Stafford Loans For Students

Direct Stafford Loans, from the William D. Ford Federal Direct Loan (Direct Loan) Program, are low-interest loans for eligible students to help cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school. Eligible students borrow directly from the U.S. Department of Education (the Department) at participating schools.

Stafford Loans are available for undergraduate and graduate students and come from Direct Stafford Loans made by the U.S. Department of Education. You will repay a Federal Direct Stafford Loan to the U.S. Department of Education.

Direct Stafford Loans include the following types of 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.

Stafford Loan

The term “Stafford Loan” may refer to a subsidized or unsubsidized Federal Stafford Loan that was made to students attending schools that previously participated in the Federal Family Education Loan (FFEL) Program. No new loans have been made under the FFEL Program since July 1, 2010. 

However, many people and schools also informally use the term “Stafford Loans” or “Direct Stafford Loans” to refer to Direct Subsidized Loans and Direct Unsubsidized Loans made under the William D. Ford Federal Direct Loan (Direct Loan) Program. If a school today says that it offers “Stafford Loans” or “Direct Stafford Loans” to its students, this means Direct Subsidized Loans and Direct Unsubsidized Loans.

How much money can I borrow in federal student loans?

The amount of money you can borrow in federal student loans depends on the loan type and your student status (undergraduate or graduate). For Direct Subsidized Loans and Direct Unsubsidized Loans, there are limits on the amount you can borrow each academic year (annual loan limits) and the total amounts you can borrow for undergraduate and graduate study (aggregate loan limits).

Annual loan limits vary depending on your year in school and whether you’re a dependent or independent student (your dependency status). The actual loan amount you’re eligible to receive each academic year may be less than the annual loan limit.

  • If you’re an undergraduate, the maximum combined amount of Direct Subsidized and Direct Unsubsidized Loans you can borrow each academic year is between $5,500 and $12,500, depending on your year in school and your dependency status.
  • If you're a graduate/professional student, you can borrow up to $20,500 in Direct Unsubsidized Loans each academic year.

Graduate/professional students and parents of dependent undergraduate students can also borrow Direct PLUS Loans. There are no fixed annual or aggregate loan limits for Direct PLUS Loans. The maximum Direct PLUS Loan amount that a graduate/professional student or parent can borrow is the cost of attendance minus other financial aid received.

Financial AID Program Benefits

Stafford Loans For Students Benefits

Stafford Loans offer several benefits to students, making them a popular choice for financing education. Here are some of the key benefits:

  • Fixed Interest Rates: Stafford Loans have fixed interest rates, meaning the rate remains the same for the life of the loan. This provides borrowers with predictability and stability in planning for their loan repayments.
  • Subsidized Interest for Qualifying Students: For students with demonstrated financial need, the government subsidizes the interest on subsidized Stafford Loans while the borrower is in school at least half-time, during the grace period, and during deferment. This can save borrowers money compared to loans where interest accrues immediately.
  • No Credit Check (for most borrowers): Stafford Loans do not typically require a credit check for most students. This makes them more accessible to a broader range of students, including those who may not have established credit.
  • Flexible Repayment Options: Stafford Loans offer various repayment plans, including income-driven repayment options. This flexibility allows borrowers to choose a plan that aligns with their financial situation after graduation.
  • Deferment and Forbearance Options: Borrowers facing financial difficulties may be eligible for deferment or forbearance, which temporarily postpones or reduces loan payments. During deferment on subsidized loans, the government may cover the interest.
  • Loan Forgiveness Programs: Some borrowers may be eligible for loan forgiveness programs, such as Public Service Loan Forgiveness (PSLF). PSLF forgives the remaining balance on qualifying loans after 120 qualifying monthly payments while working full-time for a qualifying employer.
  • Grace Period: Stafford Loans typically have a six-month grace period after graduation or when a student drops below half-time enrollment. During this time, borrowers are not required to make loan payments, giving them a transition period to find employment and get financially settled.
  • No Prepayment Penalty: Borrowers can make extra payments or pay off the loan early without incurring prepayment penalties. This allows individuals to save on interest by paying down their loans ahead of schedule.

While Stafford Loans offer these benefits, it's essential for borrowers to be aware of the terms and conditions of the loans and to borrow responsibly. Understanding the long-term implications of student loans and exploring other financial aid options should be part of a comprehensive approach to financing education.

Key features of Stafford Loans

  • Eligibility: To be eligible for a Stafford Loan, students must be enrolled at least half-time in a degree or certificate program at an eligible institution.
  • Loan Limits: There are both annual and aggregate (lifetime) limits on how much a student can borrow. The limits vary depending on factors such as the student's grade level and dependency status.
  • Interest Rates: The interest rates on Stafford Loans are fixed and set by the federal government. Subsidized and unsubsidized loans may have different interest rates.
  • Repayment: Repayment typically begins six months after the student graduates, leaves school, or drops below half-time enrollment. There are various repayment plans available, and borrowers may be eligible for loan forgiveness or income-driven repayment options.
  • Application Process: To apply for a Stafford Loan, students must complete the Free Application for Federal Student Aid (FAFSA). The information provided on the FAFSA is used to determine eligibility for federal student aid, including Stafford Loans.

It's important for students to carefully consider their borrowing needs and explore other forms of financial aid before taking out student loans. Additionally, understanding the terms and conditions of the loans, as well as the potential long-term impact on finances, is crucial for responsible borrowing.

Free Application For Federal Student AID Program Benefits

Stafford Loans For Students

Stafford Loans, also known as Federal Stafford Loans or Direct Stafford Loans, are a type of federal student loan available to eligible students to help cover the costs of higher education. These loans are part of the William D. Ford Federal Direct Loan Program, and they come in two main types: subsidized and unsubsidized.

Subsidized Stafford Loans:

  • These loans are based on financial need.
  • The federal government pays the interest on the loan while the student is in school at least half-time, during the grace period (the six months after leaving school), and during deferment (postponement of loan payments).

Unsubsidized Stafford Loans:

  • These loans are not based on financial need.
  • Interest accrues on the loan from the time it is disbursed until it is paid in full. Students can choose to pay the interest while in school or allow it to accrue and be capitalized (added to the principal amount of the loan).

Additional Information

Max Loan Length30 years, depending upon amount borrowed and repayment plan chosen
Interest RateVariable, does not exceed 8.25%
Max Loan Amountup to $20,500 annually
Payment FrequencyMonthly
Prepayment PenaltiesNone
FeesUp to 4% of the loan

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.

Application Process

To apply for 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), 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.

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, click here.

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

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.

General Research Loan Repayment Program Benefits

Am I eligible for a Direct Subsidized Loan?

To be eligible for a Direct Subsidized Loan, you must be an undergraduate student with financial need. To apply for any Direct Loan, you must first complete and submit the Free Application for Federal Student Aid (FAFSA®) form. Your school will use the information from your FAFSA form and the school's cost of attendance to determine the types and amounts of student aid you’re eligible to receive. If you qualify for a Direct Subsidized Loan, it generally  will be included as part of your financial aid package.

What if I need more student loans?

Contact your school’s financial aid office to find out if you’re eligible for additional federal student loans. Some private institutions offer education loans that do not require the Free Application for Federal Student Aid (FAFSA®) form. While we recommend federal aid first, we realize it doesn’t always cover the cost, especially for pricier schools. Remember to borrow only what you need to pay your educational expenses.

Am I eligible for a Direct Unsubsidized Loan?

Direct Unsubsidized Loans are available to undergraduate, graduate, or professional degree students enrolled at least half-time at a school that participates in the Direct Loan Program. Financial need is not required to qualify.

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.


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