Federal Direct Subsidized Stafford Loans are awarded to students who demonstrate financial need. Interest is deferred while the student is enrolled in school on at least a half-time basis and during the grace period. Only undergraduate students are eligible for Subsidized Stafford Loans.
Federal Direct Unsubsidized Stafford Loans are also available for undergraduate students, and graduate and professional students with need. Students who do not qualify for need-based assistance may qualify for these loans. Unlike the Subsidized Stafford Loan, interest accrues on this unsubsidized loan during the time of enrollment, during the grace period, and during periods or repayment or deferment. The borrower can make interest payments while in school or can request that the servicer add the interest to the principal of the loan (this is called "capitalization"). If the borrower does not make an interest payment as scheduled, the interest is automatically capitalized.
Subsidized loans: 150 percent loan limit
Due to the Moving Ahead for Progress in the 21st Century Act,
a new borrower on or after July 1, 2013, cannot receive subsidized
loans for more than 150 percent of the published length of the
borrower’s educational program (for example, a student who is in a 4-year program can receive subsidized loans for up to 6 years).
The law also notes that a borrower who becomes ineligible for
subsidized loans because of the 150 percent limit is ineligible for
interest-subsidy benefits on all subsidized loans first disbursed to
that borrower on or after July 1, 2013.
Who's a first-time borrower?
Generally, one who did not have an outstanding balance of principal or
interest on a Direct Loan or on a FFEL Program loan on July 1, 2013.
Please note that, as of July 1, 2021, this loan limit has been repealed for all first-time borrowers on or after July 1, 2021. While this limit will still apply to students who borrowed a Federal Direct Loan or FFEL Program Loan between July 1, 2013 and July 1, 2021, students whose first Federal Direct Loan disbursement was on or after July 1, 2021 will no longer be held to this 150% limit.
Student Financial Services is a good starting point for information and resources regarding obtaining financial aid, and for issues or assistance after you successfully obtain a loan. After you obtain a loan, the Washington Student Achievement Council (WSAC) can also provide information and resources about student loan repayment, or can assist with a complaint relating to our student loans or student loan servicer. Please visit wsac.wa.gov/loan-advocacy or contact the WSAC Student Loan Advocate at firstname.lastname@example.org for additional information.
Additional help is available with the Federal Student Aid Ombudsman Group. For more information, please visit Getting Prepared Before Seeking Help.