StaffordLoans

What are Stafford Loans? Stafford loans are one of the types of loans available from the federal government. These educational loans are awarded by the Department of Education. There are two types of Stafford loans: subsidized and unsubsidized. One is based on financial need and the other is not. Both types of Stafford loans are payable once you have been out of school for six months, whether you graduate or drop out. smake sure you understand what type of Student Loans you will be taking.

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Stafford loans, like other federal education loan programs, are regulated by the government but offered through lenders such as Citibank and Sally Mae.

Subsidized and Unsubsidized Stafford Loans: Subsidized Stafford loans are awarded based on financial need. These Stafford loans do not accrue interest while you are attending school. Instead, the federal government pays the interest on these loans for you until you finish school. Unsubsidized Stafford loans are not based on financial need, and are available to everyone. These Stafford loans accrue interest from the time that the funds are disbursed to the school, although you still do not have to pay on them until you have been out of school for six months.

Qualifying for Stafford Loans: In order to qualify for Stafford loans, you must be enrolled at least half time in a college or university. You will need to fill out the FAFSA, or Free Application for Federal Student Aid. This application is used to determine your financial need, and how much of your education you are responsible for paying for without the government’s assistance. You also cannot have any other student loans in default, or owe refunds for federal education grants.

Amount that Can Be Borrowed in Stafford Loans: There are maximum amounts that can be borrowed in Stafford loans for your education. There are maximum amounts set for each year of school as well as a total maximum debt for your total education. These are further broken down with a difference between the maximums for dependent students and independent students, as well as graduate and undergraduate students. The maximum for a dependent’s undergraduate education is twenty three thousand dollars. The maximum Stafford loan debt for an independent student’s undergraduate education is forty six thousand dollars, but only twenty three thousand of that amount can be in subsidized Stafford loans. Graduate students can borrow a maximum amount of $138,500 in Stafford loans, and only $65,500 of that amount can be in subsidized Stafford loans. The maximums for graduate students include the amounts borrowed for undergraduate study.

Applying for Stafford Loans: The first thing you must do to apply for Stafford loans for your education is fill out a FAFSA, or Free Application for Federal Student Aid. This application can be filled out easily online and signed with a PIN that is issued by the Department of Education. Once you have your FAFSA Student Aid Report, or SAR, you will need to find your Estimated Family Contribution, or EFC. This is the amount of that the government expects you to contribute to your education. If your EFC is very low or zero, you will definitely qualify for subsidized Stafford loans. At this point, your school will probably let you know what types of aid you are qualified for, and what loans, work study, or other programs you will need to apply for to pay for your education. Most schools will apply for the Stafford loans on your behalf using your FAFSA and a promissory note or other agreement. However, some schools may require you to apply for the loans yourself, which you can do through several lenders.

For all your Student Loans, you have to researcha and understand what is best for you and your situation and family support.