FEDERAL STAFFORD LOAN A Stafford Loan is a student loan offered to eligible students enrolled in American institutions of higher education to help finance their education. The terms of the loans are described in Title IV of the Higher Education Act of 1965 (with subsequent amendments), which guarantees repayment to the lender if a student defaults.
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Federal Stafford Loan
Some facts about Federal Stafford Student Loan
These loans are guaranteed by the full faith of US government, hence offered at lower interest rate than a private loan.
Strict eligibility requirements and borrwing limits on stafford loans
No repayment while the student is enrolled as atleast half time student, also known as in-school deferment.
This in-school deferment or repayment continues for six months after student leaves the school, also known as Grace Period.
Subsidized loans are offered to students based on demonstrated financial need. The interest on Subsidized loans is paid by the federal government while the student is in school, during the grace period, and during authorized deferment.
In case of Unsubsidized Stafford loans, students are responsible for all the interest that accrue while enrolled in the school. The interest may be deferred throughout enrollment and unpaid interest is added to loan principal when student leaves the school.
Students applying for a Stafford loan must first complete a FAFSA (Free application for federal student aid). Stafford loans are available to students either directly from the United States Department of Education through the Federal Direct Student Loan Program (FDSLP, also known as Direct) or from a private lender through the Federal Family Education Loan Program (FFELP).
