Federal Stafford Loans

The Federal Stafford Loan is a low-interest federally guaranteed loan. Your school will determine whether you are eligible for a Subsidized Stafford Loan or an Unsubsidized Stafford Loan. These loans are offered to both undergraduate and graduate students alike.

Borrower Benefits

AHELA offers the following borrower benefits on Stafford Loans for Arizona residents or students attending Arizona schools:

• 0.50% Interest rate reduction upon entering repayment and continuing as long as the borrower continues to make on-time payments
• 0.25% Interest rate reduction for enrolling in automatic payments through your savings or checking account

Eligibility

When applying for a Stafford Loan, students must complete the Free Application for Federal Student Aid (FAFSA), be enrolled at least half-time, be a U.S. citizen or permanent resident and may not be in default on Federal education loan.

Interest Rate

Stafford loans have a 6.80% fixed interest rate for all loans first disbursed after July 1st, 2006.

Grace Period

Stafford loans allow you to receive a six-month grace period which begins the date you graduate or drop below half-time. During these six months you may begin repayment but are not required to do so.

Subsidized vs Unsubsidized Stafford Loans

Subsidized Federal Stafford Loans - the federal government pays the interest while you are in-school, grace, and/or in deferment.

Unsubsidized Federal Stafford Loans – you, the borrower, are responsible to pay the interest but can postpone payment while they are in-school, grace and/or deferment. Interest accrues during these periods and is capitalized (added to the principle balance) upon entering repayment.

Repayment

There are three payment plans for you to choose from:

Standard Payment Plan - You pay the same amount each month for up to 10 years towards the principal and interest of the loan. The minimum payment amount is at least $50 per month.

Graduated Payment Plan - You begin repaying your loan with a lower payment, then after 2 years, the payment amount increases. The minimum payment amount is at least $50 per month. Your payment must satisfy at least the interest that is accruing on your account. 

Income-Sensitive Payment Plan - You may repay your loan based on your gross monthly income. You must show income documentation annually and additional documentation may be required. Your payment must satisfy at least the interest that is accruing on your account.
 
Extended Payment Plan - You may take up to 25 years to repay your loan if you received your first loan after October 7, 1998 and your combined loans total $30,000 or more.

Disbursements

Once you have completed your application, your financial aid office will determine your scheduled loan disbursements for the academic year. AHELA will disburse your check to the school on the dates requested. The school will then advise you that the check has been received and the process for picking up the check or having the check deposited directly into your bank account or school account.

Paper Applications

If you are unable to complete your loan application electronically, you may download a paper application to complete and mail.