Students cannot work over the award amount allocated for a work-study assignment. The Federal Stafford Student Loan Program consists of low-interest loans made to students by a lender such as a bank, credit union or savings and loan association. Students who qualify may apply for a Stafford Loan. The 2000-2001 interest rate for Stafford Loans is variable with a cap of 8.25 percent. Applicants must demonstrate financial need to receive a subsidized Stafford Loan.
Unsubsidized borrowers are responsible for the interest during in-school and deferment periods.
The lender may permit the interest to accumulate until the borrower completes schooling or deferment ends. The interest will be added to the principal due and will increase the amount of the principal to be repaid. A fee of up to 4 percent will be deducted proportionately from each loan disbursement. For periods of study that are less than an academic year, borrowing amounts may be lower. Repayment begins six months after the borrower graduates, withdraws from college, or drops below part-time status.