What is a federal Stafford Loan?
The Federal Stafford Loan Program consists of low-interest subsidized and unsubsidized loans financed by participating banks and other lending institutions. Loans are available to undergraduate, graduate, and professional students who are U.S. citizens or eligible non-citizens. The interest rate is fixed at 6.0% for Undergraduate Stafford loans borrowed on/after July 1, 2008 and 6.8% for Graduate Stafford and Unsubsidized Stafford. Loan repayment begins six months after graduation or dropping below half-time enrollment.
A Federal Stafford Loan is a long term, low-interest loan that assists students with college expenses. It is the most widely used loan in the student education program. Stafford Loans may be subsidized or unsubsidized. A subsidized loan means the Federal government is responsible for the interest while you are enrolled in school. An unsubsidized loan means you, rather than the Federal government, will be responsible for the interest while you are enrolled in school. To be considered for either type of Stafford Loan, you must first file the Free Application for Federal Student Aid (FAFSA). Stafford Loans can be FFELP (Federal Family Education Loan Program) or Direct. FFELP means borrowing from a private lender. Direct means borrowing from the Federal government. Methodist participates in the FFELP. Who is Eligible? You (the student) may apply for a Federal Stafford Loan if you are: • An undergraduate or graduate student. • A U.S. citizen, U.S. national, U.S. permanent resident or an eli
