Stafford Loan FAQs

FAQs

 

What’s a Stafford loan?

A Stafford loan is a low-interest, federally guaranteed student loan available to both eligible undergraduate and graduate students for tuition and other school-related expenses. Given to students in their own name,Stafford loans can be either need-based or non-need-based, offering a wide range of students a self-help financing option that’s available to them regardless of their own income or their parents’ income.

 

What’s the difference between a subsidized and an unsubsidized Stafford loan?

Subsidized Stafford loans are awarded on the basis of financial need. With a subsidized Stafford loan, any interest that accrues while you’re in school, in deferment or in your grace period is paid by the government. If you’re in forbearance, you’ll be responsible for paying any interest that accrues.

Unsubsidized Stafford loans are non-need-based, so if you’re an eligible undergraduate or graduate student, you can qualify for unsubsidized Stafford aid regardless of your own income or your parents’ income. With an unsubsidized student loan, even when you’re not making payments (while you’re in school, in deferment, in forbearance or in a grace period), interest is accruing, and you’ll be responsible for paying that interest.

 

Am I eligible for a Stafford loan?

Any undergraduate or graduate students enrolled at least half time can apply for a Federal Stafford Loan, as long as they meet the eligibility requirements.

 

How do I apply for a Stafford loan?

Just click here. Applying online is fast, easy and secure. And there’s no credit check or application fees.

For more details, visit our page on Applying for a Stafford loan.

 

How much can I borrow with a Stafford loan?

Eligible undergraduates qualify for different Stafford loan amounts, depending on your year in school and whether you’re classified as adependent or independent undergraduate student. For details, visit our page on Stafford loan amounts.

Eligible graduate students can borrow up to $20,500 a year, up to a maximum of $138,500 in cumulative Stafford loan debt, which includes any undergraduate Stafford student loans you may have received. For more details, visit our page on Stafford loan amounts.

 

My credit isn’t the greatest. Will this affect my ability to obtain a Stafford loan?

Nope! There’s no credit check when you apply for your Stafford student loan. Stafford loans aren’t credit-based student loans, so you don’t have to worry about income, credit problems or finding a co-signer.

 

I have a student loan in default. Can I still obtain a Stafford loan?

Unfortunately, if you have a federal student loan that’s currently in default (not including previously defaulted student loans that you’ve since rehabilitated), you won’t be able to obtain a Stafford loan. But if you’ve rehabilitated your defaulted student loans or made satisfactory repayment arrangements on them, you may still be able to qualify for a Stafford student loan.

 

Can I consolidate my Stafford loans through NextStudent?

Yes! As long as you have at least $20,000 in federal college loans and meet the consolidation eligibility requirements, you can consolidate with NextStudent and take advantage of all the benefits of a student loan consolidation.

Get started now!

 

How much does a Stafford loan cost?

There’s no fee to apply for a Federal Stafford Loan.

Once awarded, every Stafford student loan is subject to a 3% government origination fee (charged by the U.S. Department of Education) and a 1% guarantee fee (charged by the guarantor). These fees are taken out of the proceeds of the loan.

 

What if I have trouble making my payments?

Once you’ve entered your repayment period on your Stafford loan, you can choose from different repayment options, such as income-sensitive and extended payment plans, which can help make repayment more affordable. For more details, see our answer to “What are my repayment options?” on this page.

If you’re unemployed or experiencing financial difficulties, you may qualify for deferment or forbearance benefits. With the deferment and forbearance benefits that come with your Stafford student loan, you may be allowed to temporarily postpone making payments without affecting your credit rating.

 

If I’m temporarily not making any student loan payments because I’m in school, in my grace period, in deferment or in forbearance, am I still being charged interest?

That depends on the type of Stafford student loan you have and on the type of postponement you’re taking.

While you’re in school, in deferment or in your grace period, you won’t be charged any interest on your subsidized Stafford loans. However, interest will accrue on your unsubsidized Stafford loans, and you’ll be responsible for paying that interest.

When you’re in forbearance, you’ll be responsible for all interest that accrues on both subsidized and unsubsidized Stafford loans.

Any unpaid interest that accrues during a postponement period will be added to the principal of your Stafford loan for you to repay once your repayment starts or resumes. If you want to avoid having any accrued interest added to your principal Stafford loan balance, you can choose to make interest-only payments during any of these postponement periods.

 

What happens if I decide to pay my Stafford loan off early?

Then you’ve paid off your student loan early! There are no prepayment penalties on Federal Stafford Loans, so you’ll never be charged extra fees for making more than the minimum payment or paying your student loan off before it’s due.

 

How will my Stafford interest rate be calculated?

All Federal Stafford Loans disbursed on or after July 1, 2006, have a fixedstarting interest rate of 6.8%.

Federal Stafford Loans disbursed prior to July 1, 2006, have a variable interest rate. The variable rate on these Stafford loans adjusts on July 1 of each year, with a maximum allowable rate of 8.25%. The rate on these variable-rate Stafford loans is reduced by 0.6% while you’re in school, in deferment or in a grace period.

 

How long do I have to repay my Stafford loan, and what are my repayment options?

The standard repayment term for a Federal Stafford Loan is 10 years.

You won’t have to start repaying your Stafford student loan until you’ve left school or dropped below half-time enrollment. And once you do leave school or drop below half-time, you have a six-month grace period before you have to start making any payments on your Stafford loan.

Once your repayment period starts, you can also choose an alternate payment plan that could help make repayment more affordable:

  • Extended Repayment: This repayment plan allows you to extend your repayment period up to a 25-year term, depending on your student loan amount. This option is available to you if your college loans total more than $30,000 and if you received your first college loan on or after October 7, 1998.
  • Graduated Repayment: With this payment plan, your monthly payments start out lower and gradually increase over time.
  • Income-Sensitive Repayment: With this payment plan, your monthly payments are based on your income. You’ll have to submit income documentation to qualify, and you have to requalify each year.

You can also consolidate your Stafford loans once you’ve left school. Consolidating can give you up to 30 years to repay, depending on the total amount of your student loan debt . Click here for details.

Want more info?

 

Want more info?
What’s a Stafford loan?
Who qualifies?
How do I apply?
How much can I borrow?
How much do Stafford loans cost?
What’s my interest rate?
What are my repayment options?