Direct Stafford Loan

Have you heard the term Stafford Loans, Direct Loans, or Federal Direct Loans, or Student Loans? They all mean the same thing.

Direct Stafford Loans

Under the Direct Stafford Loan program, the U.S. Department of Education offers eligible students (at participating schools) two different loan options based on eligibility: Subsidized loans, and Unsubsidized loans. These loan options allow a student to borrow a specified amount to help cover the cost of higher education. These two loan options differ in how eligibility is determined and how interest is accrued. Visit Direct Stafford Loan Information for more specifics about these loans, how they differ, and the loan limit amounts.

We want to help you to understand your borrowing options while at the University of Arkansas. Use our Ask Razorbot chat, or Contact Us.

What is the Processing Fee?

The processing fee is a fee the lender charges up-front for providing you a loan. The processing fee for a loan disbursed:

  1. Between October 1, 2020 and September 30, 2021 is 1.057%.
  2. Between October 1, 2019 and September 30, 2020 is 1.059%.

What is the Interest Rate for student loans?

The undergraduate Direct Stafford Subsidized and Unsubsidized Loans fixed interest rate is

  1. 2.75% for loans disbursed between July 1, 2020 and June 30, 2021.
  2. 4.53% for loans disbursed between July 1, 2019 and June 30, 2020.

The graduate Direct Stafford Unsubsidized Loan fix interest rate is

  1. 4.30% for loans disbursed between July 1, 2020 and June 30, 2021.
  2. 6.08% for loans disbursed between July 1, 2019 and June 30, 2020.

*Interest begins accruing at the time of the first disbursement for a Direct Unsubsidized Loan.

What is Required to Receive Federal Loan Funds?

  1. Fill out and Submit the FAFSA. *The Free Application for Federal Student Aid is required every school year.
  2. The Office of Financial Aid will award your Direct Stafford Loan(s) eligibility and send you an Award Notice with processing instructions. *Please note the timing of awarding varies between semesters.
  3. Accept or decline your loans in UAConnect.
    1. Sign into UAConnect.
    2. Select Financial Aid from your Student Homepage.
    3. Select Accept/Decline Awards.
    4. Select the current Aid Year.
  4. Must be enrolled at least half-time to receive federal loan funds. *Changing enrollment to less than full-time may cause changes in your financial aid.
  5. Complete and sign a Master Promissory Note (MPN for Undergraduates) on studentaid.gov in the Complete Aid Process menu. You will need to log in with your FSA ID. It is advised that you print a copy of the MPN for your records.
  6. Complete Entrance Counseling. Using your FSA ID (the same ID used to sign the FAFSA), log into studentaid.gov and under the Complete Aid Process menu, select the Complete Entrance Counseling link. Indicate you are completing counseling as an undergraduate student, read the information presented, and answer the questions at the bottom of each page

How do I Receive and View My Loan(s)?

  1. Funds are sent directly to the University of Arkansas with a notification sent to your UA email account.
  2. Funds pay eligible charges on your account.
  3. Remaining loan balance is refunded to your bank account.
  4. To view your Financial Aid
    1. Sign into UAConnect.
    2. Select Financial Aid from your Student Homepage.
    3. Select the Aid Year that you wish to view.
    4. Select the Award of interest to view the details by semester.
  5. When your enrollment drops below half-time, complete Exit Counseling.  

When Do I Have to Repay a Loan?

The Repayment obligation begins six months after the student ceases to be enrolled at least half-time.

Payments can be made at any time once the loan has disbursed and does not activate a repayment plan. Even small payments on your loan (while you are over half-time) can help save on the accrued and capitalized loan interest (amount added to the principle loan amount).

Confused? Please view the Financial Aid Videos, Ask Razorbot, Contact a Counselor, or come by the Office. We are here to help you understand your borrowing options and make informed decisions.

UA Student Loan Information

At the University of Arkansas, 39% of undergraduate students borrow federal loans to help pay for college. This percent excludes Direct Parent PLUS Loans.

Students borrow an average of about $21,500 in Federal Direct Loans for their undergraduate study. The monthly loan payment for a borrower repaying this amount through the standard 10-year repayment plan is $229 per month (which may vary based on loan interest rates). An individual student's borrowing may be different.

More information about the university's student debt and financial aid statistics can be found at the US Department of Education's College Scorecard and College Navigator.

UA Cohort Default Rate

A cohort default rate is defined by the U.S. Department of Education as "the percentage of a school's borrowers who enter repayment on certain Federal Family Education Loan (FFEL) Program or William D. Ford Federal Direct Loan (Direct Loan) Program loans during a particular federal fiscal year (FY), October 1 to September 30, and default or meet other specified conditions prior to the end of the second following fiscal year."

The U.S. Department of Education releases official cohort default rates once per year. Fiscal Year 2016 is the most recently released data published by the Department of Education on September 25, 2019. The University of Arkansas' cohort default rate is 4.9%, significantly lower than the national cohort default rate of 10.1%.

More information about cohort default rates can be found at the Department of Education's Official Cohort Default Rate For Schools.

Questions? Ask Razorbot or Contact a Counselor