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What is a Stafford loan?

Stafford loans are a type of federal student loan that are either subsidized, meaning the government pays the interest while you're in school, or unsubsidized, meaning you pay all the interest.

Stafford loans are a type of loan issued under the Federal Family Education Loan Program (FFELP). The FFEL Program ended in July 2010, which stopped the issuing of new Subsidized Federal Stafford Loans and Unsubsidized Federal Stafford Loans. All federal loans are now made through the Federal Direct Loan Program.

Today people may still misuse the term Stafford Loan when discussing Federal Direct Loans. This is not the correct name since Stafford Loans ended in 2010. A Stafford Loan and a Federal Direct Loan are not the same. If you are currently applying for a new loan and your school uses the term Stafford Loan, they are talking about a Federal Direct Loan. However, if you attended school before July 2010, you may have a Stafford Loan and are still required to pay those loans.

Stafford loan repayment

Repayment on all Stafford loans typically begins six months after you graduate, withdraw, or drop below half-time enrollment. Borrowers of Stafford Loans under the FFEL Program qualify for three repayment options:

If you have trouble making your payment or if you want to have lower monthly payments over a longer period, you can look into a Direct Consolidation Loan to become eligible for alternative repayment plans, including PSLF. Eligibility for Public Service Loan Forgiveness is depended on whether you have a FFELP loan or a Direct Loan, as FFELP loans (like the Stafford Loan) do not qualify,