government aid: Stafford Student Loans

about stafford loans
Government guaranteed fixed rate student loan that covers all or part of your education-related expenses as certified by the institution. Available for both undergraduate and graduate level programs.


Loan Amounts: varies by student grade status: see loan chart
Payments Begin: 180 days after graduation or separation
Interest Rates: fixed for the life of the student loan: see rates
No Restrictions: no credit check or co-borrower required


More Information:

  1. stafford student loan summary
  2. stafford loan advantages and disadvantages
  3. detailed loan information
  4. use this "tally sheet" to add up your aid

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Stafford Student Loan Summary


  • Loan Amounts:
    varies by student grade level: see loan amount chart
  • Interest on the Loan:
    eligible loan amounts may be subsidized or unsubsidized (depending on the financial need of the student)
  • Interest Rates:
    fixed for the life of the student loan
  • No Restrictions:
    no credit check or co-borrower required
  • Loan Processing:
    processed and funded through the college
  • Loan Eligibility:
    loan eligibility requirements include HS diploma, approved DOE certified school, and other eligibility requirements: link to view student eligibility
  • Loan Repayment Terms:
    repayment begins 180 days after graduation or separation from school



money saving tip

Students (and parents) should setup a budget that plans the aid needs and monthly spending amounts for the school year. Download our worksheet that outlines the budget needs for each academic year.

see our discussion on building a school budget

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Loan Advantages and Disadvantages


  • No Credit Checks
    since the funds are guaranteed by the federal government, your credit report is not used in qualifying you for the loan:
    see qualification parameters

  • Low Interest Rate
    federal student loans are fixed rate loans that remain fixed for the entire term of the loan; current rates are lower than most other financing options: view interest rates

  • Flexible Repayment Plans
    student loan payments do not have to be repaid until 180 days after you leave or graduate from school. The federal government offers flexible repayment plans that can fit your budget. You can even consolidate your federal loans into one, low repayment plan.




  • Low Amount Limits
    the biggest disadvantage of stafford loans is the limited loan amounts — only $3,500 for first-year students. Very small amounts considering the cost of education: see loan limits

  • Requires Federal Filings
    you must file the FAFSA form with the federal government in order to apply for stafford loans. The FAFSA filing is used by colleges to determine your financial aid award: see FAFSA file

  • Multiple Borrowings
    you have to file and apply for a loan each academic year.


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Detail Loan Information

Two types of Stafford Student Loans:

  1. Subsidized student government loans are available to students who display a financial need as determined by the EFC (expected family contribution) formula:

    see Step1: qualifying for financial aid

    Interest on subsidized federal student loans is paid by the federal government while you are in school and for up to six months (called the grace period) after you graduate or leave school.

    Student Loan amount limits will apply:
    see loan chart for amounts

  2. Unsubsidized student government loans are available to any student regardless of family need or income level.

    Interest on unsubsidized federal student loans to be paid by the student after loan funds are disbursed. You will be given the option of paying interest on the loan while in school or deferring interest payments while attending school until 6 months after graduation, withdrawal, or when you drop below half-time attendance status (deferred interest will be capitalized and added to the loan amount upon entering repayment period).

    Student Loan amount limits will apply:
    see loan chart for amounts

To qualify for federal student loans, you must meet the following criteria:

    • display a need for financial aid (except for unsubsidized Stafford and PLUS loans).
    • complete high school and have been awarded a high school diploma or a General Education Development (GED) Certificate.
    • pass a college entrance exam approved by the U.S. Department of Education, and/or meet other standards your state may establish.
    • be enrolled or accepted for enrollment as a regular student working at least half-time toward a degree or certificate in an eligible program.
    • be a U.S. citizen or eligible non-citizen.
    • have a valid Social Security number, link to obtain SSN:

    • make satisfactory academic progress.
    • sign a statement on the Free Application for Federal Student Aid (FAFSA) certifying that you will use federal student aid only for educational purposes
    • sign a statement on the FAFSA certifying that you are not in default on a federal student loan and that you do not owe money back on a federal student grant.
    • register with the Selective Service (for young men age 18 and over).
      you can register online:

Different eligibility loan amounts will be awarded for dependent and independent students

  • students who have access to parental support are classified as dependent students
  • dependent students and their parents must report respectively their income and assets on the FAFSA form

Students who display at least one of the following requirements are classified as independent students:

  • you were at least 24 years of age on January 1 of the academic year you begin school
  • you are married
  • you are enrolled in a graduate or professional program (beyond the bachelor's degree)
  • you have legal dependents other than a spouse
  • you are an orphan or ward of the court (or were a ward of the court until age 18)
  • you are veteran of the U.S. Armed Forces ("veteran" includes a student who attended a U.S. military academy who was released under a condition other than dishonorable)

independent students must report only income and assets of their own (and those of their spouse, if married)

Both subsidized and unsubsidized are fixed rate student loans with an upper limit,

Meaning that the rate will remain fixed for term of the loan. Fixed rates are applicable for all loans disbursed after July 01, 2006.

view current Stafford Student Loan rates

You may be required to pay processing fees to the lender upon student loan disbursement.

Portion of these fees go the Federal Government and another portion to the guaranty agency to help reduce the cost of issuing the loans.

Generally these fees are deducted proportionately from each loan disbursement.

Borrowed funds will be paid directly to your school from the federal government.

Your school will first use the money to pay your tuition and fees. Any remaining loan money is credited to your account or paid to you directly.

You may cancel the loan within 14 days after you receive written notification that funds have been credited to your account. Contact your financial aid office for cancellation terms.

Interest paid on student loans qualify a tax reduction

Borrowers who file tax returns can deduct some of the interest paid on their student loans. Taxpayers who have taken out loans to pay for the cost of attending an accredited college for themselves, a spouse, or a dependent may be eligible for this deduction.

see IRS tax publication for more information:
tax benefits of higher education

The repayment period is 10 years under one of the following plans:

  • Standard Repayment Plan:
    you pay a fixed amount per month
  • Graduated Repayment Plan:
    you begin payments that are low (equal to the interest accrued) and then increase over time until full repayment
  • Income-Sensitive Repayment Plan:
    the monthly payments change based upon annual income
  • Extended Repayment Plan:
    allows new borrowers on or after 10/7/98 with a total FFELP debt of at least $30,000 (FDSLP loans offer other repayment terms) to repay their loan (either fixed or graduated) for up to 25 years.

For more information:

facts, insights & reviews on Federal Stafford Loan

financial aid steps in the application process:
reviews the steps required when applying for federal financial aid.

link to the U.S. Department of Education
to download the latest version of the Student Guide

apply online

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