Stafford Loans: FAQ
What’s the difference between subsidized and unsubsidized Stafford loans?
It’s all about financial need.
Subsidized Stafford loans are awarded to students with demonstrated financial need. While you’re in school or in an authorized period of deferment, Uncle Sam pays the interest on these subsidized college loans. You won’t be responsible for covering the interest on your subsidized student loan until you’ve left school or dropped below half-time enrollment.
With unsubsidized Stafford loans, you’re responsible for the interest that accrues from the time funds are disbursed to you. Unsubsidized federal student loans aren’t awarded based on financial need; in fact, virtually every college and graduate student is eligible for an unsubsidized Stafford loan. Although interest starts to accrue immediately, you can defer your student loan payments until after graduation.
How much money can I get with a Stafford student loan?
Your maximum allowable Stafford loan amount will depend on your year in school, whether you’re considered a dependent of your parents, and whether or not your parents are eligible for a federal PLUS parent loan.
What if my Stafford student loans still aren’t enough to cover my college costs?
If Stafford loans aren’t enough to pay for college, your parents (if you’re a dependent student) may be able to borrow additional funds in parent loans through the federal PLUS (Parent Loans for Undergraduate Students) program. With PLUS loans, parents can borrow up to the total cost of education at your school, less any other financial aid you’re awarded.
If your parents don’t qualify for a PLUS loan or if federal financial aid otherwise leaves you short, you may be able to get the additional funds you need from private student loans. Private loans are non-federal, credit-based loans offered by banks and private lenders and available to qualilfying undergraduate, graduate, and continuing education students.
How are Stafford loan funds disbursed?
The money from your Stafford student loans is usually disbursed at the beginning of each semester. Funds are paid directly to your school to cover your open bill with the school, and the school distributes any excess funds directly into your campus account or directly to you in the form of a check.
What’s the interest rate on a Stafford loan?
- The interest rates on unsubsidized Stafford loans for undergraduates and on all Stafford graduate student loans is fixed at 6.8%.
- The interest rate on subsidized Stafford student loans for undergraduates issued after July 1, 2008, ranges from fixed rates of 3.4% to 6.0%.
How do I apply for a Stafford student loan?
You’ll need to complete the FAFSA each year that you’re in school in order to be considered for any federal financial aid, including federal Stafford student loans. If you qualify for Stafford student aid, your school should include these student loans in your financial aid package. Contact your school’s financial aid office if you have any questions about your eligibility or award amounts.
Quick Links
» Apply for a Stafford student loan
» Stafford student loans: Overview
» Types of Stafford student loans
» Eligibility for Stafford student loans
» Stafford loan amounts
» Stafford loan rates, fees, and terms
