www.sampleresume.net |
|
|
Stafford Loan
|
Article on Stafford Loan
There are many different avenues to pay for a college education including student loans, grants, and scholarships. Student loans can be taken from the federal government or through a private lender. Of the federal loans, Stafford loans are the most common and widely known education loan.
What is a Stafford Loan?
A Stafford Loan is a low interest education loan provided by the federal government to help pay for an education at an accredited higher education institution in the United States. They are given based on financial need, not on creditworthiness and can be granted as long as the student is in good academic standing and has not defaulted on any student loans. These loans are available to U.S. Citizens and permanent residents as well as some other non- citizens.
Subsidized vs. Unsubsidized
Subsidized loans are need-based. The interest on a subsidized Stafford Loan is paid by the federal government while the student is in school and during any periods of grace, deferment, or forbearance. Any eligible Stafford loan recipient can receive unsubsidized Stafford loans. The loan interest must be paid by the student. Interest only payments can be made during periods of approved nonpayment such as deferment. If these payments are not made, the principal amount when repayment begins will be higher.
Applying for and receiving loans
Students apply for a Stafford Loan as well as other federal aid programs by filling out a FAFSA form. When the application is processed, family contribution information is forwarded to the school. An award letter is then sent by the school stating all financial aid being offered to the student. The federal government disburses the loan to the school at the beginning of each school session. After the school uses all funds it needs to pay tuition and fees, any remaining funds are sent directly to the student.
Loan Amounts
The amount that a student can borrow has specified limits based on the year in school, if the student is dependent or independent, and if the degree sought is graduate or undergraduate. These amounts range from $5,500 to $20,500 per year with a cap on the portion that can be subsidized. For undergraduate degrees, the amount that can be borrowed increases each year. There is also a cap for the total amount of Stafford loans that can be given before graduation.
Repayment
Loans do not need to be repaid until either six months after the degree program has been completed or the student begins attending school less than half time. Each separate loan will have its own repayment schedule, so consolidation may be something to consider. There are options for forbearance and deferment and flexible payment options if it is difficult to make payments. Under circumstances, all or part of the loan may even be cancelled.
The Stafford loan is a staple of the federal aid granted to students attending college each year. With less strict requirements and lower interest than private loans, they are a much better way to finance education. Even students who do not have financial need according to the government can benefit from this program.
|
|
|
|
|
|
|