How to Apply for a Stafford Loan

Two Parts:Applying for Stafford LoansUnderstanding and Accepting Your Stafford Loans

If you need to borrow money to pay for college, Stafford loans are likely your best option. These federal loans have relatively low interest rates, and because the government awards them based on need alone, you don’t need good credit to apply. The application process is fairly simple, but there are some important guidelines to consider.

Part 1
Applying for Stafford Loans

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    Confirm your eligibility. If you will be attending an accredited program at least half time, and you are a U.S. citizen, U.S. national, or U.S. permanent resident, you are probably eligible for Stafford loans.
    • If you do not meet the citizenship requirements, take the time to check with a representative at your school’s financial aid office anyway. Certain exceptions can sometimes apply. If, for example, you are a documented refugee or human trafficking victim, you may be able to get Stafford loans regardless of your citizenship status.[1]
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    Determine your status. Before you fill out your financial aid paperwork, you should figure out whether you qualify as an independent student or not. Generally speaking, if you are not married, have no children, and are under 24 years old, and you will be an undergraduate, you are considered dependent. This means that your financial aid package will be based on your parents’ tax information – whether they actually help you pay for school or not.[2] If you do not fall into this category, it is likely to your advantage to file your paperwork as an independent student, as you will probably qualify for more aid – including the maximum in Stafford loans.
    • Certain exceptions are made to allow some undergraduate students to claim independent status even if they are under 24 and have no dependents. If you are an orphan, foster child, or ward of the court, or if you are a veteran, talk to a financial aid representative about an exception.
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    Submit your FAFSA. The FAFSA (Free Application for Federal Student Aid) is available online at This form serves as your application for all forms of federal financial aid, including Stafford loans. Fill it out as accurately as possible, using your family’s tax information if you fall into the dependent category or your own tax information if you qualify as an independent student. It’s advisable to submit the FAFSA as early as possible, so if you want to do so before you have your official tax information completed, it’s fine to estimate.[3] You’ll need to provide:
    • Social security numbers
    • Information about dependents, including how many household members are in school
    • Annual income
    • Information about savings and other assets
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    Use your Student Aid Report to estimate your probable financial aid. If you completed your FAFSA online, you will receive a Student Aid Report within a few days (it may take up to a few weeks if you submitted your FAFSA on paper). This report will include your EFC (Expected Family Contribution). The EFC is calculated using the information you provided on your FAFSA. Basically, it is the amount that the government theoretically expects you and your family to contribute to your education. In general, you will be offered financial aid packages that cover the difference between your EFC and the actual annual cost of your education. A significant portion of this financial aid will come in the form of Stafford loans.[4]
    • Many students find that their families cannot actually afford to pay the EFC annually. If that’s the case for you, don’t despair. You can take steps to reduce the cost of your education and to make up some of the difference with scholarships, program-specific financial aid, and private loans.
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    Read your official financial aid offers. Schools that accept you will send you official offers of financial aid. These packages will include both federal financial aid and any institutional aid that the school is awarding you. Your Stafford loans will be included in these offers.
    • Note that Stafford loans are usually only one part of a larger financial aid package. You may also qualify for grants (which are wonderful, since they do not need to be paid back), work-study opportunities, and other federal loans (such as the Perkins loan).

Part 2
Understanding and Accepting Your Stafford Loans

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    Read the fine print. Resist the urge to simply accept all the aid you are offered without taking the time to understand all of the terms and conditions. Accepting financial aid will mean that you are likely to graduate with a considerable amount of debt, which you may or may not be in a position to pay back. It’s crucial to know exactly what you are getting into.
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    Distinguish between subsidized and unsubsidized Stafford loans. Most students will receive a combination of Stafford loans:
    • Subsidized Stafford loans are awarded based on financial need alone. They are “subsidized” in the sense that the government will pay all of the interest for you while you are in school, and then for six months after your graduation. In other words, the interest will begin to accumulate only after you finish school.[5]
    • Unsubsidized Stafford loans can be awarded through your school of choice regardless of your financial need. However, these loans are not as attractive as subsidized ones because the interest begins to accumulate immediately. If you don’t make payments during school, then by graduation, you will owe much more than you borrowed.[6]
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    Be aware of the limitations on Stafford loans. Stafford loans are not unlimited. There are both annual and cumulative caps on how much you can borrow through these programs, so it’s important to know the limitations and plan accordingly. Annual caps begin at $5,500 for dependent freshmen ($9,500 for independent freshmen) and go up to $7,500 for dependent seniors ($12,500 for independent seniors) and $20,500 for graduate and professional students ($40,500 for medical school students).[7] In addition:
    • Dependent undergraduates cannot borrow more than $31,000 total over the course of their programs.
    • Independent undergraduates cannot borrow more than $57,000 total over the course of their programs.
    • Graduate and professional school students cannot borrow more than $138,500 in total.
    • Medical school students cannot borrow more than $224,000 in total.
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    Consider the benefits of Stafford loans. Taking on student loan debt can be stressful and scary, but if you must borrow to pay for college, Stafford loans are the best available way for you to do so.[8] Keep in mind that:
    • Stafford loan rates tend to be lower than rates associated with other types of loans.
    • Stafford loans are eligible for all the repayment and forgiveness plans offered by the federal government, whereas private loans often are not.
    • Subsidized Stafford loans, especially, offer you the best possible deal on funding, since the government pays your interest while you are in school.
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    Submit a Master Promissory Note. If you've read the fine print and want to accept your loans, you’ll need to sign and submit a Master Promissory Note through your financial aid office. This document represents a promise to repay your loans after you graduate.
    • You only have to sign one Master Promissory Note, unless you transfer schools. If you want to attend a different program, you’ll have to resubmit the paperwork.


  • Consider making payments on unsubsidized Stafford loans while you are in school. If you can afford to do so, making payments on your unsubsidized loans will reduce your total debt upon graduation, lowering your future payments.
  • Speak to a financial aid representative at your school of choice if you have exceptional needs related to medical conditions or disabilities, or if you have small children who will need to attend day care. You may qualify for additional funding sources.

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Categories: Budgeting and Financial Aid for College