The Stafford Student Loan

A federal Stafford student loan is available for students who need financial aid in college. Because the student loan is guaranteed by the government, the funds will be covered should the student's loans go into default. Because the loan is dispersed from the government directly, the interest rates will be lower than if the student were to take out a private student loan. However, there are strict requirements, and a student will not be able to borrow as much money. The Stafford student loan is helpful for many students that are trying to pay their own way through college.

As with any student loans, the student is not required to pay back their student loans while enrolled in school. They have a grace period until 6 months after graduating to begin paying back their student loans. After this grace period, the student will have to begin making payments on their loans. The interest rate on the Stafford student loan will vary until it is time to begin repayment, at which time a student can choose to lock in their interest rate with a consolidation loan.

There are two types of Stafford student loans. A subsidized student loan is dispersed based on financial need. The interest accrued on this type of student loan is paid by the government until the student begins their loan repayment. On the other hand, there is the unsubsidized Stafford student loan, in which the interest is added onto the principal balance while the student is in school. This interest will have to be paid off by the student.