Stafford Loan

Stafford loan is a fixed rate federal loan offered by college and universities these loans are available for undergraduate, graduate, and professional students.

Updated by Deepthi Raj on 25th September 2018

What is Stafford Loan?

Federal Stafford Loans are also termed as Direct Loans, which is presented through William D. Ford Federal Direct Loan Program.

A Stafford loan is a fixed rate federal loan offered by colleges and universities that are available for undergraduate, graduate, and professional students.

Students approved with Stafford Loans can obtain a valid amount of money irrespective of their financial requirement, for both undergraduate and graduate school programs

The interest rate and repay for Stafford Loans can differ depending on the type of loans i.e. subsidized or unsubsidized. 

Stafford loan is projected to enhance present individual and family incomes existing for higher education costs, which includes scholarships, grants, and work-study.

Stafford loans can be used for educational expenses such as costs of education, including tuition, room and board, books, and other education-related expenses.

What are the types of Stafford loan?

There are two types of Stafford loan

  • Subsidized loan -  Subsidized Stafford or direct subsidized loans are offered to undergraduate students those who exhibit financial requirements. A loan for which the government wages the interest while the student is in school and deferment duration. Students need to pay interest that grows during the grace period of 6 months. Graduate students are not eligible to obtain subsidized loans.

  • Unsubsidized loan - Unsubsidized loan or direct unsubsidized loan is offered to undergraduate and graduate students irrespective of financial need. The interest is accrued and summed up to the loan balance despite the fact the student is still in school. Students can obtain both subsidized and unsubsidized loans as long as they don’t exceed yearly Stafford Loan borrowing parameters.

Do I qualify for the Stafford loan?

In order to apply for Stafford, loan you must complete a FAFSA. You will be notified if you are authorized for need-based subsidized Stafford Loan assets. You can also apply for unsubsidized Stafford Loan funds over subsidized funds for which you have already been approved.

How much do I get for Stafford loan?

Stafford Loan bounds are constructed on two factors i.e. if you are termed as a dependent of your parents and time duration in school. Stafford Loan Maximum Amounts are as below           

  • Freshman - $5,500 dependent, $9,500 independent

  • Sophomore - $6,500 dependent, $10,500 independent

  • Junior or Later - $7,500 dependent, $12,500 independent

  • Graduate or Professional Degree - $20,500 per year for either type of student

How do I apply for Stafford loan?

Step 1Complete the Free Application for Federal Student Aid (FAFSA)

Step 2 – Review Student Aid Report (SAR)

Step 3 – Compare the Financial Aid Packages

Step 4 – Maximize grants and scholarship before applying for the student loan

Step 5 – Compare federal and private student loan

What are the requirements needed for Stafford loan?

  • A student must be Registered at least half-time at a qualified school and sustain satisfactory academic growth

  • A student needs to be U.S. citizen or a permanent resident of the U.S. or an eligible territory

  • Not presently in default. A student must not be indebted in any sort of refund on any Title IV loan or grant

  • If a student is male under age 25 then he must be registered with selective service.

  • A student needs to complete and submit the FAFSA before the yearly deadline

When can student debt be discharged?

In order to discharge a federal education loan, there must be conditions beyond the borrower’s control that forbid refund. Loans can be cleared in the following situations

  • Permanent disability of the borrower

  • Shutting of the school during the time of study

  • Falsification of the loan qualifications by the school

  • Use of identity theft to secure the loan

  • Failure of the school to refund required loans to the lender

  • Death of the borrower


Stafford loan is a federal loan provided to undergraduate and graduate students by demonstrating their financial requirements. These loans must be repaid and the interest rate is dependent on the type of loan chosen.


  1) What is the max for subsidized Stafford loans?

1) The max for subsidized Stafford loans are as follows:

  • Freshman - $5,500 dependent, $9,500 independent

  • Sophomore - $6,500 dependent, $10,500 independent

  • Junior or Later - $7,500 dependent, $12,500 independent

  • Graduate or Professional Degree - $20,500 per year for either type of student.

  2) What does Direct Stafford Loans mean?

Direct Stafford Loans are the student loans that must be repaid and these loans are available to both graduates and undergraduates. They are just like unsubsidized loans that have to be repaid back.

  3) What is the interest rate of Stafford loan?

 For 2018-19 the Stafford loans Interest Rates are as follows.

Federal Direct Subsidized Stafford Loan for undergraduate students


Federal Direct Unsubsidized Stafford Loan for undergraduate students


Federal Direct Unsubsidized Stafford Loan for graduate students   


  4) What is the average monthly payment for student loans?

An average student leaves the college with a debt of about $ 25,000, this would result that the monthly payment would be about $280; assuming 6.8% interest for 10-year repayment window.

  5) What is the federal direct subsidized loan?

It is a federal student loan borrowed through the Direct Loan program, that offers the undergraduate students a low, fixed interest rate, and a flexible repayment terms.

  6) How does a student loan work?

It is the sum of money that you borrow for your education expenses and later on, you pay it back over the course of time with interest. Loans will often be a part of your financial aid offer from the school.