Federal Stafford Loan - What is a Federal Stafford Loan?
From UConn OSFAS Loan Counseling
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Section 2: What is a Federal Stafford Loan?
The Stafford Loan is a federally regulated loan. There are two types of Stafford Loans. You may have been awarded one or both of these loan types.
Subsidized Stafford Loan
This loan is awarded based on financial need. The government pays the interest on this loan while you are in school, during your six month grace period, and during any subsequent periods of deferment. Once repayment begins, you will be responsible for paying interest that accrues.
Unsubsidized Stafford Loan
This loan is not based on financial need. Interest accrues on this loan type immediately after disbursement. Interest payments are not required while you are in-school or in your grace period, but you have the option of making payments at any time. Making payments on the interest while you are still in-school will prevent the interest from capitalizing (being added into your principal balance so you are paying interest on interest) after you graduate.
Important Information
Both of these loans allow you to defer the principal balance (and interest for Unsubsidized loans)while you are enrolled in school on at least a half-time basis. After you graduate, withdraw, or drop below a half-time status, your six month grace period will begin. No payments are due during the grace period.
If you return to school at least half-time during your grace period, your loans will re-enter the original in-school status and you will still have a grace period the next time you leave school. If you return to school at least half-time after your grace period has finished, your loans will be deferred but you will not have a new grace period the next time you leave school.
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