What are Stafford loans?
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. You won’ be charged any interest before you begin repayment or during authorized periods of deferment. 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’s paid in full. If you allow the interest to accrue (accumulate) while you’re 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 on that higher amount. NOTE: If your interest is capitalized, it will increase the amount you have to repay. You can choose to pay the interest as it accumulates; if so, you’ll repay less in the long run. Who can get a St
The Federal Stafford Loan is available through the Federal Family Educational Loan Program (FFELP) to help both undergraduate and graduate students pay for their education. There are two types of Stafford Loans–subsidized and unsubsidized. The Subsidized Stafford Loan Eligibility for subsidized loans is based on financial need as determined by federal guidelines. A loan is called “subsidized” because the government pays interest for the student during: • At least half-time enrollment in school • The six-month grace period after the student ceases attendance on at least a half-time basis. The Unsubsidized Stafford Loan This loan is available to students regardless of income or need. With an unsubsidized loan, you are responsible for all interest that accrues during in-school, grace and deferment periods. You may choose to pay the interest portion only while in school, which would keep your loan balance at principal. If you choose to defer such payments, the interest will be capitalized
