Direct Stafford Loans

Subsidized and Unsubsidized Stafford Loans


The Federal Stafford Loan program consists of two types of loans, which are Subsidized and Unsubsidized. Your eligibility for the two types of Stafford Loans is evaluated based on a complete current year Free Application for Federal Student Aid (FAFSA) and school information. Students may receive both types of Stafford Loans, but are subject to annual and career limits.

A Subsidized Stafford Loan is awarded on the basis of federal financial need. You are not charged any interest before you begin repayment or during authorized periods of deferment. The Unsubsidized Stafford loan accrues interest from the time of the first disbursement. You are not required to pay this monthly interest on your Unsubsidized Stafford Loan while you attend at least half-time in a degree program. However, unpaid interest on the Unsubsidized Stafford Loan is capitalized by the lender onto the principal of your loan. For more information regarding Direct Stafford Loans, such as interest rates, loan limits (annual and career), repayment, and more please visit

Step By Step Stafford Loan Instructions

  1. You must file a FAFSA and receive an award notification from our office listing a Stafford Loan offer.

  2. You may initially accept, reduce, or decline the Stafford Loan on ULink using the option (Accept/Decline Financial Aid) under the Financial Aid section on the Student Services tab. You may review your account activity on ULink below Tuition, Fees, Payment Options on the Student Services tab. For assistance with ULink, review our ULink Financial Aid tutorials.

  3. If you are accepting the Stafford Loan, you must be enrolled at least half-time in a U of L eligible degree program for the funds to disburse to your account. Half-time for undergraduates is 6 hours and half-time for graduate/professional students is 4.5 hours in fall and spring (and 3 hours in summer).You must continue to meet all other federal eligibility requirements.

  4. If you are a first-time Direct Stafford Loan borrower at UofL, you must complete an Entrance Counselingsession to be informed of your rights and responsibilities.

  5. Students must sign a Master Promissory Note for their loan. Please note that if you previously borrowed from a FFEL lender/bank, you will need a new MPN with Direct Loans. Before going to the MPN website be sure to have


    1. Your social security number.
    2. Your driver’s license number.
    3. Your permanent address and telephone number.
    4. Information for two references, including name, addresses, and telephone numbers.
  • Use calculators provided by U.S. Department of Education to see what your repayment will look like.
  • The Subsidized Stafford Loan is better than the Unsubsidized Stafford Loan because the interest on the Subsidized Stafford Loan is paid by the federal government. The interest on the Unsubsidized Stafford Loan is the responsibility of the student