What is a federal Stafford Loan?
A Federal Stafford loan is a low-interest rate loan offered by the Federal Government to students enrolled at least half-time (6 units). They are offered as subsidized or unsubsidized loans as determined by the FAFSA, and students enter re-payment 6 months after they graduate or drop below 6 units.
A Federal Stafford Loan is a loan structured under the Federal Student Loan Program that allows undergraduate and graduate students to borrow money to attend college. They are designed to supplement a student’s personal finances and family contributions to higher education. Students must fill out a Free Application for Federal Student Aid (FAFSA) in order to qualify for Federal Stafford Loans, among other types of federal financial aid. There are many benefits of a Federal Stafford Loan. Just about everyone can qualify for one, no matter their personal financial history or credit score. The loans can be subsidized by the U.S. Government, or unsubsidized. Subsidized means that interest will not accrue while the student is in school. These loans are also based on the financial need of the student. Unsubsidized Stafford loans allow interest to accrue from the loan disbursement date. These loans are also not necessarily based on the student’s financial needs. To qualify for a Federal Staff
A Stafford Loan has the following characteristics: • Available to any student meeting FAFSA eligibility requirements • Subsidized Stafford: If you can demonstrate unmet financial need after Pell grants and other financial aid are factored in, the federal government will pay your interest while youre in school at least half time, for the six months after you leave school, and during a period of deferment. • Unsubsidized Stafford: Available regardless of your financial need or family income, interest begins accruing immediately and repayments must begin within 60 days of the borrowing unless you elect to defer repayments (along with capitalized interest) until after graduation. • Low variable interest rates on Stafford loans originated before July 1, 2006: • 1.88% from July 1, 2009 through June 30, 2010 for borrowers who are in school, in their post-school grace period, or in deferment. Adjusted each July 1 based on the 91-day T-bill rate plus 1.7%. • 2.48% from July 1, 2009 through June
Federal Stafford Loans are offered by the federal government and will be automatically awarded by our office to eligible students who have remaining room in their cost of attendance. The FAFSA must be completed each year for which a student wishes to borrow the Federal Stafford Loan. Additional information about these loans, including the interest rate as well as the annual and lifetime loan limits, can be found at Loans: Federal Stafford Loan.
