The Stafford Loan is a federal student loan available to students who (a) are U.S. citizens, U.S. permanent residents, or eligible non-citizens,
(b) are enrolled at least half-time at a participating school, and (c) have completed the Free Application for Federal Student Aid (FAFSA). Nearly
all students who meet these basic criteria are eligible for the loan. Acceptance is not based on credit.
The Stafford Loan can be either subsidized or unsubsidized. For subsidized loans, the government pays the interest for the loan during the payment
deferment period that begins when the student is enrolled at school. For unsubsidized loans, interest accrues during the deferment period, and is
capitalized into the principal amount of the loan once the student graduates or once the student leaves school/drops below half-time enrollment. Both
subsidized and unsubsidized Stafford Loans have fixed interest rates. Currently, the rate for subsidized loans is 6.00%, while for unsubsidized it is 6.80%.
The grace period for Stafford Loans is six months, meaning the first payment of the loan is due on the seventh month after the student has either
graduated, left the school or dropped below half-time enrollment. The amount undergraduate students can borrow through the loan increases with each
completed academic year, and loan amounts vary whether the individual is categorized by the FAFSA as a dependent or an independent student. Graduate
students can borrow up to $20,500 each year in Stafford Loans. There are also lifetime limits which vary and are based on the students dependency
status and level/discipline of study.
Please note: July 1, 2010 all federal loans must be originated through the Federal Direct Loan Program.