What Is A Direct Stafford Loan? Benefits And Privileges

Financial hard times are normal especially when you’re a student. So, taking a direct Stafford loan to help you with tuition and living expenses is not a terrible idea. It doesn’t mean you’re not hardworking.

According to the Chamber of Commerce, the outstanding loan debt in America is $143 billion. In this figure, 21.1 million outstanding personal loans in the U.S as the average interest rates for these loans vary between 10% and 28%.

However, these numbers are likely to increase in the coming years bearing the effect of the global pandemic. Funnily enough, you might think that majority of the beneficiaries of personal loans are the poor. Essentially, some rich folks make up the large numbers.

The table below clearly outlines all the knowledge we will expose to you in this article regarding a direct Stafford loan. Additionally, you get to know about how you can pay off your loan easily.

What is a Direct Stafford Loan?

Direct Stafford loans are simply student loans which the student must repay after a particular period of time. So, this period depends on the agreement reached between the student and the loaning body.

The DSL loans are not for undergraduates alone as graduate students can greatly benefit from it. Hence, this student’s loan is not segmented to a particular group.

Every student who wants to take up a DSL has access to about $5,500. And this amount gradually increases as the student adds more years of study. Graduate students, however, get a bigger loan size.

The interest rate at which the student will be charge is highly dependent on the loan that the student takes up because there are two types of Direct Stafford Loans. They include;

  • Subsidized Stafford Loan
  • Unsubsidized Stafford Loan

Subsidized Stafford Loan

We are all familiar with the word “subsidy”, so we can deduce a clear meaning of the above statement.

However, for clarity sake, a subsidized Stafford loan is a loan wherein the government pays the interest while you are in school, during grace periods, and during any deferment periods.

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Conclusively, in a time like a pandemic, the government is still responsible for taking care of the interests accrued by your loan.

Unsubsidized Stafford Loan

The unsubsidized loan is just the opposite of the subsidized loan. In essence, you’re totally responsible for all the interests accrued by your loan.

The government has no participation in ensuring that you complete your payment. You do it, yourself!

Your choice of a loan for yourself will depend totally on your eligibility. However, you can see if you can access student loan scholarships to help you through your period of study.

How Does a Direct Stafford Loan Scholarship Work?

These scholarships actually follow a stipulated process. You can’t just wake up one morning and decide to pick up a loan scholarship. You must fulfill the needed requirements.

These requirements transit from being either a graduate or undergraduate student, to demonstrating financial need and the incapability to study without a loan. Additionally, you must be able to show a loan payback plan.

Essentially, the government awards the scholarship to students who have demonstrated and fulfilled the above objectives.

As a beneficiary of this loan scholarship, you can review your loan offer and twerk your agreement with the decision body. Ultimately, this will help when you want to pay off your loan.

Must Read: 21 Full Scholarships To Pay Off Student Loans

Who is Eligible For a DSL?

A DSL has been very helpful in getting many students to their study destination and also to fulfiling their study dreams despite financial restrictions.

Due to the government’s desire to help these students, they offer these loan programs. The idea of the program is to enable the student’s work hard while studying so as to earn more money to repay the loan.

For the cause of this program, undergraduate and graduate students are eligible for the DSL.

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How Long Does It Take to Get a DSL?

You wouldn’t think that you can apply for a DSL and get it delivered to your room the next morning. No way! There are some processes you need to undertake which include the application process.

However, the DSL takes about 2-10 weeks to get approval from the governmental body. So, you have to ensure your documents and application is spotless if you wish to get the DSL.

Also, Read the Full Guide on how to get Student Loans for International …

How to Apply for the DSL?

Applying for the DSL follows certain levels of procedures which are very applicable. There are four stages in the application for the Direct Stafford loan and I’ll take you through the processes.

#1. Complete the FAFSA or Renewal FAFSA (for returning students)

Completing the FAFSA form is actually the first stage in getting your DSL. Hence, you need to pick up your form at FAFSA.ed.gov.

After you have picked up yoit form, you must completely fill it. Ensure you avoid mistakes and you correctly input data.

#2. Receive a financial aid award letter by mail or email from your school’s financial aid office

After you have completely filled and submitted the FAFSA form, you will then wait to receive the award letter.

This letter will either come by mail or through your school’s financial office. Hence, the letter will summarize your available financial aid, including Direct Subsidized Loans (if eligible).

#3. Contact your school’s financial aid office to accept the financial aid and including student loans

After you have received the first mail confirming your request to pick up the loan, FAFSA will then contact your school to accept the financial aid.

This financial aid will include the student loan and other payments depending on the type of loan you requested.

#4. Sign any associated paperwork such as the Master Promissory Note (MPN)

The last stage of the application process involves the signing of all necessary paperwork.

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You will need to sign the paperwork which confirms that you have received the financial aid and that you’ll pay it back in due time.

How can I repay my Direct Stafford Loan?

The repayment period for a Stafford loan is usually 10 years. However, Stafford loans allow a six-month grace period once you’ve graduated, left school or decided to enrol less than half time.

During this time-frame, the body will send you information from your repayment plan. They usually send the first check you need to pay during this period.

As earlier said, if you’re taking up the interests too, you’ll need to pay them up little by little as they will be added to the checks they send to you.


How can I contact the Direct Stafford Loan?

You can contact the DSL at https://studentaid.gov/h/apply-for-aid/fafsa.

How long does it take to get a Direct Stafford Loan?

It takes about 2-10 weeks to get a DSL.

Who is Eligible for a DSL?

Undergraduate and Graduate students are eligible for a DSL.

What is the average loan amount?

The avergae loan amount for a DSL is $5,500.


The repayment period of 10 years for this loan makes the repayment process very convenient and possible.

Indeed, getting a Direct Stafford loan is a good idea if you’re financially strained and find it difficult paying your tuition.

You’ll be glad you took this decision because you’ll be heavily rewarded for it.


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