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Federal Stafford Loans are an important form of self-help aid for students. Depending on the school, a Stafford Loan may be made either through the Direct Loan Program or through the FFEL Program. Under the Direct Loan Program, it is the government that loans the money to the student. With the FFEL Program, the funding is from a private lender such as a credit union, bank or other lender.
There are two kinds of Federal Stafford Loans:
- A Subsidized Federal Stafford Loan is a loan in which the interest due on the loan is paid by the federal government as long as the student is in school, during your 6-month grace period following cessation of at least half-time enrollment, and for any periods of authorized deferment after beginning repayment.
- An Unsubsidized Federal Stafford Loan has all the same terms as the subsidized Federal Stafford loan including deferments, interest rates and loan limits. However, the student is responsible for the interest payments while attending school, during periods of authorized deferments and during grace and repayment periods
Dependent undergraduate student can:
- Borrow each year up to $2,625 if they are a first-year student enrolled in a program of study that runs at least a full academic year.
- Borrow $3,500 if the student has completed their first year of study and the remainder of the program runs at least a full academic year.
- Borrow $5,500 if the student has completed two years of study and the remainder of their program runs at least a full academic year.
Other forms of this term include - stafford loans |
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