STAFFORD LOAN
Stafford Loan

A Stafford Loan is a federal student loan offered to eligible students enrolled in an accredited Title IV Post Secondary Institution to help finance their education.  In 1988, Congress renamed the Federal Guaranteed Student Loan program the Robert T. Stafford Student Loan program, in honor of U.S. Senator Robert Stafford, a Republican from Vermont, for his work on higher education.

Stafford Loans offer very competitive low interest rates and favorable repayment terms, since all Stafford Loans are administered by the federal government, which is considered a not-for-profit entity.  The federal government is not in search of a profit when lending to students wanting to borrow to pay for their education.  Rather, they are lending to students wanting to better their lives.
The Department of Education, which is a federal government agency, is responsible for all administrative aspects of the Stafford Loan Program.  They collect the student loan application, qualify prospective borrowers, release student loans to eligible students and parents, and collects all student loan repayments. In order to qualify for a federal student loan, which is administered by the Department of Education, students must meet strict Stafford Loan eligibility requirements and borrowing limits.

In order to qualify, students must first complete the FAFSA (Free Application for Federal Student Aid).  This is a FREE federal student aid application that determines if you qualify for a student loan.  It takes into account your current financial information and other factors to determine how much you can afford and how much additional money you will need in order to pay for your education.  Once you complete the application online or through mail, you will receive a federal aid award package through your schoolís financial aid office.
Stafford loans are available both as subsidized and unsubsidized loans. Subsidized loans are offered to students based on demonstrated financial need. The interest on Stafford Subsidized Loans is paid by the federal government while the student is in school, during the grace period, and during authorized deferment. For Unsubsidized Stafford Loans, students are responsible for all of the interest that accrues while the student is enrolled in school and during the grace period. The interest may be deferred throughout enrollment, but once the student finished school, all unpaid interest that was deferred is capitalized and added to the loan principal.

Students are not required to repay the student loan, while enrolled as a full or half time student, which is known as in-school deferment. Deferment of repayment continues for six months after the student leaves school either by graduating, dropping below half-time enrollment, or withdrawing from school. There are multiple repayment options available to students, so itís important that choose an repayment term that works best for you.



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