For StudentsFederal Stafford Loans
The Federal Stafford loan is one of the government loans for the undergraduate, graduate and professional students in the US. This comes under the jurisdiction of the US Department of Education and belongs to the category of educational loans. This loan helps students to cover the costs of higher education obtained in a recognized university, community college or technical school over a period of four years.
The Stafford loan is one of the government loans and are of two types- the Federal Family Education Loan Program that is given by private lenders while the Federal Direct Loan Program that is offered by the Federal Department of Education. It can also be a subsidized or an unsubsidized loan. The loan is subsidized when the student demonstrates a need for the loan. In such as case the government pays for the interest on the loan while the student is in school and the principle amount is deferred. The loan remains unsubsidized when the student does not express a financial need for the loan. In such a case, although the principle amount is deferred, the student must cover for the interest amount himself.
As per education loans category, the eligibility criteria are that the student must be enrolled at least part-time and must show satisfactory academic progress. To apply for the Stafford loan the student must fill the Free Application of Federal Student Aid form online. The annual amount sanctioned depends on various criteria such as the year in the school, whether the student is a dependent or is independent and whether he is in an undergraduate, graduate or professional program. The money is sanctioned in two annual installments through the institution that uses it for paying the fees, boarding etc.
Only the remaining fund comes in the hands of the student. Repayment of this loan can be done over 10-25 years but must be started within 6 months of completion of education. The current interest rates range from 4.5% to 6.8% depending on whether this Government Loans is subsidized or not. Also, a small loan fee amounting to 1% of each disbursement must be repaid. Deferment of the loan is also possible under special circumstances.
For more information on the Federal Stafford loan visit http://www.FederalStudentAid.ed.gov/aidinfo and to apply for the same visit http://www.fafsa.gov/
Thus, in accordance with its loan name and loan category, the Federal Stafford loan is a great help to students enabling them to pursue their dreams of acquiring higher education.
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