Graduate Stafford Student Loans

The federal loan for graduate students, or Graduate Stafford Loan, has two variations:

If the Stafford Loan is administered by the Federal Family Education Loan Program (FFELP), this means that the funds are provided by private lenders, such as banks, credit unions, and savings & loan associations. These loans are guaranteed against default by the federal government. If your school is a "Direct Lending School", your Stafford Loan is administered by the Federal Direct Student Loan Program (FDSLP). Funds for "direct loans" are provided by the US government directly to students through their schools.

All Stafford Loans are either subsidized (the government pays the interest while you're in school) or unsubsidized (you pay all the interest, although you can have the payments deferred until after graduation). To receive a subsidized Stafford Loan, you must be able to demonstrate financial need.

With the unsubsidized Stafford loan, you can defer the payments until after graduation by capitalizing the interest. This adds the interest payments to the loan balance, increasing the size and cost of the loan.

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All graduate students, regardless of need, are eligible to apply for the unsubsidized Stafford Loan.

Stafford loans for graduate students have higher loan limits than Stafford loans for undergraduate students. Many students combine subsidized loans with unsubsidized loans to borrow the maximum amount permitted each year.

Stafford Loans disbursed after July 1, 2006 have fixed interest rates (based on 91-day T-bill rate + 1.7% during school with an additional .6% increase upon graduation) capped at 8.25% or less, depending on yearly adjustments. All lenders offer the same rate for the Stafford Loan, although some give discounts for on-time and electronic payment of the loan after graduation.

If your borrowing needs are not met by the federal programs, or federal funds are not sufficient, lenders offer a variety of supplemental borrowing programs known as Private or Alternative Loans.

To apply for a Stafford Loan, you must submit the Free Application for Federal Student Aid (FAFSA Online). You can receive a subsidized loan and an unsubsidized loan for the same period.