Do you want to apply for a Federal Stafford Loan? Well, there are two sorts of Federal Stafford Loans for students. The two types of available in the so-called Federal Stafford Loan Program are the FFELP (Federal Family Education Loan Program) and the FDSLP (Federal Direct Student Loan Program.
There are schools that offer both of the programs but they don’t need to do that. Both of the programs have identical eligibility requirements but there are slight differences regarding repayment of the loans.
There are two different types of these Federal Stafford Loans:
Subsidized Stafford Loan. A Subsidized Stafford Loan gives students the opportunity to be eligible for a college loan at a low interest rate without the need to pay the interest on the loan until 6 months after finishing school (for than half 50 percent).
Unsubsidized Stafford Loan. An Unsubsidized Stafford Loan is similar to the subsidized Stafford Loan except that students already need to pay interest while still in college or loan interest will accrue while being in school. In that case, repayment is deferred until 6 months after students are no longer enrolled in the school (for more than 50% of the time).
To see if a student qualifies for one of the two Federal Stafford loan types, they first need to submit a FAFSA (Free Application for Federal Student Aid).
After they have reviewed the FAFSA and have made a preliminary assessment, the schools tell the students for which options they qualify. When you cannot avoid student debt and if you qualify for a Federal Stafford Loan, the Federal Department of Education will lend the funds directly to the educational institution that will provide the loan.
IWhen your school is participating in the FFELP (Federal Family Education Loan Program), they will probably suggest considering the lending institution they prefer. You don’t need to follow their advice and take the loan from their preferred lenders and you, the student, has the liberty to choose the lender for your Federal Stafford Loan.
Here are a few some points of consideration to determine a Federal Stafford Loan provider:
- Do the lenders handle all of the available student loan types?
- How about interest rates and some other terms of their provided loans?
- Is there an easy process of loan application – can you apply for a loan online?
- Is the repayment plan simple or have they made it complex?
- Is there a good customer service department to get the information you require?
Both types of these Federal Stafford Loans require you to submit an MPN (Master Promissory Note. Herein, you acknowledge that you accept and understand the conditions of the agreement for a loan and the borrowed amount as well as for the applicable terms and conditions. See also this post about Graduate School Scholarships when you’ve completed your Master’s degree and are thinking about continuing your education.