About Federal Stafford Loans
Your school's financial aid office determines your eligibility for the Federal Stafford loan based on the information you supply on the FAFSA. Before you borrow, you may want to get a better understanding of the loan application process. Also, check out our Education Loan Fact Sheet for loan limits, fees, and other details on FFELP loans.

There are two types of Federal Stafford loans:

Subsidized

The government pays the interest on these loans until you enter repayment, if you demonstrate financial need.

Unsubsidized

If you do not demonstrate financial need, you are responsible for paying interest that accrues during school, grace and deferment periods. If not paid while in school, interest is added to the loan principal (capitalized) at the end of the grace period. Your grace period ends 6 months after you graduate, leave school or drop below half-time status).

Things to remember about Federal Stafford loans:

• The interest rate is variable, adjusted annually, and cannot exceed 8.25%
• The federal government charges a 3% loan origination fee on Federal Stafford loans, so the amount you receive for your education normally will be the net amount, not the gross amount, that you borrow each year.
• You will have a six-month "grace period" before you are expected to start repaying your loans when you cease being at least a half-time student.
• You have flexibility and choice in repayment terms. You select a repayment plan when you begin to repay your loan, and you can change your choice throughout repayment. View available repayment options.
• You may have up to 10 years to repay your Federal Stafford loan and may be eligible to defer payments if you experience economic hardship or re-enroll in school. Payments may also be stopped temporarily for other reasons (i.e. temporary disability) if your lender approves . This is called a forbearance.
• Several higher education tax benefits are available to Federal Stafford loan borrowers.

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