There are two types of Stafford loans: subsidized and unsubsidized.
- Subsidized Stafford Loan
As either a dependent or independent student, you may qualify for this need-based, low-interest loan. The government pays the interest on the Subsidized Stafford loan as long as the student is enrolled in school on at least a half-time basis. Repayment begins following a 6-month grace period after leaving school.
- Unsubsidized Stafford Loan
Unsubsidized Stafford loans are non-need-based loans that are made available to both dependent and independent students. Interest is accrued on these loans from the time they are disbursed. Unpaid interest will be capitalized at the start of repayment and at the end of a deferment. Repayment begins following a 6-month grace period after leaving school.
The PLUS Loan (formerly called the “Parent PLUS Loan”) is for credit-worthy parents of dependent students. It is the parent′s responsibility to repay the loan. Parents can borrow up to the cost of the education, minus any financial aid the student is eligible to receive. A PLUS Loan is a loan made to the parents and does require a credit check.
If you’re looking to apply for a Stafford or PLUS loan, please contact the Department of Education at 800.433.3243 or visit their Student Aid on the Web information center. You may want to contact your school Financial Aid Office for additional guidance.
Please note that with the passage of the Student Aid and Fiscal Responsibility Act, all new federal student loans and federal student loan consolidations are provided to borrowers directly by the U.S. Department of Education.