Unsubsidized Federal Stafford Loans

The unsubsidized Federal Stafford Loan is a federal student loan that is not based on financial need. Interest accrues on unsubsidized loans from the time the loan is disbursed by the school. If the borrower does not pay the interest as it accrues, it is capitalized (added to the loan balance). The interest is not paid by the federal government. This is the key difference between subsidized and unsubsidized student loans.

(A comparison of subsidized and unsubsidized Federal Stafford Loans discusses other differences between subsidized and unsubsidized Federal Stafford loans.)

Unsubsidized Federal Stafford Loan Quick Facts

  • Interest rate of 4.29% (undergraduate students) or 5.84% (graduate students) for the 2015-2016 academic year
  • Borrow up to $12,500 per year, depending on grade level and dependency status
  • Cumulative loan limit of $31,000 for dependent undergraduate students
  • No payments required while enrolled in college at least half time
  • Low origination fee of about 1%

Unsubsidized Loan Limits

The unsubsidized Federal Stafford loan limits in this table are overall Federal Stafford loan limits . The loan limits are reduced by the amount of any subsidized Federal Stafford loans received by the student.

Unsubsidized Stafford Loan - Annual Loan Limits
Undergraduate Grade Level Dependent Student Independent Student
Freshman $5,500 $9,500
Sophomore $6,500 $10,500
Juniors, Seniors and Beyond $7,500 $12,500
Cumulative Limit $31,000 $57,500

Graduate and professional students may borrow up to $20,500 per year and $138,500 total ($224,000 for certain medical school students) in unsubsidized Federal Stafford loans.

Federal Stafford Loan Limit Increases

In certain circumstances, dependent students may be able to qualify for an increased amount of Federal Stafford Loans, the same loan limits as independent students. Qualifying circumstances include:

  • Dependency Override - If a student has unusual family circumstances (such as incarcerated or institutionalized parents) they may be able to qualify as an independent student and would qualify for the higher independent student limits.
  • PLUS Denial - If a parent is denied a Federal Parent PLUS loan, the student becomes eligible for the higher independent Federal Stafford loan limits.

Unsubsidized Loan Eligibility

Unsubsidized student loans are not need-based funds. Because of this, they are available to most federal aid recipients, regardless of financial circumstances. Even wealthy students may qualify. To receive these loans, students must be enrolled at least half-time in an eligible degree or certificate program, not be in default on any existing federal student loan and meet the basic eligibility criteria for federal student aid.

How to Apply

The application process for unsubsidized Federal Stafford loans is the same as for subsidized Federal Stafford loans. The student must file the Free Application for Federal Student Aid (FAFSA). After the application is complete, the school’s financial aid office will send the student an award letter, detailing the amount and types of aid available.