The most popular type of student loan is the Federal Stafford Loan. These are low fixed-interest loans for undergraduate and graduate students. The Stafford loans are the most common form of federal financial aid.

There are the Subsidized and the Unsubsidized Stafford Loans. The Subsidized Stafford Loan is the better of the two since no payments are required and no interest accrues while the student is enrolled in college. The Unsubsidized Stafford Loan is still a good deal but interest will begin to accrue from the moment the loan is disbursed to the school. There are no interest or principal payments until after graduation.

There are maximum limits on both types of loans. The limit increases each year the student is in college.

To be eligible for the Subsidized Stafford Loan, the parents must complete the FAFSA.