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HomeTopics...Funding EducationStafford Loans
Stafford Loans to Fund Your College EducationStafford loans are part of a federal program designed to help students in financial need pay for their college education. As the price of college tuition rises, more and more people are finding it increasingly difficult to pay for a higher education. Federal Stafford Loans help financially needy students pay for college by offering them loans with lower interest rates and a federal guarantee.
What is a Stafford Loan?A Stafford Loan is a loan offered to students attending any certified institute of higher education in the U.S.. Under Title IV of the Higher Education Act of 1965, students can receive federally guaranteed loans at a lower interest rate than may otherwise be available through private lending agencies. Stafford Loans are named in honor of the late Senator Robert Stafford of Vermont in recognition of his work on higher education in the United States.
The Stafford loan program allows undergraduate students to borrow up to $3500 during their freshman year, $4500 during their sophomore year, and up to $5500 for each additional year of college. There is an undergraduate cap of $23,000 cumulative benefit.
Qualifying postgraduate students are eligible to borrow up to $20,500 per year with a cumulative maximum of $65,500 for both undergraduate and postgraduate education.
Types of Stafford LoansFederal Stafford Loans come in two varieties:
Advantages of Stafford LoansHere are some of the advantages of Stafford loans versus loan programs from traditional lenders:
Keep in mind that borrowers must contact the Federal Direct Student Loan Program directly to determine their eligibility for loan forgiveness (the circumstances in which you aren’t responsible for repaying the loan).
Enrollment ProcessFederal Stafford Loans are available through two different programs. The Federal Direct Student Loan Program provides loans through the U.S. Department of Education directly to students or their parents. The Federal Family Education Loan Program offers loans to students through private institutions that are backed by a government guarantee against default. Loans from both of these programs carry the same deferment options and repayment programs.
Every student with hopes of getting a Stafford loan must complete the Free Application for Federal Student Aid (FAFSA). Filling out the FAFSA application is required regardless of income or need. Once the FAFSA is completed and submitted, the Department of Education will process the application and then submit a Student Aid Report to each of the schools the student is considering attending. Each school will then send a Financial Aid Award Letter to the student outlining any Grants, Loans or Work Study programs for which he is eligible. If the student is eligible for a Stafford Loan, he will complete a Master Promissory Note (a legally-binding promise of repayment) to receive disbursements.
In the period between 1958 and 1996, the average annual inflation rate for college tuition was 7.24 percent, outpacing general inflation by 2.75 percent. This gradual increase in the cost of higher education has made it more difficult for students from lower income families to achieve a post high school education. The Federal Stafford Loan Program is an important tool for assisting these students in their dream of earning a college degree. Do you have a program in mind?
Research different schools that offer any of the below programs with the links below. Associate's Programs
Bachelor's Programs
Master's Programs
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