The Straight Facts About Stafford Loans

FederalStudentAid.Ed.Gov – Stafford Loans are some of the most common federal student loans available to college students today. Not only that, they are some of the most popular, due to their low interest rates and their flexible, affordable repayment plans. Stafford Loans are available to graduate students as well as undergraduate students. In both cases, students need only be enrolled as at least part-time students in their respective universities.

The first step in deciding to accept a Stafford Loan is choosing whether to borrow a subsidized loan or an unsubsidized loan (Student loans). Subsidized Stafford Loans are need-based loans, meaning that the amount offered depends on an individual student’s need for financial aid. Subsidized Stafford Loans are very popular, because the US government covers the cost of the interest while a student is attending college. They continue to pay for a six month grace period following a student’s graduation, as well as during any approved, authorized deferments after that period.

Unsubsidized Stafford Loans are not need-based. They are available for those students who do not meet the requirements for need-based loans, or for students who do qualify for need-based loans but who find that the amount of those loans do not meet all of their financial, educational needs. Because unsubsidized Stafford Loans have nothing to do with a student’s financial needs, the government does not cover the interest payments at any time. Rather, students are responsible for the interest, even while they are enrolled in school. It is possible, however, to defer these payments until later, so long as the student understands that any interest he or she does not pay will then be applied to the loan principal.

In general, a lot of students borrow both subsidized & unsubsidized Stafford loans at the same time – if, of course, that particular student qualifies for need-based financial aid. There is a limit on the amount of Stafford Loans, no many how many Stafford Loans a student borrows.

Before accepting a Stafford Loan, whether it is subsidized or unsubsidized, there are a few things students need to do and to understand. It is vital that a student reads all the information they receive concerning their financial aid package. After that, he or she must decide how much he or she actually needs to borrow, including all expenses – lab fees, books, room and board, et cetera – before accepting the entire package. Following that, a student must complete a Loan Acceptance Form and sign a master promissory note, basically promising that all loans will be paid back, even if a student defaults. For StaffordLoans, students must also fill out a Title IV Fee Authorization form & complete Stafford Loans Entrance Counseling.” FederalStudentAid.Ed.Gov  ”

This may sound daunting, but in truth, Stafford Loans are some of the most straight-forward loans available to college students today. They provide excellent entrance and exit counselors, and fully understand that sometimes it could be very difficult to pay loans back, hence their very flexible and varied repayment plans. Furthermore, they provide as much info as a potential borrower may need so that he or she understands what is required when a Stafford Loan is borrowed.

Gary Marjani is author of several articles pertaining to college financial aid like  FAFSA, Stafford Loan, Pell Grant, etc.”FederalStudentAid.Ed.Gov

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