Stafford Federal Student Loans are federal sponsored loans available to undergraduates and grad students, offering low rates of interest, and deferred repayment until your course completes.
There are 2 types of Stafford Loan -
Subsidized Loans, which are awarded on hardship grounds. Both interest and capital repayments are deferred.Unsubsidized Loans, available to most students. With an unsubsidized loan only capital repayments are deferred - interest is payable from the start of the loan.
To apply for a Stafford Loan, you fill in a FAFSA (Free Application for Federal Financial Aid), and send it to the relevant department at your school. Applications are normally accepted from the summer before school year, right through to spring. You can only apply for a loan for the current academic year, and will need to re-apply every year.
The school evaluates your loan request, and will inform you if your application is successful. Finally you'll have to sign a promisory note, acknowledging your legal obligations to repay the loan, as the loan will not be cancelled if you drop out early, or fail to find employment after school.
Schools generally participate one of two types of Stafford Loans - FFEL Stafford Loans, where the lender is a bank or credit union, or Direct Stafford Loans, where the lender is the US Department of Education. Don't worry which your school offers, as in general there's no practical difference.
You'll be paid through the school. The money is first applied to tuition fees, room and board, and then you'll receive remaining funds by check.