The Subsidized Stafford Loan is part of the FFEL and Direct Loan programs, which is administered by the Department of Education.  In order to be eligible for the subsidized Stafford loan, students must be in an undergraduate program at a qualified post-secondary institution.  Students must also show a financial-need, since the government will pay (subsidized) the interest that is accruing while in school, for the first six months after the student leaves school, and if the student qualifies to have the payments deferred.

Schools generally participate in either the FFEL or Direct Loan program but sometimes participate in both. Under the Direct Loan Program, the funds for your loan come directly from the federal government. Funds for your FFEL will come from a bank, credit union, or other lender that participates in the program. Eligibility rules and loan amounts are identical under both programs, but repayment plans may differ. 

Students must complete and submit a FAFSA application by the financial aid deadline. After the FAFSA is processed, your school will review the results and will inform you about your loan eligibility. You also will have to sign a promissory note, a binding legal document that lists the conditions under which you're borrowing and the terms under which you agree to repay your loan.

You can receive a subsidized loan for the same enrollment period as long as you don't exceed the annual loan limits.

If you're a dependent undergraduate student each year you can borrow up to:

·        No more than $3,500 of this amount can be in subsidized loans (for loans first disbursed on or after July 1, 2008) if you're a first-year student enrolled in a program of study that is at least a full academic year.

·        No more than $4,500 of this amount can be in subsidized loans (for loans first disbursed on or after July 1, 2008) if you've completed your first year of study and the remainder of your program is at least a full academic year.

·        No more than $5,500 of this amount can be in subsidized loans (for loans first disbursed on or after July 1, 2008) if you've completed two years of study and the remainder of your program is at least a full academic year.

If you're an independent undergraduate student each year you can borrow up to:

·        No more than $3,500 of this amount may be in subsidized loans (for loans first disbursed on or after July 1, 2008) if you're a first-year student enrolled in a program of study that is at least a full academic year.

·        No more than $4,500 of this amount may be in subsidized loans (for loans first disbursed on or after July 1, 2008) if you've completed your first year of study and the remainder of your program is at least a full academic year.

·        No more than $5,500 of this amount may be in subsidized loans (for loans first disbursed on or after July 1, 2008) if you've completed two years of study and the remainder of your program is at least a full academic year.

For both the Direct Loan and FFEL programs, you'll be paid through your school in at least two installments. No installment may exceed one-half of your loan amount. Your Subsidized Stafford Loan money must first be applied to pay for tuition and fees, room and board, and other school charges. If loan money remains, you'll receive the funds by check or in cash, unless you give the school written authorization to hold the funds until later in the enrollment period.

UnsubsidizedStaffordLoan.org / PrivateSchoolLoans.org / FederalDirectLoans.net
PrivateCollegeLoan.org / FederalStaffordStudentLoan.com / StaffordLoan.org