Subsidized and Unsubsidized Stafford Loans

INTEREST RATE:  6.8% fixed for the life of the loan

FEES:  up to 2.5% from each disbursement

APPLICATION:  Stafford Loan Processing Sheet

DESCRIPTION: Subsidized and Unsubsidized Stafford Loans are the primary source of financial aid for students enrolled in the College of Medicine. There are several players in the Federal Stafford Loan Program:

• THE FINANCIAL AID OFFICE approves your loan based on your FAFSA.
   
• THE LENDER YOU CHOOSE provides the money for your loan.
   
• A GUARANTEE AGENCY insures or guarantees repayment of your student loan to your lender in the event you default or become permanently and totally disabled.
   
• SERVICING COMPANIES are hired by many lenders to administer loan portfolios and to schedule and collect loan repayments.
   
• SECONDARY MARKETS actually buy loans from some lenders and handle all loan repayments. 

Your lender will disburse your loan in two equal installments, the first at registration (provided you have applied in a timely manner) and the second in December or January. Lenders can deduct a 1.5% loan origination fee from each disbursement. This fee is paid to the government by your lender to help offset the cost of the programs. Your guarantee agency may also deduct a 1% guarantee fee from each disbursement.

The terms and conditions of the Subsidized Stafford Loan and the Unsubsidized Stafford Loan are similar with one notable exception: the government subsidizes (or pays to your lender on your behalf) the interest on the Subsidized Stafford Loan during medical school and deferment, but not on the Unsubsidized Stafford Loan. The interest rate charged on all Stafford loans for graduate students is fixed at 6.8% for the life of the loan.

SUBSIDIZED STAFFORD LOAN: The Subsidized Stafford loan is a need-based loan. The Financial Aid Office will use your Expected Family Contribution to determine how much you are eligible to receive. The maximum amount you may borrow in Subsidized Stafford Loans is $8,500 for each academic year. The government will pay/subsidize the interest on this loan during the time that you are in medical school and in authorized periods of deferment, but you will be responsible for all interest that accrues once you enter repayment.

UNSUBSIDIZED STAFFORD LOAN: The Unsubsidized Stafford Loan is not a need-based loan. Most students apply for an Unsubsidized Stafford Loan in addition to their Subsidized Stafford Loan. Unsubsidized Stafford Loans can be used to replace the amount the Department of Education asks you to contribute to your education (your Expected Family Contribution from your FAFSA). The government does NOT pay any interest on Unsubsidized Loans. The interest will be charged to you, the borrower, throughout the life of the loan. The annual maximum you may borrow from the Unsubsidized Stafford Loan will equal your Cost of Attendance minus your other financial aid, up to the federal annual limit for your class year. Students determined ineligible for a Subsidized Stafford Loan can be approved for an Unsubsidized Stafford Loan instead.

HOW TO APPLY: First file your FAFSA, then complete the Stafford Loan Processing Sheet and return it to the Financial Aid Office. You must choose a lender and you must determine how much you would like to borrow.  Once the Financial Aid Office determines your eligibility and processes your loan, we will send you a letter notifying you of your award. We ask that you contact the Financial Aid Office within two weeks if you would like to change any of the loan amounts listed on your Financial Aid Award Letter. Your lender will also send you a Master Promissory Note if they do not have one on file for you. A single Master Promissory Note will authorize your lender to disburse multiple Stafford loans during your four years in medical school, so you will not need to sign another one unless you change lenders.

You may apply for loans at any time throughout the academic year, up to 60 days before the last day of class. To ensure that your loan funds are here by registration, complete and return the Loan Processing Sheet by MARCH 31.

University of Arkansas for Medical Sciences
College of Medicine
4301 W. Markham St., Little Rock, AR 72205

Student Financial Aid: (501) 686.5813 E-mail: GEDaulton@uams.edu
Student Admissions: (501) 686.5354 / E-mail: southtomg@uams.edu
Center for Diversity Affairs: (501) 686.7299 / E-mail: cda@uams.edu
Office of Alumni Affairs: (501) 686.6684/ E-mail: Ginny Rice
Dean's Office: (501) 686.5349
 

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