What is a Federal Direct Stafford Loan?

Posted: June 12, 2016 | Author: Southern Utah University | Read Time: 1 minutes

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A Direct Stafford Loan is a student loan that must be repaid. These loans are available to both undergraduate and graduate students and there are two types: subsidized and unsubsidized. First-year students are eligible for loans up to $5,500, and amounts increase with subsequent years of study. 

What is a Direct Subsidized Loan?

Direct Subsidized Loans are need-based loan available to undergraduate students. The federal government pays the interest on subsidized loans during the borrowers in school, grace, and deferment periods. It must be repaid beginning six months after you graduate or drop below six credits.

What is a Direct Unsubsidized Loan?

Direct Unsubsidized Loan is a loan available to undergraduate and graduate students. There is no financial need requirement. Interest on the loan begins accruing right when you receive it.

You will receive a quarterly statement from your lender indicating how much interest has accrued on your unsubsidized loan. The current interest rate is fixed at 4.29% for undergraduate students (both subsidized and unsubsidized) and 5.84% for graduate unsubsidized loans. You are not required to pay the interest while you are in school, but if you don’t, it will be capitalized onto the principle balance of your loan.

For more information about loans, contact SUU Financial Aid.

This article was published more than 5 years ago and might contain outdated information or broken links. As a result, its accuracy cannot be guaranteed.

Tags: Financial Aid

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