If you have the desire to attend an institution of higher learning but you do not have the money to go then applying for a student loan is a way to make your education hopes and dreams a reality! It is important to make it clear that while student loans are a form of financial aid they are not the same as grants, bursaries or scholarships. Student loans must be paid back in the same way as other types of loans must be, whereas the other sources of financial aid mentioned here do not have to be paid back.
The United States Department of Education helps millions of students and their families pay for post-secondary education on an annual basis by providing as much as $67 billion in a variety of financial aid packages. These include loans, grants and aid that are campus-based.
It is the Office of Student Financial Assistance (FSA) that is responsible for providing the necessary financial assistance to students who wish to attend college or university. There are a variety of Federal student financial aid programs. Each program has its own eligibility requirements. There is no “one size fits all” when it comes to financial aid as different students require different things. The loan programs that FSA offers include Stafford loans; Federal insured student loans, consolidated loans, parent loans for undergraduate students, supplemental loans for students, Perkins loans and income contingent loans.
Here we take a closer look at one of the most common of all Federal student loans- the Stafford student loans. Read on.
Stafford Student Loans
The Federal Benefit Program extends loans to both undergraduate as well as graduate students. Stafford loans originate from two sources- there are Direct Stafford loans and Federal Stafford loans.
The Direct Stafford loans are made to students by the U.S. Department of Education. When it is time for them to be repaid they are to be repaid to the same department from which they were issued.
The Federal Stafford loans are administered to students through the Federal Family Education Loan (FFEL) Program. The funds for FFEL come by way of private lenders such as banks and credit unions; however they are both subsidized and supported by the U.S. Department of Education. The FFEL student loans are required to be repaid to the private lender that made the loan (i.e. the financial institution that the student banks with) or to the designated agency.
There are two different kinds of student loans for both the Direct and the Federal programs. There are subsidized Stafford loans and unsubsidized ones. Let us take a look at each one of these now.
The subsidized ones are awarded to those students who qualify based on financial need. It is the information provided by the student on the Free Application for Federal Student Aid (FAFSA) that determines whether the individual qualifies for this loan or not. Visit the website to learn more about it. For this type of student loan the Federal government will pay the interest when the student is enrolled in school full or part-time and also for a grace period of up to six months after the student has stopped attending school.
The unsubsidized Stafford loan is also awarded on the basis of monetary need. To apply you must fill out the FAFSA first. In this case interest on the loan is charged from the time that it is disbursed and the interest continues until the loan is paid off in full. It is possible to defer interest payments while still attending university or college and/or during grace periods. However the downside to doing this is that the deferred interest will continue to build and will be added onto the principal of the student loan. As well the additional interest will be based upon the higher amount, as opposed to the lower amount.
There is more than one factor that determines a student’s eligibility for a Stafford loan. In order to qualify for any of the loans described here you must be enrolled in an educational program at a post-secondary institution. This program of study must be leading to a certificate, diploma or post-secondary degree of one type or another. You also must demonstrate that you have a need for financial assistance and that without it attending school may be outside of your reach. It is the financial aid administrator at the college or university that you plan to attend that will decide whether you meet all of the necessary criteria or not.
To qualify you must be a United States citizen or an eligible non-citizen. You also must have a valid Social Security Number. Please note that this does not apply if you are from the Republic of the Marshall Islands, the Republic of Palau or the Federated States of Micronesia.
You must have a high school diploma or a General Education Development (GED) certificate in order to be eligible for a student loan. You may also be required to meet other standards that are set down by the Board of Education in the state you graduated from high school in.
When applying for a student loan from the Federal government you must certify that you will only use the money for the purposes of your education. You must also certify that you do not presently owe money on a federal student loan or grant and are not in default of a student loan.
Once you have started school you are expected to maintain your grades and to maintain a high standard in terms of your academic progress. This is particularly important if your degree program will take you a number of years to complete and you will have to apply for new student loans on an annual basis.
Do not let a lack of money hold you back from pursuing your dreams of a career that requires a degree or a diploma from a post-secondary learning institution. Student loans are a source of financial assistance that can get you on the road to a better life! Explore your options. Below we have listed student loans sources and information to help you find the the student loans for your needs.