Federal Stafford Loan

Federal Stafford Loans are available for undergraduate and graduate students and come from one of two sources:
Direct Stafford Loans are made by the U.S. Department of Education. You repay a Federal Direct Stafford Loan to the U.S. Department of Education.

Federal Stafford Loans are made through Federal Family Education Loan (FFEL) Program. Although FFEL funds come from private lenders, such as banks and credit unions, they are subsidized and supported by the U.S. Department of Education. You repay a FFEL Stafford Loan to the private lender that made the loan or to the agency it designates.

In either case the terms of the loan (loan amounts, interest rate, and other benefits) are generally the same.

Some schools require you to work directly through them. Go to this page
Federal Stafford Loan Application and follow the instructions to find out which applies in your situation.

For both the Direct and FFEL programs there are two types of Stafford Loans:

A subsidized loan is awarded on the basis of financial need based on your FAFSA application. If you are eligible for a subsidized Stafford loan you will not be charged interest while you are in school at least half-time basis, during a grace period of up to six months after you are no longer enrolled on a full time or half time basis, or during certain defined deferment periods. The Federal government pays (subsidizes) the interest during these periods.

An unsubsidized loan is not awarded on the basis of need but you still must apply using the FAFSA. For unsubsidized loans, you will be charged interest from the time the loan is disbursed until it is paid off in full. However, you can choose to defer payment of interest while you are in school and during any grace or deferment period.

It's important to keep in mind, if you allow interest to accumulate during these periods, it will be capitalized. This means that interest will be added to the principal amount of your loan, and additional interest will be based on that higher amount.