Stafford Loans Explained

Stafford Loans are the most popular federal student loans available because they are relatively easy to receive and have flexible repayment options of up to 25 years. Stafford loans have a fixed interest rate and require a monthly payment following graduation.

Types of Stafford Loans
There are two types of Stafford Loans: subsidized and unsubsidized. Subsidized Stafford Loans are awarded to individuals with the most financial need. They are termed subsidized because the government subsidizes (pays) the loan’s interest during periods of deferment. Students with lesser financial need may receive unsubsidized Stafford Loans and must pay interest from the time they receive the loan until it is fully repaid.

How Much Can I Borrow?
Your Stafford Loan amount depends on your educational level and enrollment status. Students that will not receive financial help from family members (independent students) are eligible for larger Stafford Loans (and, in most cases, a subsidized loan). Because Stafford Loans are need-based federal student loans, an applicant’s credit score is not taken into consideration when determining the loan amount. Stafford Loans also do not require a cosigner.

How Do I Apply?
To apply for most federal student loans, including Stafford Loans, prospective students must fill out a FAFSA (Federal Financial Aid Application) to determine eligibility.


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