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Stafford Loans for Students

U.S. Department of Education > Stafford Loans for Students


Program Description:

Stafford Loans are available for undergraduate and graduate students and come from one of two sources:

  • Direct Stafford Loans are made by the U.S. Department of Education. You repay a Federal Direct Stafford Loan to the U.S. Department of Education.
  • Federal Stafford Loans are made through Federal Family Education Loan (FFEL) Program. While FFEL funds come from private lenders, such as banks and credit unions, they are subsidized and supported by the U.S. Department of Education. You repay a FFEL Stafford Loan to the private lender that made the loan or to its designated agency.
Whether you receive a Direct or FFEL Stafford Loan depends on the program in which your school participates. In either case the terms of the loan (loan amounts, interest rate, and other benefits) are generally the same.

For both the Direct and FFEL programs there are two types of Stafford Loans:

A subsidized loan is awarded on the basis of financial need, as determined by the information you submit on the Free Application for Federal Student Aid (FAFSA). If you are eligible for a subsidized Stafford loan you will not be charged interest while you are in school on an at least half-time basis, during a grace period of up to six months after you are no longer enrolled on at least a ?°half-time?± basis, or during certain defined deferment periods. The Federal government pays (subsidizes) the interest during these periods.

An unsubsidized loan is not awarded on the basis of need. But you still must apply using the FAFSA. For unsubsidized loans, you will be charged interest from the time the loan is disbursed until it is paid off in full. However, you can choose to defer payment of interest while you are in school and during any grace or deferment period. However, if you allow interest to accrue (accumulate) during these periods, it will be capitalized. This means that interest will be added to the principal amount of your loan, and additional interest will be based on that higher amount.


General Program Requirements:

To qualify for this program, you must be enrolled in a postsecondary educational program leading to a postsecondary degree or certificate. There are other requirements. For more information, read The Student Guide online at





Loan Terms:

Maximum Loan Amount: up to $20,500 annually (depending on your grade level, your status as a dependent or independent student, your status as an undergraduate or a graduate student, and your total cost of attendance).

Interest Rate: The interest rate is variable (adjusted annually on July 1st) but does not exceed 8.25 percent. You'll be notified any time the variable rate changes. For the current Stafford Loan interest rate, go to

Maximum Loan Length: 30 years, depending on amount borrowed and repayment plan chosen. There are a number of repayment plans offered through the Direct and FFEL programs. For more information about repayment, read the Repaying Your Student Loan online at

Frequency of Payments: monthly or quarterly. After you graduate, leave school, or drop below half-time enrollment, you have a six-month grace period before you begin repayment.

Prepayment Penalties: none

Fees: You'll pay a fee of up to four percent of the loan, deducted proportionately from each loan disbursement. Because of this deduction, you'll receive slightly less than the amount you're borrowing.


Application Process:

To apply for FFEL or Direct Stafford Loans, fill out the Free Application for Federal Student Aid (FAFSA). You can apply online using FAFSA on the Web (the faster and easier way) at

or you can get a paper FAFSA from your high school, local library, postsecondary school, or by calling the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243). TTY users for the hearing impaired can call 1-847-688-2567.

If you applied for Federal student aid for the previous school year, you can probably file a Renewal FAFSA for the next year. By using a Renewal FAFSA, you will only have to update any information that has changed and fill in a few new answers.


Program Contact Information:

To determine whether you are eligible to receive assistance through this program, you must first complete a Free Application for Federal Student Aid (FAFSA). Schools use this information from the FAFSA to determine your eligibility for most Federal student aid programs and for many state, institutional, and private aid programs.

You may complete the FAFSA online, through this website:


Managing Agency:

U.S. Department of Education

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