Federal Direct Stafford Loans

The Health Care and Education Affordability Reconciliation Act of 2010 mandates that all federal student loans with a disbursement date on or after July 1, 2010 be originated and disbursed under the Federal Direct Loan Program (FDLP). Financial institutions, including Commerce Bank, no longer fund any new Federal Stafford and PLUS student loans. Commerce Bank has been in the student lending business for over 45 years and will continue to provide customer support for loans that were initially disbursed prior to June 30, 2010. Contact your college’s financial aid office for more information and to apply.

Federal Direct Stafford Loans are for Undergraduate and Graduate students who are enrolled at least half-time.

There are two types of Federal Direct Stafford Loans, which you may be eligible to combine:


  • Granted on the basis of financial need.
  • The government pays the interest on the loan while you’re in school as long as you remain in school at least half-time. Students are responsible for the interest that accrues during their 6 month grace periods.
  • Temporary suspension of interest subsidy during grace period. A recent change in federal law temporarily suspends government subsidies of interest on Direct Subsidized Stafford Loans during a borrower’s six-month grace period. This change means that for Direct Subsidized Stafford Loans first disbursed between July 1, 2012, and June 30, 2014, the borrower will be responsible for any interest that accumulates during the six-month post-school grace period.


  • Available regardless of financial need.
  • Interest accrues while you're in school that you must repay later.
  • Fixed interest rates for loans initially disbursed between 7-1-2011 and 6-30-2013:
    • Federal Direct Subsidized Stafford Loans for undergraduate students will be at a fixed interest rate of 3.4%*
    • Federal Direct Subsidized Stafford Loans for graduate students and all Federal Direct Unsubsidized Stafford Loans will be at a fixed interest rate of 6.8%*
  • Flexible repayment terms (no prepayment penalties)
  • Variable borrowing limits based on your year in school
  • Interest paid may qualify for a tax deduction**
  • Payments deferred while in school at least half-time

Important Disclaimers:

  • Interest rates are effective 7/1/11. The rates and other information set forth above have been obtained from sources deemed reliable, but do not constitute representations of Commerce Bank, nor shall this be considered an offer by Commerce Bank to fund any loan at rates other than those established by the United States Department of Education.
  • Consult a tax advisor for details. IRS Publication 970, Tax Benefits for Higher Education, explains these credits and other tax benefits.
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