Stafford Loan Overview

A Federal Stafford loan is one of the most common and affordable ways for many students to pay for college education costs.

There are a number of strong benefits associated with the Stafford Loan. These benefits include:

• Fixed interest rate
• No payments while enrolled in school at least half-time
• No payments for six month after you graduate or leave school
• Ability to apply online to receive funds faster
• Flexible repayment options
• No credit check required
• No prepayment penalty

In addition several flexible repayment options provide convenience to student borrowers. With a standard repayment option you can make both principal and interest payments on a monthly basis for up to a 10 year repayment period with low interest. A graduated repayment option allows you to make reduced payment in the first years of the repayment period with increasing payments after that period. The loan can still be paid off in a 10 year period. This type of repayment option does have a higher loan cost than the standard repayment plan.

Under the income sensitive repayment plan, the payments are based on a percentage of your gross income. To remain eligible for this repayment plan, you must reapply every year. Payments are adjusted each year to reflect any changes in income.

The extended repayment plan provides up to a 25 year repayment term. The student can choose either a standard or graduated payment option. You also have the option of consolidating loans into a new loan for a single monthly payment with a fixed interest rate.

It is important to note you must meet certain eligibility guidelines in order to receive a Federal Stafford loan. These guidelines include:

• Submission of a FAFSA or Free Application for Federal Student Aid
• Must be a U.S. citizen or national, an eligible non-citizen or U.S. permanent resident
• Must be enrolled or plan to enroll at least half-time
• Must not be in default on any education loan
• Must be accepted for enrollment or attending a school that participates in the Federal Family Education Loan Program

There are two different types of Stafford Loans. They are subsidized and unsubsidized. It is important to note there are some differences between these two types of loans. The two major differences between the two types of Stafford loans are a subsidized Stafford loan is need based and the student is not responsible for the interest that accrues on the loan while they are in school or during the six month grace period. With the unsubsidized Stafford loan, the loan is not need based and the government does not pay the interest that accrues on the loan.

Students considering the Stafford loan should understand there are loan limits based on whether they are dependent or independent and their college classification.

Stafford Loan Limits

Dependent Students

Freshman - $2,625

Sophomore - $3,500

Junior or Senior - $5,500

Independent Students

Freshman - $6,625

Sophomore - $7,500

Junior or Senior - $10,500

Graduate or Professional - $18,500

For loan purposes, an independent student is defined as a person who meets at least one of the following categories:

• Born before January 1, 1982
• Working on a master's or doctorate program
• Married
• Have children who receive more than half of their support from the student
• Have dependents other than spouse or children who live with the student and receive more than half of their support from the student
• Both parents are deceased
• Ward or dependent of the court
• Veteran of the U.S. Armed Forces

Studentloans.info is ready to help you get started with your loan options. Whether you are a parent looking for loan info for your child or you are student looking for ways to finance your college education, we can connect you with reliable lenders able to assist you with various financing options.