The Stafford Student Loan Program - How to Get a Student Loan

Seeking to use the Stafford student loan program that will help you go to college? It's a great help for many students. Take a look at how to qualify and here is another loans to help you get through school as well as finish your degree.

Plus, you'll find some ideas at the conclusion in case you don't quite qualify for this particular loan program. Also, you'll learn where to go to learn more on the whole subject of financial aid.

Just what Stafford Loan?

The Stafford student loan program is really a federal government aid. The program offers government guaranteed student education loans to students who need help with money.

You are able to borrow varying amounts, with the program allowing you to borrow more at certain points on the way. As a graduate student you can borrow probably the most, of course.

These loans can come directly in the education department, or from a bank that participates within the program. Make sure you know what you are becoming.

In some cases, if you don't qualify, you may receive an offer from a bank that looks like the same, but is really a private student loan. These have higher interest along with other requirements. They have their place and can assist you to finish school, but you need to understand that which you are signing.

How do You Qualify for the Stafford Education loan Program?

Have you heard of the FAFSA? It means Free Application for Federal Student Aid. You'll need to fill one out to obtain a government backed loan like this.

That's not this kind of bad news, though. Once you fill out the FAFSA, you can also qualify for the Pell Give program, which could really help. Some federal scholarships also want it, along with some additional paperwork.

Your FAFSA will show how much you have to go to college, and how much your family needs to send you. Then, you get compared to everyone else who needs help. The program evaluates your application and supplies you with a notice of how much financial aid you will receive.

The notice will tell you how much profit loans and how much in grants. The grants or loans are easy: you just pick up a examine. The loans require you to fill out a promissory note and wait a little. Still not too hard.

If You Don't Be eligible or Need More

What if you don't be eligible or need more aid? You might want to think about those private student loans. But be careful. You don't wish to graduate with tons of debt and no existence.

You can also apply for scholarships. Apply for as much as you can that you are qualified for, and find out if you win some. If you are competent, you can win some of these. Keep applying and learn to submit the best application you can.

Another suggestion: If you have a good job, check with your company to see if you're able to get tuition assistance. In tough times, this program could get cut to save money, but many companies still contain it. Tuition assistance can really take the sting from tuition.

Subsidized And Unsubsidized Stafford Student Loans

Stafford loans were established by Congress in 1965 as part of the FFELP (Federal Family Education Loan Program) to provide financial aid for students. They were originally intended to help student who were 'in need' but just what was meant by the term 'in need' was not entirely clear and the program was rapidly expanded. Today, Stafford loans account for more than 90% of the $50 billion dollars plus which is distributed each year to the various FFELP programs.

One way in which the definition of 'in need' was quickly broadened was to create two different forms of Stafford loan - subsidized and unsubsidized.

In the case of subsidized loans, the Federal Government pays the interest charges which would ordinarily accrue from the date on which the loan is originated until payments start. Usually, no payments are made while the student is attending school (as long as the program is a half-time program or greater) and for a further six month grace period after completion of the course. Students can however request that payments begin earlier if they wish to start repaying their loan before the usual date.

Because the government pays interest on these loans they are normally need-based in that aid officials will look at a student's family income when deciding whether or not to grant a loan. In making their decision a number known as the EFC (Expected Family Contribution) is used and this is obtained from income information provided on the FAFSA (Free Application for Federal Student Aid) application form.

About two out of every three subsidized Stafford loans are given to students whose parents have an adjusted gross income of less than $50,000 per year. A further 25% are awarded to students whose families fall into the $50,000 to $100,000 per year range. However, the definition of 'in need' is still very flexible and about 10% of subsidized loans are given to students whose combined family income is in excess of $100,000.

If a student does not qualify for a subsidized loan then he or she will normally be eligible for an unsubsidized Stafford loan. In this case interest due on the loan accumulates from the day the loan money is disbursed until the day that the loan is paid off and interest charges can build rapidly. For example, even in we take the case of a modest $5,000 loan, at 6.8% the first year's interest charge is approximately $430 and this is added to the $5,000 with further interest charges being applied to the higher figure in subsequent years.

Trying to work out interest payments can be a complicated business, especially if you have a series of different loans taken out over two or three years in college, because, while interest is quoted as an annual figure, it is calculated monthly and added to the loan principle as you go along with interest in subsequent months being charged on the increasing figure. A good approximation can be made however by using one of the many freely available online mortgage calculators.

From the example above it should also be noted that $5,000 is a very low figure as student loans go and that most students will borrow considerably more than this. Indeed, the average student probably borrows about $15,000 in a mixture of different government and private loans