College Student Loan News and Info

Utilizing the Stafford loan

By: student-loans.net

Using a Stafford loan to flesh out your total financial aid package for college is a great way to help secure additional funding while at the same time minimizing the amount of money you will have to eventually pay back. Unlike private loans the Stafford loan is issued by a lender through the federal government and therefore it is subject to very attractive terms and conditions that make the Stafford loan quite good.

The Stafford loan actually comes in two different flavors, subsidized and unsubsidized. With a subsidized Stafford loan the government will pay your interest on the loan will you are still in school therefore after graduation you will only have to pay the actual principal amount of your loan plus any interest you accrue after graduating. With an unsubsidized Stafford loan you will have to pay off interest accumulated while you were in school; however an unsubsidized loan still has very low interest rates making the unsubsidized staffer loaned a good deal.

Whether or not you receive a subsidized or unsubsidized Stafford loan depends upon the amount of money your family makes and whether or not the government deems you in enough financial need. In this way the Stafford loan can be a little bit unfair because even if your family makes enough money there is no guarantee that they will be helping you pay for your education however the Stafford loan does not look at this type of information. Even if you are getting the short end of the Stafford loan stick, and your family is not helping you pay for college, you’ll still find the Stafford to be a great way to pay for some of your expenses.

Unfortunately the Stafford loan does not offer enough money to pay for your entire education; for this reason the Stafford must be used in conjunction with other loans as part of an entire financial aid package that you will use to pay for your education and education related expenses. Under no circumstances should you turn down a Stafford loan as part of your financial aid package. That is of course unless you don’t need the money for college. It is unlikely that you will ever find a loan better than the Stafford loan in terms of interest rates and repayment options. This is not mean that you shouldn’t still look around, especially if you need more money than the Stafford loan offers; however under nearly all circumstances the Stafford loan will offer you the best rates available. Alternative student loans do offer competitive interest rates, as well as more flexibility, but could end up costing you more money in interest in long run. Be sure to carefully review all terms and conditions and interest rates and fees schedule for any loan before you decide on borrowing.

This entry was posted on Saturday, January 26th, 2008 at 10:19 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.