Line up the blue felt pieces against the interior corners of the star. The points of the white felt will extend beyond the edge of the circle and if you’ve lined everything up correctly the blue felt should meet up with the layout dot you made near the point of each star. Stitch down the long edge of the stars.
Now you should have a white star in a blue circle! Feel free to trim the seam allowances as close as you like and remove the excess star points so they are even with the circle.