The Stafford Loan program is administered and overseen by the federal government. These loans are made available to both undergraduate and graduate college students who are enrolled or are planning to be enrolled at least half-time in an accredited postsecondary educational institution. These loans are made without regard to the credit standing of the student's family. The amount of the loan varies according to the financial need of the student.Loan Amounts and Interest RatesFirst year undergraduate students may be eligible for a Stafford Loan up to $5,500 if they are considered a dependent, and up to $9,500 if they are living independently. These amounts increase for second and third year students. Graduate students may be eligible for a Stafford Loan of up to $20,500 per year. These loans may be partially subsidized by the federal government. The interest rate on a subsidized loan for undergraduate students enrolled in the 2011-2012 academic year is currently 3.4 percent, while unsubsidized and graduate student loans carry an interest rate of 6.8 percent.Applying For a Federal Stafford LoanStudents must submit a Free Application for Federal Student Aid, or FAFSA. This form can be downloaded from the federal government education website or from www.staffordloan.com. The FAFSA will determine the actual financial needs of the student based on his or her family's ability to contribute to higher education costs. A student's dependency status will also be determined based on the information provided on the FAFSA. The federal government takes the information submitted on the FAFSA, contacts the college, university or trade school and works with the admissions personnel to determine dependency status. An award letter is sent to the student notifying him or her of the amount awarded. The dispersing of funds is usually made directly to the school and the financial aid office at the institution will make arrangements for the payment of tuition, room/board and student expenses.A Federal Stafford Loan need not be repaid while the student is enrolled. There are also debt consolidation programs available for students who have several different outstanding loans including the Stafford and other government loans. The federal government allows a student deferrals on repayment if he or she returns to school at a later date.