What is a Federal Stafford Loan
There are many different types of stafford education loans. Learn about stafford loans so that you can find the right stafford student loan to help pay for your education.
Direct and FFEL Stafford Loans have variable interest rates (unlike Federal Perkins Loans) and are for both undergraduate and graduate students. The loans you receive will be either subsidized or unsubsidized.
* A subsidized loan is awarded on the basis of financial need. You won't be charged any interest before you begin repayment or during deferment periods (click here for more information). The federal government subsidizes the interest during these periods.
* An unsubsidized loan is not awarded on the basis of need. You'll be charged interest from the time the loan is disbursed until it's paid in full. If you allow the interest to accrue (accumulate) while you're in school or during other periods of nonpayment, it will be capitalized. This means the interest will be added to the principal amount of your loan, and additional interest will be based on that higher amount.
NOTE: If your interest is capitalized, it will increase the amount you have to repay. You can choose to pay the interest as it accumulates; if so, you'll repay less in the long run.
Who can get a Stafford Loan?
If you're a regular student enrolled in an eligible program at least half time, you may receive a Direct or FFEL Stafford Loan. You must also meet other general eligibility requirements.
How do I get this loan?
You apply using the FAFSA or Renewal FAFSA (see Applying), just the way you would for other federal student aid. Then, you sign a promissory note that you'll get from your lender, for FFEL Stafford Loans, or from your school, for Direct Loans. The promissory note is a binding legal document; when you sign it, you're agreeing to repay your loan under certain terms. Read the note carefully and save it.
How much can I borrow?
The amounts you can borrow depend on your grade level in school and on the type of student you are: dependent undergraduate, independent undergraduate (or a dependent undergraduate whose parents are unable to get a PLUS Loan), or a graduate student.
Back to Types of Finanical Aid
"An investment in knowledge always pays the best interest. ~Benjamin Franklin"
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