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What Is a Federal Stafford Loan

The Federal Stafford Loan is a loan to a student to be used for education-related expenses. There are two programs in the Federal Stafford Loan: Subsidized and Unsubsidized.

The Subsidized Stafford Loan is interest-free to the student (the government pays the interest) while the student is enrolled in school at least half time, during the grace period, and during periods of authorized deferment.

The Unsubsidized Stafford Loan is not interest-free at any time. However, the interest and principal payments may be deferred while the student is in school at least half time, during the grace period, and during authorized periods of deferment. If the interest payments are deferred, the interest will continue to accrue and will be added (capitalized) to the principal balance once repayment begins.

Loan Limits: Graduate Students ($138,500 Lifetime Aggregate)

  • Federal Subsidized Stafford Loan—$8,500 per award year 
  • Federal Unsubsidized Stafford Loan—$20,500 per award year minus any Subsidized Stafford amount


How To Apply

Pepperdine participates in the Federal Family Education Loan Program and offers student loans through banks and other lending institutions. To apply for a student loan, students must complete the Free Application for Federal Student Aid (FAFSA) and a Graziadio School Application for Financial Aid.



The Stafford Loan has an origination fee charged by the government.

No Prepayment Penalty

The Stafford Loan can be repaid in full or in part at any time without penalty. Prepayments are applied first to any accrued interest and then to the loan principal.

No Credit Check

Because the Stafford Loan is guaranteed by the federal government to the bank, there is no credit check required for students. However, the student cannot be in default on a prior student loan.

Grace Period

Both loan types have a grace period which means the student does not have to begin making payments until six months after graduating or dropping below half-time attendance.

Repayment Options

The Stafford Loan is repaid over a ten-year period following the end of the grace period. There are three types of payments available to students. In order to request a specific repayment option, please contact your lender.

  1. Standard repayment (the same payment every month for up to ten years)
  2. Graduated repayment (the payment starts small and gradually increases over the ten-year time frame)
  3. Income-sensitive repayment (the payment is dependent upon your income and is adjusted each year for up to ten years)

Loan consolidation (Through the Consolidation Loan program, a lender buys all of your eligible loans and combines them into one new loan)


The federal government offers deferments on this loan for periods of

  • Unemployment
  • Enrollment in school
  • Economic hardship

Please contact your lender to request the appropriate forms.