Stafford student loan correspond to a financial aid federal program that comes to the help of needy people who want to continue their education. You can get access to such a program if you bring proof of low income. The payment deferment options, the low interest rate and the chance to consolidate education loans represent the main advantages of Stafford student loans. There are nevertheless limitations to this kind of loan and they are first and foremost noticed in the amount of money provided. You won’t be able to pay for your education from the loan alone and you’ll need to find ways to supplement funds.
Fill in a First Aid for Students Agreement or FAFSA and based on it, you’ll be able to access not only federal loans but grants and scholarships too. With the additional sum of money and the loan, you’ll be able to pay for college or university education. The repayment for the Stafford student loans starts six months after graduation or school withdrawal. This period during which no payment occurs, bears the name of grace period.
Stafford student loans can be classified in two categories: subsidized and unsubsidized. Starting from demonstrated financial need, the government pays for the interest rates while you are studying. In the case of unsubsidized Stafford student loans, the interest rate corresponding to the years of study, accrues and capitalizes to the initial debt.There is a 6.8% fixed rate establish in the government loan system. In some cases, even lower rates than the standard are possible.
A better alternative to Stafford student loans are Perkins loans that have a 5% interest rate and are granted to students with the direst financial situation. Yet, neither of these two federal loan systems will be able to cover all the undergraduate, graduate and post graduate degrees. Therefore, you’ll have to finance your studies out of the pocket, from personal savings or study-work solutions. Some families go as far as making home equity loans when their children do not qualify for stafford student loans.