Federal Stafford Loans

Federal Stafford Student Loans - an introduction

College student.Stafford loans are educational loans to students enrolled in undergraduate, graduate and professional degree programs. There are two types of Stafford Loans, subsidized or unsubsidized, depending on financial need.

Stafford loans can be made through the Direct Loan Program (Direct Stafford Loans), loans from the U.S. Dept. of Education through your school or through the Federal Family Education Loan Program (FFEL Stafford Loans) in which private lenders supply the funds of the loan.

Some of the Stafford Loans features:

  • Fixed interest rate (6.8%) for loans disbursed after July 1st, 2006
  • Two types: subsidized or unsubsidized based on financial need
  • Interest accrues during school, grace and forbearance periods with Stafford Loans
  • Accrued interest is paid by the U.S. Government with subsidized Stafford Loans and it not with unsubsidized Stafford Loans.
  • Can be Direct Stafford Loans (through your School) or FFEL Stafford Loans (through private lenders) depending on your school.
  • Undergraduate, Graduate and Professional students (full or part-time)
  • Between 10 and 25 years to repay (depending on total amount owed and repayment plan)

Stafford Student Loan Details

Interest Rate Details, Fees and Repayment:

Currently, Federal Stafford Loans have a fixed interest rate of 5%. There are no additional fees charged for Stafford loan to apply for and obtain the loan. There may be fees/additional costs for late or collection accounts.

Repayment of Stafford loans begins 9 months after graduation, leaving school or drop below half-time status. The grace period may be different for students who drop below half-time status (check with your School's Financial Aid Office). During the grace period no interest is charged on Stafford loans.

Maximum Loan Amounts:

  1. Undergraduate Student: $4,000/yr | $20,000 max. undergraduate
  2. Graduate Student: $6,000/yr | $40,000 max. including undergraduate
  3. Professional Student: $6,000/yr | $40,000 max. including undergraduate

How to get a Stafford Student Loan

Steps to obtaining a Stafford Loan:

  1. Obtain Federal Student Aid PIN @ http://www.pin.ed.gov
  2. Complete FAFSA (Free Application for Student Aid) @ http://www.fasfa.ed.gov
  3. List the Schools you want to attend on FAFSA application (up to 6)
  4. Your FAFSA is processed, generating a summary call a "SAR" (Student Aid Report)
  5. Your SAR is sent to schools you listed on your FAFSA (copy sent to you as well)
  6. Schools process your SAR and then, send you an "Award Letter" listing specific financial aid that school is offering you, including a Stafford Loan if your qualify

More resources for Student Loan Consolidation