"The first step in the process is to complete the ... Free Application for Federal Student Aid (FAFSA) or Renewal FAFSA.  After your FAFSA is processed, your school will review the results and will inform you about your loan eligibility. You must also complete the Federal Stafford Loan Application and Promissory Note available from your school, a lender, or your state guaranty agency."

There are two versions --

Subsidized:

Interest on the loan is paid by the federal government while the student is in school and for 6 months thereafter.  This type is made in the student's name only and can be used only for expenses related to higher education (tuition, fees, books, room & board). The amount of money awarded is based upon the Applicant's demonstrated need.

Unsubsidized:

The borrower is responsible for paying the interest throughout the life of the loan (or it may be capitalized ).  Applicants are not required to demonstrate financial need; however, the necessary forms must be completed and the funds can be used only for expenses related to the costs of higher education. (In certain circumstances, independent undergraduate and graduate students can exceed the maximums indicated below for Unsubsidized loans.)

Eligibility

Student must:

• Be enrolled in an eligible school on at least a half-time basis.

• Pursue a degree or certificate program.

• Maintain satisfactory academic progress, as determined by the school.

• Complete a needs analysis.

Borrowing Limits

Subsidized & Unsubsidized Yearly Maximums:

• Undergraduate, 1st Year: $2,625

• Undergraduate, 2nd Year: $3,500

• Undergraduate, 3rd, 4th, 5th Years: $5,500

• Graduate & Professional: $8,500

Subsidized & Unsubsidized Lifetime Maximums:

• Undergraduate: $23,000

• Graduate: $42,500

• Combined Undergraduate & graduate: $65,500

Additional Unsubsidized Yearly Maximums:

• Undergraduate, 1st Year, 2nd Year: $4,000

• Undergraduate, 3rd, 4th, 5th Years: $5,000

• Graduate & Professional: $10,000

Additional Un-Subsidized Lifetime Maximums:

• Undergraduate: $23,000

• Graduate: $50,000

• Combined Undergraduate & graduate: $73,000

Interest Rate

Set annually by federal government on the 1st of July: variable rate Historical Low Rates

Fees

Loan Origination: 3%
Loan Insurance: 1% (Most states waive this fee today.)

(There are "late fees" if you miss a payment.)

Repayment Period

Once you graduate, withdraw or leave school, you will be granted a six month grace * period.  This time allows you to adjust to your life changes and also gives you time to prepare for the repayment of your loan debt.  During your grace period, your lender will provide you with a repayment disclosure statement containing your repayment terms, including the amount of your monthly payment and the due date of your first payment.  Repayment of the Federal Stafford loan begins at the end of this six month grace period and usually extends up to ten years.  Generally, the minimum monthly payment is $50.00; however, you should talk to your lender to determine other flexible repayment terms that might be available.