Stafford Loans

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Stafford loans are the most common type of college funding available.  There are two main types of Stafford loans, the subsidized loans and the unsubsidized ones.

A Stafford subsidized loan is based on your financial needs and there is no interest while you are in school at least half time and during the grace period.  You start paying interest when you start to repay the loan.

A Stafford unsubsidized loan is not need based and the interest accrues the whole time you are in school.  If you do not qualify for the subsidized loan based on your family need you may still qualify for an unsubsidized loan.

The interest rate of a Stafford loan is usually one of the lowest rates possible.  These loans are guaranteed by the government and do not require a credit check or a co-signer.  When you leave school you have a six month grace period before you must start repaying the loan and there is a minimum $50.00 a month payment.

It is possible to receive both types of loans.  After receiving your subsidized loan, based on your needs, you can apply for a loan for the balance of your tuition.  If you are receiving both of these loans at one time, before you start the repayment process, you may want to look into a Stafford loan consolidation.  This would combine your loans into one payment, usually reducing your monthly payments and your interest.

There are several repayment options for a Stafford Loan.  The standard repayment is a monthly payment combining interest and principal.  The graduated repayment have lower payments in the beginning and increase over the term of the loan.  An income-sensitive repayment would be based on a percentage of your income.  Extended repayments can extend the length of your loan for up to 25 years.

Pages related to Stafford Loans

College Funding : Planning for College : Finance a College Degree
College and the Rolling Stones : College Money : Student Loans
Student Credit Cards : Money For Study Abroad : Financial Aid