What is a Federal Stafford Loan?

Stafford Loans were a type of student loan issued by the federal government under the discontinued Federal Family Education Loan Program (FFELP). No new Stafford loans have been made since July 1, 2010. They were available in unsubsidized and subsidized versions.

Today, all new federal student loans doled out to undergraduates are called federal direct loans, issued under the Federal Direct Loan Program. Many schools and people still refer to these direct loans as Stafford loans. This is misleading. If someone refers to a new Stafford loan, they really mean an unsubsidized or subsidized federal direct loan.

But if you borrowed prior to July 2010, you might still be repaying actual Stafford loans. About 8.5 million borrowers owe $191 billion in outstanding FFELP loans, which includes Stafford loans, according to the latest Federal Student Aid office data. If you think you might have Stafford loans, here’s what you need to know about this discontinued type of federal student loan.

How do I know if I have Stafford loans?

To find out if you have Stafford loans, log into your account on StudentAid.gov. You’ll need your Federal Student Aid (FSA) ID and password to log in.

Once you get to your FSA dashboard, select “My Aid” from the dropdown menu. Under the “Loan Breakdown” section, you can click “View Loans” and “View Loan Details” to see the detailed name of each of your federal student loans.

If you have a Stafford loan, the detailed loan name will include “FFEL” and either “unconsolidated” or “consolidated.”

Stafford loan repayment plans

Borrowers with unconsolidated Stafford loans have limited repayment options.

These are the four primary repayment plans available for Stafford loans:

Stafford borrowers with low incomes may also be eligible for a fifth option called the Income-Sensitive Repayment Plan. Contact your loan servicer to see if this is available to you.

Should I consolidate my Stafford loans?

Consolidating your Stafford loans can open the door to more income-driven repayment (IDR) and loan forgiveness options, including Public Service Loan Forgiveness and SAVE, the new IDR plan. These can substantially lower your monthly payments and forgive remaining student debt after a set number of years.

Consolidation also has drawbacks, like interest capitalization. Any outstanding interest on your Stafford loans will be added to the original principal balance on your consolidation loan. Going forward, interest may accrue on a larger balance.

How do I apply for Stafford student loans?

You can’t get Stafford loans anymore — but you could be eligible for their replacement: federal direct loans. Remember, if a school directs you to information about taking out Stafford loans, they really mean direct loans.

To see the amount of direct loans for which you could qualify, you must submit the Free Application for Federal Student Aid (FAFSA). This form can also unlock aid that doesn’t need to be repaid, like grants, work-study and some scholarships.

If your federal student aid package isn’t enough to cover the total cost of your education, private student loans can fill in any funding gaps. However, private loans come with fewer borrower protections and repayment options than their federal counterparts, so use them as a last resort to pay for your education.

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