If you are an undergraduate, a graduate, or a professional exam student then you may be eligible for a Federal Stafford Loan. Unlike a grant, a loan has to be repaid and interest will be charged on the loan amount. These are different from guaranteed payday loan
What are Federal Stafford Loans and how do they work?
There are two Federal Stafford Loans programs –
- Direct Stafford Loans where the lender is the Department of Education. These loans are repayable between 10 and 30 years.
- Family Federal Education Loan (FFEL) Stafford Loans where the lender is a bank or other institution. These are repayable between 10 and 25 years
To be eligible for Federal Stafford Loans you must be studying at least half-time. The amount you get will depend on your school grades and whether you are a dependent. You do not have to demonstrate financial need however. Your loan will be disbursed by your college in no less than two payments. (There is a fee of up to 4% of the amount you borrow, so you will receive a little less than your full Federal Stafford Loan)
How do I repay a Federal Stafford Loan?
You will sign a legally binding agreement called a promissory note. This will detail your repayment schedule and tell you how interest is calculated. You repay your Federal Stafford Loan over some years after graduation.
How do I apply for Federal Stafford Loans?
As with most student financial aid, you start by filling in a Free Application for Federal Student Aid (FAFSA) form, which you can do online. Do this as soon as possible to maximize your chances. A few weeks later you will receive your Student Aid Report (SAR). You receive an award letter telling you your loan amount and other details. You should then apply for your promissory note which you need to sign and file.