Federal Stafford Loan
Students in college are probably looking for a way to
pay for their student loans in which case they should
look into all of the different options available to
them. One of the types of loans you can look into is
called the Stafford loan. This is a Federal loan that
has recently been changed federally. How Federal
Stafford Loans works is that repayment begins six months
after the student ceases to carry at least one-half the
normal full-time academic workload. Repayment of
principal and interest on PLUS loans (which is a parent
loan) usually begins within sixty days of disbursement
of the last installment, repayment of a consolidation
loan begins within 60 days after the proceeds of the
loan have been used to discharge the liability of the
borrower on the loans selected for consolidation.
Deferments and forbearance of payment may be given for
some authorized periods.
Before you apply, it is important to know if you are
eligible or not. In order to receive a Stafford loan,
the applicant must be a U.S. citizen, national, or
person in the United States for other than a temporary
purpose. A student borrower must be enrolled or accepted
for enrollment in a degree or certificate program on at
least a half-time basis as an undergraduate, graduate,
or professional student at a participating postsecondary
school. An otherwise eligible student is eligible for
loans during a single twelve-month period in which the
student is enrolled in a non-degree/non-certificate
course of study that the school has determined is
necessary in order for the student to enroll in a
program leading to a degree or certificate.
Under the Direct PLUS program, parents may borrow for
dependent students. Direct Unsubsidized and
PLUS loans
are non-need based programs. In order to receive a
Direct Subsidized Loan, all borrowers must undergo a
financial need analysis to determine eligibility for
Federal interest. A student that is presently enrolled
at a participating institution must be maintaining
satisfactory academic progress in the course of study
that they are pursuing. The borrower may not owe a
refund on any Title IV grant or be in default on any
Title IV loan received for attendance at any school. The
borrower must also file a Statement of Registration
compliance. Borrowers that are unable to obtain
consolidation loans from lenders under FFEL or who are
unable to obtain a consolidation loan with income
sensitive repayment terms acceptable to the borrower
from a lender, are also eligible for a Direct
Consolidation Loan. Married couples may consolidate
eligible loans.
Additionally, the borrowers will need certification of
eligibility from the
school and could be required to
supply documentation in order to verify the accuracy of
data used in the Direct Subsidized loan need analysis.