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Federal Benefit Program: Stafford Student Loans



Stafford Loans are available for undergraduate and graduate students and come from one of two sources:

1. Direct Stafford Loans:

Direct Stafford Loans are made by the U.S. Department of Education. Federal Direct Stafford Loan are repaid to the U.S. Department of Education.

2. Federal Stafford Loans:

Federal Stafford Loans are made through Federal Family Education Loan (FFEL) Program. While FFEL funds come from private lenders, such as banks and credit unions, they are subsidized and supported by the U.S. Department of Education. FFEL Stafford Loan are repaid to the private lender that made the loan or to its designated agency.

The Two Types of Stafford Loans:

For both the Direct and FFEL programs there are two types of Stafford Loans:

1. Subsidized Stafford Loans:

Subsidized loans are awarded based on financial need, as determined by information supplied on the Free Application for Federal Student Aid (FAFSA). Those eligible for a subsidized Stafford loan will not be charged interest while enrolled in school at least half-time, during a grace period of up to six months after you are no longer enrolled on at least a half-time basis, or during certain defined deferment periods. The Federal government pays the interest during these periods.

2. Unsubsidized Stafford Loans:

Unsubsidized loans are awarded on the basis of need. But the FAFSA must be completed. Interest is charged from the time the loan is disbursed until it is paid off in full. Payments of interest can be deferred while enrolled in school or during grace periods. However, deferred interest will be capitalized and added to the principal amount of the loan, and additional interest will be based on that higher amount.

Eligibility Criteria:

To qualify for this program, you must be enrolled in a postsecondary educational program leading to a postsecondary degree or certificate. There are other requirements. For more information, read The Student Guide online (.pdf).

Responsible Federal Agency:

Program Contacts and Information:

For general information about the Federal student aid programs, assistance in completing the FAFSA, and information about FAFSA on the Web, call the Federal Student Aid Information Center (FSAIC) at: 800-433-3243

People who are hearing impaired may call this toll-free number: 800-325-0778

TTY users for the hearing impaired can call: 800-730-8913

Callers in locations without access to 800 numbers may call the following non-toll free number: 319-337-5665

Web Resources:

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