Graduate School Stafford Loan FAQs

Updated 3/19/12: Statistics and information have been updated to reflect the current year.

Who can get Stafford loans?

Graduate students who are U.S. citizens, legal permanent residents, or eligible non-citizens who have been accepted at a U.S. school can get unsubsidized Stafford loans. Students cannot have defaulted on other federal student loans in the past and must attend school at least half time to qualify.

How much can I borrow from the Stafford program?

Graduate students can borrow up to $20,500 a year in Stafford loans, and up to $138,500 total for their studies (including any Stafford loans taken out during college).

Students in certain health fields have higher maximums. Starting July 1, 2012, they can borrow up to $47,167 a year and up to $224,000 in total through the Stafford program.

How much do Stafford loans cost?

As of July 1, Staffords will charge a fixed rate of 6.8 percent, plus up-front fees of 1 percent of the amount borrowed.

All Stafford loans for graduate students will be unsubsidized starting July 1, meaning interest will accumulate on the loans while students are in school.

[Read more about changes to Stafford loans.]

How do I get a Stafford loan?

You must fill out a FAFSA. For unsubsidized Stafford loans, students do not need to demonstrate financial need.

Does every grad student get approved for a Stafford loan?

No. Students who are not eligible for the program, who have defaulted on other college loans, or who are attending school only part time do not qualify.

What if I have bad credit?

You can get a Stafford loan if you've defaulted on a mortgage, car, credit card, or medical bills. The federal government does not do a regular credit check for Stafford loans. It only rejects applicants who have defaulted on other federal education loans.

What if I need more money than the Stafford maximums?

You can borrow up to your full cost of attendance from the federal Graduate PLUS program. But those have higher fees and interest and are not awarded to students with bad credit.

[Read FAQs about Grad PLUS loans.]

How is the credit crunch affecting Stafford loans?

Stafford loans are funded and made entirely by the federal government. So they remain available to all qualified students.

Are Stafford loan payments tax deductible?

It depends on your income when you start repaying. Generally, for a single person, education loan interest is not deductible if your adjusted gross income is more than $75,000.

When do I have to start repaying my Stafford loan?

The first bill comes due six months after you've left school, whether that's after graduation or after you've dropped out.

What are the advantages of a Stafford loan?

Stafford loans have a fixed interest rate, so the size of your monthly payment won’t increase if interest rates rise. Through Income-Based Repayment, Stafford borrowers can ask to have their payments capped at 15 percent of their disposable income. Starting in 2014 (or in 2012, if President Obama’s Pay As You Earn proposal is approved), payments will be capped at 10 percent of discretionary income.

And public servants who make 10 years worth of income-based repayments can have their remaining Stafford debts forgiven.

[Read more about Public Service Loan Forgiveness.]

What happens if I lose my job or get into other financial trouble?

Call the Department of Education and sign up for Income-Based Repayment. If that doesn't bring your payments down to an affordable level, you can also ask for either "deferral" or "forbearance" of your payments, which could postpone or temporarily lower your payment requirement.

[Find out how to avoid delinquency and default.]

What are the downsides of federal loans?

Unlike credit card debt and mortgages, which can be canceled if you file for bankruptcy, education loans of all types—whether federal or private—must be paid. Most bankruptcy courts will not cancel them unless your situation is extremely dire.

Trying to fund your education? Get tips and more in the U.S. News Paying for Graduate School center.