Stafford Loan Program
When considering student loans to pay for your education, information, research and fact gathering becomes
Remember: the decisions you make with student loans can impact you for years to come.
Meaning, after graduation, you will be expected to pay back the money you borrowed.
The caveat here is to borrow wisely.
As we say throughout the Student Loan Whiz website, "Get to know all of your options!"
In terms of the Stafford Loan Program, we are going to provide everything you need to know to make the
application process, quick and easy to understand.
If you have any questions, be sure to check our sitemap first. We offer Student Loan
Help and advice to make sure that you make the right decisions.
Also, this section on the Stafford Loan Program is pretty extensive, so you are sure to find the information you
What is a Stafford Loan?
Stafford Loans are among the most popular and available of federal
student loan programs.
If you're a graduate or undergraduate student enrolled in an eligible program of study on at least a half time
basis, you are essentially eligible to apply for a Stafford Loan.
There are two types of Stafford Loans available, subsidized and unsubsidized.
Subsidized Stafford Loan
With a subsidized Stafford Loan, the federal government pays the
interest on the loan:
(a) While you're in school
(b) For six months after graduation, and
(c) During any approved deferment periods.
To qualify for a subsidized Stafford Loan, you must demonstrate financial need. Consequently, not everyone is
eligible. Your financial need is based on the income and asset information you provide on the financial aid
application, known as the FAFSA.
Unsubsidized Stafford Loan
With an unsubsidized Stafford Loan, you are responsible for
paying the interest that accrues during the school year, in the six-month period after graduation, and during any
deferment periods. Unsubsidized Stafford Loans are not based on financial need; therefore students at all income
levels can obtain them.
The terms and conditions of both loans are similar, and each has specific annual borrowing limits. If you're
interested in applying for a Stafford Loan, you should first talk to a financial aid counselor.
One final note: Your lender for a Stafford Loan (subsidized or unsubsidized) can be either the federal
government (through the Direct Loan Program) or a private lender (through the Federal Family Education Loan
Program). In most cases, you don't choose your lender. Instead, the college will tell you which lender it
Stafford Loans Facts
Schools Generally Participate in one of These Two Stafford Loan
(a) The William D. Ford Federal Direct Loan (FFDL) Program
(b) The Federal Family Education Loan (FFEL) Program
Under the Direct Loan Program, the funds come directly from the federal government. Funds for the FFEL will come
from the bank, credit union, or other lender that participates in the program.
The terms and conditions of both lending programs are similar. The amounts you may borrow are the same whether
you get a Direct Stafford Loan or a FFEL Stafford. The primary differences between the two programs are the source
of the funds and the repayment provisions.
For either type of Stafford Loan, you must fill out a Federal Student Aid Application (FAFSA). After your FAFSA
is processed, your school will review the results and will inform you about your Stafford Loan eligibility. You
will also have to sign a promissory note. In part 2 of the Stafford Loan Program, we'll cover the qualifications
you must meet to apply for a Stafford Loan.
Stafford Loan Program Part 1 |
Stafford Loan Program Part 2
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