Direct Stafford Loans
Direct Stafford Loans, from the William D. Ford Federal Direct Loan
(Direct Loan) Program, are low-interest loans for eligible students to
help cover the cost of higher education at a four-year college or
university, community college, or trade, career, or technical school.
Eligible students borrow directly from the U.S. Department of Education
(the Department) at participating schools.
Direct Stafford Loans include the following types of loans:
- Direct Subsidized Loans—Direct Subsidized Loans are for
students with financial need. Your school will review the results of
your Free Application for Federal Student Aid (FAFSASM)
and determine the amount you can borrow. You are not charged interest
while you’re in school at least half-time and during grace periods and
- Direct Unsubsidized Loans—You are not required to demonstrate
financial need to receive a Direct Unsubsidized Loan. Like subsidized
loans, your school will determine the amount you can borrow. Interest
accrues (accumulates) on an unsubsidized loan from the time it’s first
paid out. 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.