Stafford Loans

Stafford Loans are a major form of self-help aid for students. Depending on the school you attend, your Stafford Loans may be made either through the Direct Loan Program or through the FFEL Program. Generally, schools participate in the Direct Loan Program or the FFEL Program, but not both. Direct and FFEL Stafford Loans have identical eligibility requirement and loan limits. The major difference between the two programs is the source of the loan funds
and repayment options. Under the Direct Loan Program, the U.S. government loans you the funds. Under the FFEL Program, the funds for your loan are lent to you from a private lender (a bank, credit union, or other lender that participates in the FFEL Program).

Loan repayment options differ somewhat. The Direct Loan and FFEL programs also offer PLUS Loans to parents of dependent students (see page 19) and Consolidation Loans (see page 21).

What kinds of Stafford Loans are available?
Direct and FFEL Stafford Loans are either subsidized or unsubsidized. You can receive a subsidized loan and an unsubsidized loan for the same enrollment period.

A subsidized loan is awarded on the basis of financial need (see page 8). You will not be charged any interest before you begin repayment or during authorized periods of deferment (see page 16). 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 is paid in full. If you allow the interest to accumulate while you are in school or during other periods of nonpayment, it will be capitalized-that is, the interest will be added to the principal amount of your loan and
additional interest will be based upon the higher amount.

NOTE: If your interest is capitalized, it will increase the amount you have to repay. If you choose to pay the interest as it accumulates, 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.


Go on to Federal Pell Grants - Page 14 - Stafford Loans Part II Page 16 - Stafford Loans Part III Page 17