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Recently, Congress passed a law increasing the maximum amount of Stafford Loan that a student may borrow in a year. Beginning with the 2008-2009 Academic Year, students will be eligible to for an additional $2000 in Stafford Loan. This will be in the form of an Unsubsidized Stafford Loan. The following charts show the Stafford Loan limits for 2008-2009 by class:

Dependent Students:

Independent Students or Dependents Students whose parent is denied a PLUS Loan:

Subsidized and Unsubsidized Stafford Loans have two major differences. The first is that Subsidized Stafford Loans do not accure interest while the student is in school or during the six month grace period immediately following school, while Unsubsidized Stafford Loans do accrue interest during these time. The other difference is the interest rates. The following chart shows the differences between interest rates for Subsidized Stafford Loans and Unsubsidized Stafford Loans:

Let’s look at a couple of examples to illustrate the possibilities.

Example 1:

First Year dependent student with $10,000 need and their parent will qualify for a PLUS Loan. This student would receive:

Example 2:

Sophomore dependent student with $3000 of need and their parent will not qualify for a PLUS Loan. This student would receive:

Example 3:

Senior dependent student with $4,500 of need and their parent will qualify for a PLUS Loan. This student would receive:

Example 4:

Junior independent student with $15,000 of need. This student would receive:

Hopefully, this will clarify the new Stafford Loan limits for the 2008-2009 Academic Year.