Direct Stafford Loan (subsidized)

The subsidized Direct Stafford Loan is a  low-interest  loan made to students through the William D. Ford Federal Direct Loan Program. The interest rate on this Stafford Loan is variable*. The federal government pays the interest on this "need-based" loan while students are in school or in deferment and during the grace period (6 months after completion of training or withdrawal or termination).

Direct Stafford Loan (unsubsidized)

The unsubsidized Direct Stafford Loan is a low-interest  loan made to eligible students. The interest rate on this Stafford Loan is variable*. If a student does not quality for a subsidized Stafford Loan, he or she may be eligible for an unsubsidized loan. Should a student receive an unsubsidized loan, he or she will be responsible for the interest both during school and any deferment periods. After students graduate or leave school, they have six (6) months after completion of training or withdrawal or termination before they must begin repayment (principal and interest on the unsubsidized loan).

Direct PLUS Loan (unsubsidized)

Direct PLUS Loans are for parents who want to borrow to help pay for their children's education. The interest rate on these loans is variable*. Repayment must begin within sixty (60) days after the final loan disbursement. There is no "grace period" for these loans. Parents are responsible to pay interest during both schooling and the deferment periods.

*  The interest rate on the Stafford Loan (Subsidized and Unsubsidized) first disbursed on or after July 1, 2006 is a fixed rate of 6.8%.  The same rate applies to the in-school, grace or deferment and repayment or forbearance periods.  The interest rate on Plus Loans first disbursed after July 1, 2006 is a fixed rate of 7.9%.

The interest rates on existing variable rate Stafford and Plus loans will continue to change annually on July 1, based on the last 91-day T-bill auction in May.