Stafford Loans

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For college students, financing their education is often a big obstacle. However, there are many alternatives available which will help almost any student, regardless of their high school academic achievement, pursue further education. One of those options are Stafford loans.

The Basics of Stafford Loans

Stafford loans are part of a government loan program which makes it easy for college students to finance their education. These loans are available to all students who are attending a government-recognized college or university, regardless of the student’s credit history, financial situation, or academic performance.

Stafford loans are distributed through two programs. Which program students use depends on their school. The first program is the Federal Family Education Loan Program (FFELP) and the second is Federal Direct Student Loan Program (FDSLP). The difference is that FFELP loans go through a financial institution while FDSLP loans come directly from the government. Both programs have the same rules, interest rates, etc.

Two Types of Stafford Loans

Stafford loans come in two types. The first is subsidized loans. With these loans, the interest that accumulates while the student is in school is covered by the government. Subsidized Stafford loans are only available to students who have financial need.

With unsubsidized loans, the student is responsible for the interest that continues to build while he or she is in college. However, the student does not have to pay that interest. Instead, it can be added on to the loan’s principle amount until the student has graduated. Unsubsidized Stafford loans are available to all students.

Stafford Loans: Amounts & Repayment

Students cannot borrow an unlimited amount of money through Stafford loans. Yearly and lifetime limits are in place to prevent students from overborrowing. First-year independent students, for example, can borrow up to $6,625 while third and fourth year independent students can borrow as much as $10,500 per year. Dependent student limits are lower.

No matter how much money in Stafford loans the student borrows, the loans must be paid back in full. Repayment usually begins six months after the student graduates or drops below part-time status.

References and Links

Students can learn more about Stafford Loans by visiting The Student Guide web site or reading “Financial Aid“.

Information about other forms of financial aid is available by reading “PLUS loans” and “Private Student Loans.”