A Guide to Stafford Loans

Stafford loans, repayments, need-based aid, dependent status… Do these make your head spin? College finances can be a sticky–and confusing–endeavor.

Fear not: We’ll take out the scary parts of the biggest federal loan available: subsidized and unsubsidized Stafford loans.

Traditionally, these are two most common forms of federal student loans made available to undergraduate students. Colleges determines the actual loan amount eligibility each academic year.

However, there are limits on the maximum amount in subsidized and unsubsidized loans per academic year.

Subsidized Stafford Loans

These student loans link directly to financial need.  They do not rack up interest while students are attending a college or university at least part-time.

This means you won’t sweat any interest collected on your loan while in school or in deferment periods.  The government picks up the tab.  Expect limit ranges of ~$3,500 to $5,500 a year, and yes, they’re federally guaranteed.

Unsubsidized Stafford Loans

As you can imagine, an unsubsidized loan is the direct opposite of a subsidized one.  These loans are not based on financial need alone and collect interest while you’re in school.  As with the subsidized loans, there are limits ranging from $2,000 to $7,500, depending on the academic year.

If you’re a dependent student whose parents are ineligible for a Direct PLUS Loan, you may be able to receive additional loan funds of an additional $4,000 to $5,000 per academic year.

In order to apply for any student loan, you must fill out a FAFSA every year that you are applying for federal financial aid.

This form can be found online and should be completed once per year.  It will be sent to all the schools of your choice simply by entering the school codes on the college selection section of the FAFSA form.

Whether you are headed to college in the fall for the first time or starting your senior year of high school, be sure to apply for federal financial aid early in January of each year. For more resources and help, be sure to contact your college or universities financial aid department or Westface College Planning.

Learn how Westface College Planning can help you navigate the college planning process from start to finish. Give us a call at (360) 818-7728 or use our contact form. Our workshops and webinars are also a great place to start.

_{Photo Credit: Omar Bárcena}