Stafford Loans
What Is a Stafford Loan?
Stafford Loan was a type of federal student loan offered to undergraduate and graduate students to help pay for higher education.
Stafford Loans were available in two main forms:
- Subsidized Stafford Loans
- Unsubsidized Stafford Loans
Subsidized loans did not accrue interest while the student was enrolled in school, while unsubsidized loans accrued interest during that time.
Program Status
The term Stafford Loan is no longer used for new federal student loans.
Today, these loans are issued as:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
Both are part of the William D. Ford Federal Direct Loan Program.
Borrowers may still see the term “Stafford Loan” on older loan records or credit reports.
Why It Matters
Stafford Loans were historically the most common federal student loans.
They helped millions of students pay for college with relatively favorable borrowing terms.
Key features included:
- Fixed interest rates
- Flexible repayment plans
- Federal borrower protections
Understanding Stafford Loans remains important for borrowers with older student loans.
How Stafford Loan Works
Stafford Loan was awarded through a student’s financial aid package after completing FAFSA.
Example: A student might have received a subsidized Stafford Loan that did not accrue interest while enrolled in school.
Loan funds were disbursed to the school and applied toward tuition and educational expenses.
Repayment typically began after a grace period following graduation.
Stafford Loan vs Direct Loan
Stafford Loan → Older term for federal student loans
Direct Loan → Current federal student loan program
Direct Subsidized and Unsubsidized Loans replaced Stafford Loans.
Related Terms
