College education can be the key to a great future career, but with tuition on the rise, the cost of attending a university is skyrocketing. Although saving for college is ideal, student loans can be a critical part of financing higher education.

A Stafford student loan is one such tool to help pay for college. This financing is guaranteed by the U.S. federal government, which allows the program to offer lower interest rates than can typically be found with private lenders. A Stafford award may be subsidized or unsubsidized, depending on the student and his or her family’s financial status. Interest that accrues on a subsidized Stafford award while the student is enrolled at least half time, during grace periods or deferments is paid by the federal government. For unsubsidized loans, interest that accrues during these periods must be paid in full by the borrower. However, interest that does accrue may be deferred while the borrower is enrolled in school at least half time. This accrued interest is then capitalized, or added to the principal amount.

The Stafford program has its origins in the Higher Education Act of 1965. This act and its subsequent amendments created a program known as the Federal Guaranteed Student Loan Program with the goal of providing financing for higher education. In 1988, Congress renamed the program for Robert Stafford, a Republican Senator from Vermont in honor of his support of education programs.

Because the Stafford program is a federal-government-funded initiative, eligibility requirements are more stringent than those of many other student loan programs. In order to receive a Stafford student loan, an individual must file a Free Application for Federal Student Aid (FAFSA), which details the student and his or her family’s financial status including assets, income and family size. The FAFSA must be resubmitted annually to verify a student’s need and eligibility for financial aid.

Like many student loans, the Stafford program does not require repayment as long as the student maintains at least half time enrollment. For both subsidized and unsubsidized Stafford awards there is a six month grace period following graduation or dropping below half time status during which no repayment is required. The repayment period is typically 10 to 25 years. Deferments for re-enrollment in school or forbearances for financial hardship are available, and loans may be forgiven in some circumstances, such as teaching in a low income school or if other public service requirements are met.