Stafford Loans for College

College has become increasingly more expensive through the years and is projected to continue increasing by about seven percent every year. Parents may have a lot of questions regarding college costs and student loans. The main question on almost everyone’s mind is probably how they will manage to afford a quality education for their children. Here we will discuss Stafford Loans for college.
The first benefit of a Stafford Loan is that you don’t have to make any payments until after graduation. There is a low fixed interest rate on Stafford Loans and different payment plans are available.
The first thing you need to do when considering a Stafford Loan is to fill out a Free Application for Federal Student Aid (FAFSA) form. This form can be filled out online or on paper. Either the parents or the student should fill it out every year that you expect to need financial aid. This form will determine your eligibility for student aid from the government. Schools use the same form to determine if they will award financial aid separately from the government.
When your eligibility is determined, you may be surprised to know that your income isn’t the only thing taken into consideration. The size of your family, whether or not other children are currently enrolled in college, your assets beyond your retirement accounts and your income are all carefully considered. Then the examiner will enter your information into a formula that calculates your expected family contribution. These factors are all considered when approving you for a Stafford Loan amount.
You’ll receive a Student Aid Report (SAR) in the mail after you complete the FAFSA. The SAR will explain the FAFSA application findings. Check it carefully for mistakes or omissions. The findings will be transmitted by electronic means on a form called the ISIR to the colleges that were selected on the FAFSA. State agencies will receive copies as well and determine if you are eligible for a state awarded financial aid amount.
Next you’ll receive financial aid award letters from the schools you selected on the FAFSA. The letters will outline what you are eligible for from each school and how you can receive the money. Fill out the section of the award letter stating what you’ll accept and return it to the school of your choice.
Next you’ll apply for a promissory note, which you can do online or on paper from your school. Printing, signing and returning the promissory note to the specified address are essential to completing the process. Once the promissory note is received by the lending company, they will send the money to the school. The school will apply the money to the cost of tuition. You can let the school know if you would like to receive any leftover funds in the form of a check or if you would like for the extra money to be applied back to the loan.
Remember that you don’t necessarily need to be a low-income family to qualify for a Stafford Loan. Applying for a Stafford Loan is advised before you apply for other types of student or parent loans. If you still have more questions, you can research the Stafford Loan process online at www.student-loans.net or contact the school of your choice directly.

About the Author: Evelyn Saunders, a retired teacher, is the editor for student-loans.net, a provider of student loans and information on how to get private student loans as well as consolidation. For more information, please visit http://www.student-loans.net.

How Credit Scores Affect Students

Being a student can be a taxing financial struggle at times, and you may run into a situation where you’ll need to get student loans. Student loans can be great tools for getting you through tough times, but it is very important to take these loans seriously and pay them off on time.
Students can sometimes be careless about paying off loans because they aren’t necessarily educated about the ramifications of making a late payment or only minimum payments. You may believe that the late payment penalty fee is the only bad part of making a payment late, but you couldn’t be more wrong. Late payments do generally carry a hefty fee, but they also flag you as a person who doesn’t manage their finances very well or very responsibly. You interest rate can immediately go up to an astounding rate and you’ll have more and more trouble making that payment. This can lead to years of debt that is almost impossible to pay off. Worse yet, you will be paying more and more interest, maybe for years, and that one time little loan becomes a total that you never would have agreed to borrow in the first place.
Only paying the minimum amount due can stretch out a loan for years, but making a late payment will hurt your credit. Most students are young and have been protected under their parents’ umbrella before now. Now, you’re starting to get student loans and credit cards on your own and you need to know the facts before you make any mistakes that can haunt you for years. Making even one late payment can put a blemish on your credit rating for years to come. Your credit score may not seem too important to you now, but it will, and very soon. When you get ready to finance a car, that one late payment you made back in college can make your interest rate go up enough to cost you every month for the length of the loan. You will most likely be required to put more money down to purchase the car.
When you buy a house, it will be the same story. You may not qualify for the best rates, regardless of your income. Even a fraction of a percent can cost you hundreds or thousands of dollars every year for up to thirty years. It could be even longer if the higher payments strap you enough that you end up refinancing and extending the loan.
Be organized and practice sticking to a budget. Make any student loan payments that you have on time, preferably before the due date, and pay more than the minimum every time. Pay off debt as quickly as possible and make sacrifices to do so. Keep your credit score as high as possible by having a checking and a savings account, take out as few student loans as possible and never ever make a late payment. Stay on track and you’ll have a happy secure financial future ahead of you.

About the Author: Evelyn Saunders, a retired teacher, is the editor for student-loans.net, a provider of student loans and information on how to get private student loans as well as consolidation. For more information, please visit http://www.student-loans.net.