Direct Stafford Loans

Federal Stafford loans are the most commonly borrowed student loans. Loans are a form of financial aid that must be repaid, with interest. Federal Stafford loans are long-term loans with no payment required while the student is in school or during their six-month grace period.

Types of Stafford Loans

Subsidized Stafford Loan-

• Are loans based on need as established by the school's cost of attendance. The U.S. Department of Education pays the interest while you are in school at least half time, for the first six months (grace period) after you leave school, and during a period of deferment (meaning a postponement of loan payments). The amount of your subsidized loan cannot exceed your financial need.

Unsubsidized Stafford Loan-

• Are loans that are non-need based and can assist students in meeting educational costs. The student is responsible for the interest payments from the time the loan is disbursed until it is paid in full. You have the option to pay the interest as you continue to attend school or let the interest accumulate and let it be added to the principal amount of your loan. This means that the interest will be “capitalized” and the total amount you repay will be higher than if you paid the interest all along.

Interest Rates

For the 2011-2012 academic year, the undergraduate subsidized interest rate is 3.4%. The subsidized graduate level Stafford loan and all unsubsidized Stafford loans interest rates will remain at 6.8%

For Stafford Loans first disbursed between July 1, 1998 and June 30, 2006, the interest rate is variable (adjusted annually on July 1st) but will not exceed 8.25 percent. (You'll be notified any time the variable rate changes.)

Accepting a Stafford Loan

Students can accept the Stafford loan(s) on ASAP.  First-time borrowers must complete a Stafford Loan Entrance Counseling session and a Stafford Loan electronic Master Promissory Note (eMPN) online at http://www.studentloans.gov. 
Important:  You will need your Department of Education issued FAFSA PIN # in order to complete and electronically sign your eMPN under the Direct Loan Program.  If you have forgotten your PIN please go to www.pin.ed.gov to have your PIN sent to you.