow these loans?

    Undergraduate and graduate students

    How much can I borrow each year?

    Annual limits vary (see details below)

    How much can I borrow in total?

    Maximum limits vary (see details below)

    What's the current interest rate*?

    4.45% for undergraduates

    6% for graduate students

    Am I responsible for paying the interest?


    Dig Into The Details

    Who Can Borrow These Loans?

    Undergraduate and graduate students can borrow unsubsidized Stafford loans to help finance their education costs.

    You do not need to demonstrate financial need to borrow an unsubsidized Stafford loan, but you still need to complete the Free Application for Federal Student Aid (FAFSA) to apply. You also need to be:

    • A U.S. citizen or eligible non-citizen.
    • Enrolled at least half time at an eligible institution.

    How Much Can I Borrow?

    The amount you can borrow in unsubsidized Stafford loans each year varies based on the factors listed below. However, there's no total borrowing limit—you just can't borrow more than the cost of attendance at your school, minus all of the other aid you have received.

    Dependent Undergraduate Students

    Each year, if you are a dependent undergraduate student, you can borrow a base amount of Stafford loans. These can be either subsidized or unsubsidized. The loan type depends on your financial need, which is determined by the FAFSA.

    The base amounts you may borrow in unsubsidized Stafford loans (if you are ineligible for the loans to be subsidized) are:

    • Up to $3,500 for your first year of school.
    • Up to $4,500 for your second year.
    • Up to $5,500 for your third year and beyond.

    Whether you receive your base amount in subsidized or unsubsidized funds, you may still be eligible for up to an additional $2,000 per year in unsubsidized funds as long as the total doesn't exceed your cost of attendance.

    As a dependent undergraduate student, you can borrow up to a maximum of $31,000 in Stafford loans. Of that $31,000, no more than $23,000 may be in subsidized funds.

    Undergraduate Independent Students And Dependent Students Whose Parents Are Unable To Borrow A PLUS Loan

    You can also borrow the base amount of Stafford loans if you are an undergraduate independent student or dependent student whose parents are unable to borrow a Parent PLUS loan. These can be either subsidized or unsubsidized Stafford loans, depending on your financial need.

    Additionally, if your aid has not exceeded your cost of attendance, you may be eligible for unsubsidized funds of:

    • Up to an additional $6,000 in your first and second years (for a total of $9,500 for your first year and $10,500 for your second year, including your base amounts).
    • Up to an additional $7,000 in your third year and beyond (for a total of $12,500 for your third year and beyond, including your base amounts).

    Undergraduate independent students and dependent students whose parents are denied PLUS loans can borrow up to a maximum of $57,500 in Stafford loans (the maximum $23,000 in subsidized Stafford loans still applies).

    Graduate Students

    As a graduate student, you may borrow up to $20,500 per year in unsubsidized Stafford loans. You may borrow up to a lifetime maximum of $138,500 in Stafford loans, which includes your undergraduate awards.

    Medical and health professions students have the option of borrowing higher amounts in this program.

    As of July 1, 2012, all Stafford loans for graduate students are unsubsidized.

    What's The Current Interest Rate?

    For undergraduates, unsubsidized Stafford loans disbursed from July 1, 2017, to June 30, 2018, have an interest rate of 4.45%. For graduate students, unsubsidized Stafford loans disbursed from July 1, 2017, to June 30, 2018, have an interest rate of 6%.

    For undergraduates, unsubsidized Stafford loans disbursed from July 1, 2016, to June 30, 2017, have an interest rate of 3.76%; for between July 1, 2015, and June 30, 2016, 4.29%; for between July 1, 2014, and June 30, 2015, 4.66; and for between July 1, 2013, and June 30, 2014, 3.86%. For graduate students, the rates for these time periods are 5.31%, 5.84%, 6.21%, and 5.41%, respectively. Unsubsidized Stafford loans disbursed on July 1, 2006 and before July 1, 2013, have an interest rate of 6.8% for all undergraduate and graduate students.

    Am I Responsible For Paying The Interest?

    Yes, you are responsible for any interest that accrues over the entire lifetime of your unsubsidized Stafford loans.

    Interest begins accruing on these loans when they are disbursed. You may postpone payments with an in-school deferment while you are enrolled at least half time. However, interest will continue adding up on your loans during this time. When your loan goes into repayment, the interest capitalizes (gets added to your principal balance)—so you'll have to pay interest on the capitalized amount as well as your initial loan balance.

    You can make monthly or quarterly interest payments on these loans. If you do so while you're still in school, you can prevent or reduce the capitalization.

    Be Money Smart

    Here's a little more info about how much you could save by making interest-only payments while you're in school.

    Let's say you borrowed a $20,000 unsubsidized Stafford loan with a 6% interest rate to help pay for grad school. After 2 years in school, about $2,400 worth of interest would be added to the debt. When it enters repayment, the new balance would be $22,400.

    If you paid that amount off using the standard 10-year, 120-payment plan, the $20,000 loan ends up costing about $29,842. But, if you pay the interest while you're in school, the total bill after 10 years would be almost $3,200 lower!

    Want to learn more about repaying unsubsidized Stafford loans? Check out this article. If you decide to apply, you'll need to fill out the FAFSA.

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