Stafford student loans


Students can go to college with Federal Student Loans which can help them pay until they graduate. There are many types of loans of this type. Stafford student loans are just one of them. This article will attempt to discuss the basics of this type of loan in order to give information on how it helps students in this country.

A Stafford loan is a loan available to students enrolled in accredited colleges, universities and institutions. Congress created it in 1965 to extend financial aid to students who need to supplement their resources. Under the federal FFELP family education loan program, the Stafford loans have been extended to cover 90% of the $ 50 billion plus funding.

Almost everyone is eligible to get this loan. At the time of his signing in Congress, the definition of recipients was not very clear, so the program quickly expanded. There are two types, the subsidized and the unsubsidized.

For grant recipients, the federal government pays the interest charges on the loan for the entire period the student is in school until the six-month grace period after graduation. There are certain conditions for the soft loan and one of them is family income. The government uses an expected family contribution (CFE) number to determine whether or not a subsidized loan will be granted.

Two in three such loans are made to students whose parents have a total gross income of less than $ 50,000 annually. About 25 percent are extended to families with gross income over $ 50,000 but not over $ 100,000. 10 percent is given to those with income over $ 100,000.

The other type of Stafford loan is the unsubsidized loan. The interest charges for this loan accumulate until the loan is fully repaid. The loan can be borrowed from a bank or credit union, or directly from the Ministry of Education. Interest rates change from year to year but these rates are still very low compared to private loans offered in the market. For the academic year 2008 to 2009, the unsubsidized rate is 6.8% while the subsidized rate is 6%.

In order for a student to qualify for the Stafford loan, he must be enrolled in at least a part-time period. To apply, he must complete and submit the FAFSA (Free Application for Federal Student Aid) form. This loan is only granted to U.S. citizens or nationals, permanent residents, or eligible non-citizens. The student must also be enrolled in accredited schools listed in the Federal Family Education Loans Program.

Family income and financial need will determine whether the applicant will qualify for subsidized or unsubsidized loans. The loan is repayable in 25 to 30 years depending on the type of Stafford student loans that have been granted. There are also many reimbursement options that the applicant can choose from.

Source by Brian J. Link

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