Facts About Federal Stafford Loans

Federal Stafford loans are beneficial to students because they are directly dispersed from the government. This cuts the process of getting student loans in half, by eliminating the middle man. Essentially, you are saving money as well since you do not have to pay any service charges or other fees that some student loan companies tend to charge. There are several types of federal Stafford loans that you can qualify for. Depending on which one, there are different terms and responsibilities to consider.

Subsidized federal Stafford loans are beneficial in the long run because you do not have to pay the interest on the loans while you are in school. The government pays the interest off. This loan is generally given to students that need more financial assistance for schooling. There are several programs that families can join to help pay off the student loans. There is a whole other application process that you have to go through to qualify for these federal Stafford loans.

An unsubsidized Stafford loan is similar to the subsidized loan in that it is given directly from the government, but there are some differences that distinguish them. For example, the interest collected on these federal Stafford loans is not paid off by the government while the student is in school. The student is required to pay off the interest with the rest of the loan balance.