Federal Direct Stafford Loans
Federal Direct Stafford Loans, from the William D. Ford Federal Direct Loan Program, are low-interest loans for eligible students to help cover the cost of higher education. These loans include:
- Federal Direct Subsidized Stafford Loans - for students with financial need. You are not charged interest while you're in school at least half-time, during grace periods, or deferment periods.
- Federal Direct Unsubsidized Stafford Loans - are NOT based on financial need. Interest is charged from the time the loan is disbursed until it is paid in full. You can pay the interest while you are in school and during grace periods and deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principal amount of your loan). If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount.
For Federal Direct Stafford Loans, there is a loan fee that is a percentage of the amount of each loan you receive. For loans first disbursed between July 1, 2011 and June 30, 2012, the loan fee is 1.0%, which be deducted proportionately from each loan disbursement. The specific loan fee that you are charged will be reflected on a disclosure statement sent by the Federal government.