A Federal Stafford Loan is a low-interest federal loan funded by various lenders and/or guarantee agencies. The interest rate usually changes yearly. The interest rate for 2008-09 is fixed at 6% for subsidized loans. The interest rate for unsubsidized loans is 6.8%. Repayment on the loan begins 6 months after the student separates from school or drop below half-time, (6 credits) whether or not the program of study has been completed. Depending on dependency status and need, the interest that accrues on the loan during the in-school period, grace periods and periods of deferment can be either subsidized or unsubsidized. If students have demonstrated need after grant eligibility has been determined, the federal government will pay, or "subsidize" the interest on the loan, up to the grade-level maximum. Students who do not have sufficient need for a subsidized loan may still borrow the funds, but will have to pay the interest on the loan for the in-school period or capitalize the interest; this is an unsubsidized loan. Note that if students choose to capitalize, the interest that accrues during the in-school and grace periods will be added to the principal balance of the loan. Interest then accrues on that new amount. Students must be enrolled in a degree program and, at least a half-time (6 credits) basis per semester in order to be eligible to borrow Stafford loan funds.

How much can I borrow?

How do I receive the funds?

Where do the funds come from?

How much is borrowing going to cost me?