Stafford Loans

One of the most common and famous of all federal student loans is the Federal Stafford Loan, which is a government guaranteed, low interest loan. Helping students with their tuition and other college expenses for years, there are several types of Stafford loans and ways to apply for one. Stafford loans supply students that attend a school that takes part in federal aid programs with financial help. School refers to a two or four year private or public trade school, university or private college. Private organizations offer Federal Student loans under the rights of the United States Department of Education through the FDLP or Federal Direct Student Loan Program and the FFELP or Federal Family Education Loan Program. Federal student loans usually cover expenses such as fees, tuition, school supplies, books, room and board and transportation. Throughout the United States, most universities and colleges participate in one of these two programs or sometimes both. The federal government provides the money from the Federal Direct Student loan program while a third party lender, such as SallieMae credit union or bank that takes part in the program distributes the Federal Family Education Loan. Although the repayment choices are different, the eligibility requirements, rules and loan amounts remain the same with either program. 

There are Stafford loans available for both graduate and undergraduate students and also an unsubsidized Stafford loan and subsidized Stafford loan. To qualify for the unsubsidized Stafford, a student does not have to be low income to apply. The federal government commonly approves the Stafford unsubsidized loan, which is the responsibility of the student. Students repay both the loan and also the interest but only start once they graduate and the six-month grace period ends. An unsubsidized loan does accrue interest but it has a low interest rate in order to help students continue their education and accomplish their goals.

With the subsidized Stafford loan, the student or borrower must be enrolled and attending university or college on a half time or full time basis. Instead of the student, the U.S. Department of Education pays the Stafford loan interest as long as the student remains in college; after graduation until the six-month grace period ends; or any authorized, approved deferments. These postponements can happen if a student becomes unemployed temporarily, returns to college, or cannot make his or her Stafford loan payments.

Some of the reasons that students might be in a position to receive a subsidized student loan are that the financial means of the students parents are a lot lower than the funds necessary to cover the students education. However, the student and parents must complete a FAFSA or Free Application for Federal Student Aid form before they even consider the students eligibility to receive any type of federal loans. There is a universal formula, which the federal government uses, to calculate the parents financial ability to help pay for the students education.

Resources:

• Federal Stafford Loan
• SallieMae