The Federal Stafford Loan is a cooperative effort among lending institutions, educational institutions and guarantee agencies on behalf of the federal government. The lender provides the loan funds.
Schools determine the amount of the loan, student's eligibility, and the loan period.
Guarantee agencies ensure the repayment of the loan in the event of a borrower's default, disability, or death. Federal Stafford loans help you meet your educational expenses. Unlike gift aid, loans must be repaid. For subsidized loans , loan interest is paid on your behalf by the government while you are enrolled as at least a half-time student and during grace or deferment periods. For unsubsidized loans , loan interest accrues within sixty days of disbursement and can be paid while you are in school, or capitalized until you begin repayment.