Stafford Loan

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DEFINITION of 'Stafford Loan'

Federal, fixed-rate student loans available to college and university undergraduate and graduate students who are attending college at least half-time. Stafford loans are intended to supplement existing personal and family resources available for higher education costs, including scholarships, grants and work-study. Stafford loans can be used to pay for the costs of education, including tuition, room and board, books, and other education-related expenses.

INVESTOPEDIA EXPLAINS 'Stafford Loan'

A Stafford subsidized loan is a federally-guaranteed loan that is based on financial need. The maximum amounts that may be subsidized are $3,500 per year for freshmen, $4,500 per year for sophomores, $5,500 per year for juniors, and $5,500 per year for senior or fifth-year students. Students must first be accepted to a college or university and complete the Free Application for Federal Student Aid (FAFSA) prior to applying for the Stafford student loan.

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