Stafford Loan Frequently Asked Questions

Stafford Loan Benefits
  • Fixed interest rate - as low as 3.86%
  • No payments while in school at least half-time

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Top Questions

What is a Stafford Loan?

Federal Direct Stafford Loans are a federally-funded student loans for higher education. As part of the Direct Loan Program, Stafford Loans are provided to students through the Department of Education, and are available at Title-IV-eligible schools.

What are the maximum Stafford Loan amounts?

Stafford loan limits vary by type — subsidized or unsubsidized — as well as by grade level and dependency status. For more information, see the Stafford Loan limits chart.

What are the Stafford Loan eligibility criteria?

To be eligible for a Stafford Loan, students must:

  • Submit the Free Application for Federal Student Aid (FAFSA)
  • Have financial need as determined by the school (Subsidized Stafford Loans only)
  • Be a U.S. citizen or national, a U.S. permanent resident, or eligible non-citizen
  • Be enrolled or plan to enroll at least half-time (students do not have to be attending full-time to be eligbile)
  • Be accepted for enrollment or attend a Title-IV-eligible school
  • Not be in default on any education loan or owe a refund on an education grant

In some cases, students may be eligible to receive Unsubsidized Stafford Loans only. For more on this, contact your school's financial aid office.

What's the difference between unsubsidized and subsidized loans?

  • Subsidized Stafford loans are awarded based on financial need. Students will not be charged interest before beginning repayment or during periods of deferment. The federal government "subsidizes" (or pays) the interest during these times.
  • Unsubsidized Stafford loans are not awarded based on financial need. Any eligible student can take out Unsubsidized Stafford Loans. Interest accrues from the time the loan is disbursed, to the time the loan is repaid in full.

What can Stafford Loans be used for?

Stafford Loans can be used to cover a student's total Cost of Attendance (COA). COA typically includes tuition, room and board, books and other education-related expenses required by the university. Both on and off-campus housing can be covered by Stafford Loans.

Are there Stafford Loan application deadlines?

The application for all federal student aid, including Stafford Loans, is the FAFSA. FAFSA deadlines differ by both state and school, though application season typically runs from January 1 through June each year. There is no specific deadline to request Stafford Loans once your application is submitted.

Find your school or state FAFSA deadlines.

When are Stafford Loan funds disbursed?

Stafford Loan funds are disbursed directly to a school in two installments – usually in the fall and winter semesters. This loan money will be used to pay tuition and fees first, and if there are any leftover funds, the school will issue a refund to the student either through the student's account or via check.

What are the Stafford Loan interest rates?

The undergraduate interest rates for the current academic year are 3.86% for subsidized and unsubsidized loans. For graduate and professional students the unsubsidized rate is 5.41%. (Graduate and professional students are no longer eligible for subsidized Federal Stafford loans.) Please see this chart with Stafford Loan interest rates for more detail.

How do I apply for a Stafford Loan?

You first must complete the FAFSA or Renewal FAFSA (for returning students). After the FAFSA is processed, your school will review the results and inform you of your loan eligibility by sending you an award letter. Once your award letter is received, you should apply for the Stafford Loan, as well as look at other federal student loans or private student loans.

What is the difference between a dependent and independent student?

While filling out the FAFSA application, you may notice that one of the questions pertains to your dependency status, specifically asking whether you are a dependent or independent student. Independent students are not required to provide their parents' financial information, which can enable them to qualify for more federal aid. To learn more, take our quiz to see if you are still considered a dependent student.

Do I have to apply for a Stafford Loan every academic year?

This is a very common question. You have to apply every year because each year, the amount of aid you are eligible for is determined by your FAFSA. Federal Stafford loans do not "renew" automatically.

Can I receive a Stafford Loan if I have poor credit?

The Stafford Loan is not a credit-based loan - it is a need-based loan and your eligibility for it is governed by your FAFSA submission, not your credit report.

Note: If you are currently delinquent or have previously defaulted on any federal student loans, including Stafford Subsidized, Unsubsidized, Perkins or Parent PLUS Loans, you may not be eligible to receive any form of federal financial aid. Contact the U.S. Department of Education for more information on rehabilitating your delinquent or defaulted education loans.

Are there any fees for Stafford Loans?

Stafford loans currently have up to a 1.0% origination fee for each loan disbursement.

Can I cancel a Stafford Loan?

Yes. Your school must notify you in writing whenever your account is credited with your loan proceeds. This notification must be sent to you no earlier than 30 days before and no later than 30 days after the school credits your account. You may cancel all or a portion of your loan if you inform your school within 14 days after the date that your school sends you this notice or by the first day of the payment period, whichever is later.

To initiate this request you typically have to fill out a loan cancellation form with your school. To ensure the loan is cancelled you should follow up with the lender you applied with to make sure your school returned the funds.

Stafford Loan Frequently Asked Questions