What is a Stafford Loan?
The term Stafford Loan refers to a subsidized or unsubsidized Federal Stafford Loan. This loan can help students with the cost of education at a four-year college or university, community college, or trade, career, or technical school. This loan is made to students from schools that participated in the Federal Family Education Loan (FFEL) Program.
Helpful Tip
Many schools use the term Stafford Loans or Direct Stafford Loans to refer to Direct Subsidized Loans and Direct Unsubsidized Loans. If a school says that it offers Stafford Loans or Direct Stafford Loans to its students, this means Direct Subsidized Loans and Direct Unsubsidized Loans.
What’s the difference between Subsidized and Unsubsidized Loans?
Direct Subsidized Loans:
- Available to undergraduate students.
- Awarded based on your financial need and determined by the information you submit on the Free Application for Federal Student Aid (FAFSA).
- Do not charge interest if you are in school at least half-time, during a grace period of up to the first six months after you leave school, or during a time of deferment or postponement of payment on a loan.
- The federal government pays or subsidizes the interest during these periods.
Direct Unsubsidized Loans:
- Available to undergraduate and graduate students.
- Not awarded based on your need, but you still must apply using the FAFSA.
- Charge you interest from the time the loan is available to use until it is paid off in full.
- You can choose to delay payment of interest while you are in school and during any grace or deferment period. If you allow interest to build up during this time, it will be capitalized. This means that interest will be added to the principal amount of your loan, and additional interest will be based on that higher amount.
How do I apply for a Direct Loan?
To apply for a Direct Loan, you must first complete and submit the Free Application for Federal Student Aid (FAFSA) form. Your school will use the information from your FAFSA form to determine how much student aid you are eligible to receive. Direct Loans are generally included as part of your financial aid package.
To learn more or get a list of frequently asked questions, including information on interest rates, loan repayment, and eligibility, visit the StudentAID.gov Subsidized and Unsubsidized Loans page.
For more information on loan programs, browse the Loans category of benefits or Loans category in our Newsroom on Benefits.gov. Also, be sure to take our Benefit Finder questionnaire to find other benefits you may be eligible to receive.