What Is A Federal Stafford Loan?

What is a Federal Stafford loan? The Federal Stafford Loan is provided by private lenders instead of the government. Private lenders, such as banks, credit unions and savings and loan associations, provide...

Private lenders, such as banks, credit unions and savings and loan associations, provide Federal Family Education Loan Program loans. These loans are guaranteed against default by the federal government. All Stafford Loans are either subsidized (the government pays the interest while you're in school) or unsubsidized (you pay all the interest, although you can have the payments deferred until after graduation). To receive a subsidized Stafford Loan, you must be able to demonstrate financial need.


With the unsubsidized Stafford Loan, you can defer the payments until after graduation by capitalizing the interest. This adds the interest payments to the loan balance, increasing the size and cost of the loan. All students, regardless of need, are eligible for the unsubsidized Stafford Loan.


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