Costs & Financial Aid

Federal Stafford Loans

Obtaining a Federal Stafford Loan is a four step process for new borrowers:

  1. Complete the FAFSA and provide any additional documents requested
  2. Wait for your award notice with the loan amounts
  3. Go to Loans by Web (LBW) to complete the loan process which includes Entrance Counseling
  4. Print or E-sign your Master Promissory Note in LBW

What is a Federal Stafford Loan

The Federal Stafford Loan is a cooperative effort among lending institutions, educational institutions and guarantee agencies on behalf of the federal government.  Schools determine the amount of the loan, student's eligibility, and the loan period.  Guarantee agencies ensure the repayment of the loan in the event of a borrower's default, disability, or death.  The lender provides the loan funds.

To receive the funds you must be registered at least half-time at UH (6 hours undergraduate, 5 hours graduate) as a degree-seeking student in an eligible program of study.

Federal Stafford loans help you meet your educational expenses. Unlike gift aid, loans must be repaid. Federal Stafford Loans are offered in two forms; subsidized and unsubsidized. For subsidized loans, loan interest is paid on your behalf by the government while you are enrolled as at least a half-time student and during grace or deferment periods. For unsubsidized loans, loan interest accrues within sixty days of disbursement and can be paid while you are in school, or capitalized until you begin repayment. Capitalized interest is added to the principal amount outstanding. For both subsidized and unsubsidized loans, repayment of principal and interest begins six months after you cease to be enrolled at least half-time.

How Much Can I Borrow per Year?

The amount you can borrow annually is based on your dependency status and grade level. Your total financial aid, including Federal Stafford Loans, can never exceed your cost of education. Your award notice recommends the amount you are eligible to borrow. You are not required to borrow that full amount. The limits indicated in the following chart are the federal maximums that you can receive during two terms of enrollment. For Summer Loan Limits with disbursement dates and loan period end date, please see the Summer Data Form Instructions.

Academic Year Loan Limits (Effective July 1, 2008)
  Base Loan
*Additional Unsubsidized
Freshman $5,500 $4,000 $9,500
Sophomore $6,500 $4,000 $10,500
Junior or Senior $7,500 $5,000 $12,500
Post-Baccalaureate $7,500 $5,000 $12,500
Graduate/Professional $8,500 $12,000 $20,500

*The Additional Unsubsidized Loan is granted to Independent students, as well as Dependent students whose parents are denied for the Parent PLUS Loan due to adverse credit.

What is the Maximum Amount I can Borrow?

There are aggregate, or total, loan limits in addition to the annual loan limits. Students may never borrow more than the aggregate loan limit for all subsidized and unsubsidized loans at University of Houston and all other schools. Once you have reached your aggregate limit, you cannot borrow any additional loan funds. These limits have been set by Federal regulations.

AGGREGATE LOAN LIMITS (Effective July 1, 2008)
Base Amount
Undergraduate Dependent Students $31,000 (no more than $23,000 of which can be subsidized)
Undergraduate Independent Students $57,500 (no more than $23,000 of which can be subsidized)
Graduate and Professional Students $138,500 (no more than $65,500 of which can be subsidized

Loans do require repayment. The repayment chart gives you an estimate of what your monthly loan payments will be. Select the amount that you can manage to repay.

Sample Repayment Chart:
Based on 8% interest rate and 10 year repayment period
Borrowed Monthly
$5,000 $61
$10,000 $121
$30,000 $354
$65,000 $795
$100,000 $1,266

You should monitor how much you borrow to ensure that you don't reach your aggregate limit before you complete your program. Use the government Web site to do so.

Federal Stafford Loan Process and Lender Information

NOTE: If you are reading this prior to being awarded a Federal Stafford Loan, please be aware you must complete and submit a Free Application for Federal Student (FAFSA) before we can determine your eligibility for Federal Stafford Loans. Many students rely on federal government loans to finance their educations. These loans have low interest rates and do not require credit checks or collateral. Student loans also provide a variety of deferment options and extended repayment terms. Student loans include the Federal Stafford loans, both subsidized (the government pays the interest while you're in school) and unsubsidized (you pay all the interest, although you can have the payments deferred until after graduation). We will award you to the maximum extent of your eligibility, based on your grade level/classification at the time the award was made. Stafford Loans have a fixed interest rate. All lenders offer the same rate for the Stafford loan, although some give discounts for on-time and electronic payment.

To select a lender first check with the institution that you or your parents have a banking relationship with. Most major banking institutions offer the Stafford Loan Program; do not apply with the lender directly. You will need to lender information when you guarantee your loan. You can also go to Texas Guarantee (TG) Lender Fact Sheet to research a lender. To guarantee your loan you must go to Loans by Web If you want a different loan period you must complete a revision request form before you go to Loans by Web.

In Loans by Web

  1. You will complete Entrance Counseling
  2. You will need to provide reference information. This will be used to contact you in the event your lender can not locate you.
  3. You can reduce the loan amount
  4. If required, you can complete, sign, and submit your Master Promissory Note (MPN) to your lender. Many of our lenders accept MPNs electronically. You can also print the MPN and mail it to the lender.

Student selecting a lender that is not guaranteed with TG must complete a Supplemental Loan Request Form. Funds for Non-TG guaranteed loans will be received by check.  You can terminate this loan anytime before disbursement or up to 30 days after disbursement by providing the SFA office a revision request form.