Frequently Asked Questions

What is a Stafford loan?
A Stafford loan is a government guaranteed loan offering low interest rates and deferred payment options. There are two types of Stafford loans - subsidized and unsubsidized.

What is the difference between a subsidized Stafford loan and an unsubsidized Stafford loan?
With a subsidized Stafford loan, the government pays interest on the loan until you graduate from college. To qualify for a subsidized Stafford loan, you must demonstrate financial need. An unsubsidized Stafford loan still offers you the same low interest rate as the subsidized version, but you have to pay the interest on the loan from the date of origination.

Who is eligible for a Stafford loan?
  • U.S. citizen or eligible non-citizen
  • High school graduate or GED certification
  • Students in good standing with other loans
  • Students enrolled at least half time in an accredited degree program
How do I get a Stafford loan?
First, you must fill out the FAFSA (Free Application for Federal Student Aid) form at www.fafsa.ed.gov and receive your financial aid award package, which will outline what types of education funding you are eligible for, including Stafford loans. If you are eligible, you then can return to MyTuition.com to apply for your Stafford loan by filling out our quick and simple online application. Once your information is submitted and processed, an application will be mailed to you. Simply sign, date and return in the enclosed envelope and you're all done! There is no credit check necessary when applying for a Stafford loan.

How much can I borrow with a Stafford loan?
If you are an eligible dependent student, you can borrow up to:
  • $2,625 freshman year
  • $3,500 sophomore year (after one year of completed study)
  • $5,500 junior, senior, fifth year
  • $8,500 graduate/professional students
If you are an eligible independent student, you can borrow up to:
  • $6,625 freshman year (if you combine subsidized and unsubsidized loans, no more than $2,625 may be in subsidized loans)
  • $7,500 sophomore year (if you combine subsidized and unsubsidized loans, no more than $3,500 may be in subsidized loans)
  • $15,500 junior, senior, fifth year (if you combine subsidized and unsubsidized loans, no more than $5,500 may be in subsidized loans)
  • $18,500 graduate/professional students (if you combine subsidized and unsubsidized loans, no more than $8,500 may be in subsidized loans)
The total outstanding debt allowable under the Stafford loan program:
  • $23,000 dependent undergraduate student
  • $46,000 independent undergraduate student (only $23,000 may be in subsidized loans)
  • $138,500 graduate/professional student (only $65,500 may be in subsidized loans)
What is the interest rate on a Stafford loan?
Interest rates on Stafford loans disbursed on or after July 1st, 2006 are fixed at 6.8%, before interest rate reduction programs. With MyTuition.com borrower benefits, you may be eligible for an interest rate as low as 4.8%*.

Interest rates on Stafford loans disbursed prior to July 1st, 2006 are variable and adjusted every July 1st (based on the 91-day Treasury Bill + 1.7% while you're in school, grace or deferment and + 2.3% during repayment). Current interest rates for loans disbursed before July 1st, 2006 are 6.54% for in-school and 7.14% for repayment, before the application of interest rate reduction programs; these interest rates are capped at 8.25%.

Who offers Stafford loans?
Each college selects a federal loan program - either the Federal Family Education Loan Program (FFELP) or the Federal Direct Loan Program (FDLP). Both the FFELP and the FDLP offer Stafford loans. With FFELP, private lenders provide the loan funds. With FDLP, the government provides the loan funds.

What are the payment terms for a Stafford loan?
In addition to their low interest rates, one of the best things about both types of Stafford loans is that your loan payments may be deferred until six months after graduation. You typically have 10 years to pay off your Stafford loan and the opportunity to save additional money by consolidating your Stafford loans when you graduate. There are no prepayment penalties on a Stafford loan.

Is it ever possible to postpone repayment of a Stafford loan?
Yes. Under certain circumstances, students can receive deferment or forbearance benefits for their loan. If eligible, students may be able to postpone or reduce their monthly payments.

How are Stafford loans disbursed?
Typically, Stafford loan disbursements are sent directly to your school's financial aid office and distributed in scheduled payments during the academic term. Once the student's registration is confirmed, depending on the school, the funds will be deposited into the student's bank account or the student will be asked to pick up a check from the school's financial aid office.

Are there any charges for a Stafford loan?
There is a combined fee of up to 4% of the loan, comprised of a 3% origination fee that goes to the federal government and a 1% guarantee fee that goes toward the guaranty agency that insures your loans. These fees are deducted proportionately from each loan disbursement so that you aren't required to come up with any up-front money to obtain the loan.

What if I have other questions?
Please email us at stafford@mytuition.com or call --PHONE NUMBER-- to talk to a Loan Counselor trained in Stafford Loans.

Additional Information