Section 3: Borrowing wisely

Federal Stafford Loans have both annual and aggregate (cumulative) limits. These limits depend on your academic level, previous amounts borrowed, your status as a dependent or independent student, the length of the academic period for which you are enrolled, receipt of other aid, and cost of attendance.

The University of Connecticut has offered you the maximum Federal Stafford Loan for which you were eligible based on the above factors. You have the right to decline all or any portion of this loan. Here are some tips for keeping your student loan debt at a manageable level:

Borrow conservatively! Once you are out of school, you will have to repay the loan. You should borrow only what you actually need for education related costs. This will keep you from accumulating a large debt and allow you to manage your monthly payment when you have finished school. If you can reduce your expenses, you might not need to borrow the full amount you were offered.

If you don’t need the full Stafford amount you were awarded, reduce the unsubsidized portion of the loan first. Students who were offered both subsidized and unsubsidized Stafford Loans should reduce or decline the unsubsidized loan before reducing the subsidized loan. Remember that the government pays the interest that accrues on subsidized loans while you are in-school!

Exhaust your federal loan options if you need to borrow more than the maximum Stafford amount. If you find that your resources are not enough to cover your educational expenses and you need to borrow more, make sure you have used your full federal loan eligibility. Be sure that you are utilizing any Perkins loans (these would be offered in your financial aid award if you were eligible) and PLUS loans (federal loans for parents of dependent undergraduates and for graduate students) before turning to more costly alternative loans. If your parent applies for and is denied a PLUS loan, you may be eligible for additional Stafford Loan funds.