Federal Stafford Loan Changes for 2008
As of July 1, 2008 the federal Stafford Loan will undergo two important changes for undergraduate borrowers. First, if you have qualified for a “subsidized” Stafford Loan, the fixed interest rate you will be charged has been decreased to 6.0% from 6.8%. Second, all undergraduate borrowers will be able to access $2,000 per year more than was possible last year. Additionally, undergraduate Stafford Loan borrowers who are “independent” may see borrowing amounts increased even more.
The following outlines the yearly borrowing limits for Stafford Loans.
| Year in School | Dependent Students | Independent Students |
| Freshman | $5,500 | $9,500 |
| Sophomore | $6,500 | $10,500 |
| Junior/Senior/5th Year | $7,500 | $12,500 |
| Graduate & Professional Students | $20,500 | |
| Medical Students | $40,500 | |
The aggregate borrowing amounts are outlined below:
| Dependent Undergraduate Students | $31,000 |
| Independent Undergraduate Students | $57,500 |
| Graduate | $138,500 |
| Medical | $224,00 |
Students whose parents were denied a PLUS loan are generally treated as Independent Students. Read more about this unique case.
You can shop around for Stafford Loans at SimpleTuition.
Private Student Loan Implications
Due to the changes in federal Stafford Loans, private student loan borrowing should decrease. That’s a good thing, because private student loan rates and fees are almost always higher than on federal loans. However, the high cost of college means that private student loans are likely to continue to be a reality for millions of students.
