Sunday, 18 September 2011

Federal Stafford Loan

Federal Stafford Loan
The Stafford Loan is a federal student loan offered to students in university or college to help finance their education. This loan can be either subsidized or unsubsidized depending on financial need. Subsidized Stafford loans usually have lower interest rates compared to unsubsidized loans. Not everyone can make use of the Stafford loan, and if you are planning to apply for one, make sure that you meet all eligibility requirements.

What are the eligibility requirements? 
To make use of Federal Stafford Loans, you must be a U.S. citizen or national, U.S. permanent resident or a citizen is not qualified for registration is approved or is studying at a school participating in the Family Federal Education Loan Program.
Must also be enrolled or intend to enroll at least half time, and are in need of financial aid (this will be verified by the school.) Other eligibility requirements is to complete the Free Application for Student Aid (FAFSA), which can be found at the official

What benefits can be obtained from the Stafford Loan?
One of the main reasons why the federal Stafford loan is so popular is because it offers low interest rates. For the school year covering 2010-2011, the loan rates are as low as 3.40%.
For subsidized loans are awarded based on financial need is not expected to repay the loan while you are enrolled as full-time student or part time. Deferment at school has a grace period of six months from the time they leave school if they withdrew, graduated or dropped below half time enrollment.
You can also have a higher debt limit, which can be up to $ 20,500 per year. The approval depends on the duration of their term in school and the status of your grade.

What are the interest rates? 
In the 2011-2012 school year, the subsidy rate is 3.4%, and the subsidy rate is 6.8%. The following year, 2012-2013, both rates will be subsidized and unsubsidized 6.8%. Current rates are effective 07/01/2011 until 06/30/2012 specifically.

How I can request and obtain the funds? 
The first step is to complete the FAFSA or Renewal FAFSA if you are a returnee. The form will be processed and your school will review the results and send an award letter to inform you of your eligibility. If you qualify, you can apply for federal Stafford loans by completing the form online at their official website.

After successful completion of the necessary documentation, the lender will distribute the funds directly to their school in two installments, in general, fall semesters and winter. Your loan money will cover tuition and school fees. If there are any remaining funds, the school or sending the money to your account or provide direct payment.

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