Stafford loans or direct federal student loans are granted by the federal US government these loans are granted to help out students who are inundated under educational loans. These direct federal loans are really very helpful and suitable for needy college students. There are no hard and fast rule to take advantage from these direct federal loans. Simple guidelines for loan, attractive and favorable interest rates and easy repayment choices, all these make direct federal loans best choice among all the available student loans.
Stafford Loans Types
These Stafford loans are further divided into two types. One type is called as the Federal Family Education Lending Program (FFELP) offers money lending options from private lenders that include banks and credit unions. There is a guarantee from the government about these direct federal loans in case of default. The second type is called as the Federal Direct Student Lending Program (FDSLP) that offers direct lending of money from federal government to the students and their parents. There are two conditions for this second type of loan that is whether the interest is paid by the government on the behalf of student during the academic period of the student or in the other condition students can pay off all the interest after or before completing their education.
Stafford Loans Limits
All students can take advantage from unsubsidized loans terms and all students qualify for it. The borrowing amount is depend on the years of their schooling such as student who are in first year can lend up to $2,625, in their second year they can lend up to $3,500 and in the remaining years their limit increased to $5,500. However, option of taking advantage from both subsidized and unsubsidized condition is available for all students and they can avail these two conditions at the same time. In reality lots of students apply for both conditions at the same time and can get maximum money. Direct federal student loans limit for the graduate students is very high such as up to $18,500($8,500 of which is subsidized).
In order to get advantage from these loans student must file their application for Federal Student Aid (FAFSA) this filing of application is free. There are no financial history requirements for Stafford loans to be approved by the government. Application form can be taken from the online site or from the financial aid office of the college. Rates are not varying among the different lenders for direct federal government loans and these rates are set at 8.25%. But it’s better and wise to search a little because there are several lenders that are providing little discount on the agreement to borrowers for switching to automatic online payments. There are various other programs available such as supplemental, private lending programs by the financial institutions, credit unions and banks etc.
Student life may be proved as an eye opening and lesson teaching that can prepare you to plan something for future. Stafford loans are the best option to manage tuition fees wisely and applicant can ask the financial aid officer of the college, accountant or a tax adviser incase they have any question.
