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Direct Stafford Loans 101

Federal Direct Stafford Loans are federal education loans with competitive interest rates and flexible repayment terms. Borrowers should consider maximizing Direct Stafford Loan options before borrowing other loans with higher interest rates and/or possibly more stringent terms and conditions than Stafford Loans.

What is a Direct Stafford Loan?

Direct Stafford Loans External Link are loans made available to student borrowers through the federal government. Students who are enrolled at least half-time may borrow a Stafford Loan to pay for their education expenses. Before a student can borrow a loan, the student must apply for financial aid and be eligible for the loan.

How Is Eligibility Determined?

In order to apply for a Direct Stafford Loan, you must first complete the Free Application for Federal Student Aid External Link (FAFSA).

The resulting Institutional Student Information Report (ISIR) is sent to your school and determines your eligibility. This sets the stage for how much you can borrow. Whether you apply electronically, or complete a hard copy loan application, the financial aid office must certify your eligibility for the loan before the application can be processed.

Direct Unsubsidized Stafford Loans

While there are two types of Stafford Loans – subsidized and unsubsidized – medical students and other graduate students, are eligible for unsubsidized loans. Unsubsidized Stafford Loans accrue interest from the date the loan is disbursed until the loan is paid in full.

Interest Rates

Interest rates are set by the federal government and the law currently dictates that loans disbursed after July 1, 2013 will have a variable/fixed interest rate. This means that interest rates on Stafford Loans will be adjusted annually on July 1st and then after the loan is disbursed, the rate will change to a fixed rate, which will remain fixed for the life of the loan. Therefore, depending on when the loan is disbursed, borrowers may have multiple Stafford Loans with different interest rates. To view current and historical Stafford Loan interest rates, visit the Federal Student Aid External Link website.

How Much Can I Borrow?

Students can borrow only what’s needed to meet their personal budget, or cost of attendance, as determined by their school. Typically, the cost of attendance includes tuition, fees, books/supplies, and an allowance for room and board.

What if a Stafford Loan Doesn’t Cover All Your Expenses?

If you need additional aid, contact your financial aid office to learn about other federal loan options or institutional aid that may be available. The financial aid administrator at your school should be your first resource when you have questions about student loans or other financial aid concerns.

Additional Resources 

Fact Sheets:

The Financial Aid Application Process  

What is an Award Letter? 

Direct PLUS Loans for Graduate/Professional Students 

Debt Management Relies on Good Record Keeping 


Medloans® Organizer and Calculator 

Financial Aid Toolkit External Link

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Medloans® Organizer and Calculator

Medloans Organizer and Calculator

Organize and track your loans, then view sample repayment scenarios with the Medloans® Organizer & Calculator, the only Web tool of its kind developed for medical students.