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The Direct Stafford Loan provides loan assistance to law students through the federal government. Students may borrow up to $20,500 per year through this program. The Stafford loan interest rate is fixed at 6.8%.
Stafford loans are available in two forms, subsidized and unsubsidized. For those who qualify based on need, up to $8,500 is covered by a subsidized loan for which no interest accrues while students are enrolled at least half-time in law school and during the six-month grace period prior to repayment. The remaining $12,000 -- or more, if the student does not qualify for the full $8,500 subsidized loan (up to $20,500) -- is an unsubsidized, non need-based loan for which interest accrues, but may be deferred, while students are enrolled in law school.
Stafford loan repayment is deferred until six months after graduation or less than half-time enrollment.
The Stafford is divided into equal disbursements per term of at least half-time enrollment. There is a 2.5% fee (reduced to 2.0% as of July 1, 2008) deducted by the lender, with a 1.5% on-time repayment incentive added back in at each disbursement. A Direct Loan Master Promissory Note (under Subsidized/Unsubsidized) must be signed if one is not on record at the Direct Loan Origination center.
After being awarded the Stafford loan, students must sign a Direct Stafford Master Promissory Note, complete entrance counseling, be enrolled at least half-time and maintain academic satisfactory progress in order to receive this loan.
Please see www.ed.gov/DirectLoan for more information on the Federal Direct Stafford loan.
Perkins loan amounts from $1,000 to $1,200 are awarded to a small number of students determined to have exceptional need. Perkins loans do not accrue any interest until nine months after graduation or less than half-time enrollment, at which time a 5% interest rate is charged.
Graduate students may borrow the Federal Direct Graduate and Professional Student PLUS Loan (Grad PLUS) up to the cost of attendance less other financial aid. The Grad PLUS has a fixed interest rate of 7.9%. It is a credit-based federal loan and an endorser (co-signer) may be required. There is no grace period although students enrolled half-time or more may receive an in-school deferment. There is legislation pending that may allow for a six month grace period in the future. There is a 4% origination fee with an upfront 1.5% on time repayment incentive resulting in a 2.5% fee that may be added to the loan balance. The Grad PLUS may be consolidated with Stafford and Perkins loans, unlike private loans.
The Grad PLUS is also eligible for public interest loan forgiveness, Income Based Repayment loan forgiveness and has more deferment and forbearance options than private loans. Please see Alternative Loans for more information, including a comparison of benefits between the Grad PLUS and private loans You must complete a Grad PLUS Request Form and the Grad PLUS promissory note at www.dlenote.ed.gov.
For answers to any questions you have about financial aid, please contact Student Financial Services at lawfa@seattleu.edu or (206) 398-4250.