Since you have come to this page, you probably have heard about Stafford student loans, as they are one of the biggest federal loan lender programs around. They offer you the chance to go to college on their dime if you are unable to afford it, which is a great benefit, but are Stafford student loans worth it? Well below you will be given information on both types of loans that they offers as well as a list of both the pros and the cons when it comes to taking out Stafford student loans so you can decide for yourself whether to say yay or nay.
Stafford Student Loans – Two Different Types
SUBSIDIZED STAFFORD STUDENT LOANS
The first one we will talk about is the Subsidized Stafford loan. This Stafford student loan chargest absolutely no interest during the time where you are in school, which means that government picks up the bill, paying your interest for you. If this sounds to good to be true, well it kind of is as this loan program is solely based on the financial need of the applicant, meaning that not everyone will qualify, or those who need it most tend to get it first. Your eligbility is also determined by if you or your parents fall in to the correct tax bracket, and with the subdidized Stafford studetn loans, the school you are going to attend will determine how much you get in the form of grant money.
UNSUBSIDIZED STAFFORD STUDENT LOANS
If the above doesn’t quite suit what you are looking for, the other option is the unsubsidized Stafford student loans. The great thing about this program is that pretty much everyone is gauranteed to qualify for this option, but unlike the subsidized option, ubsubsidized Stafford student loans require that you pay interest right off the bat, or as soon as your loan is issued. This option can be great for people who dont qualify for the subsidized option, and can pretty much get the same benefits as subsidized option by paying just the interest payments while you are enrolled in school. That way when you get out of school, you are left with just the loan, and not the accumulated interst for the years that you were in college. The ammount of money you will receive is also decided by the school you wish to attend.
Stafford Student Loans – Pros & Cons
Now that you know some of the details of both the Subsidized and Unsbsidized Stafford student loans, there are overall pros and cons that come with choosing each one of them. Here are the pros and cons of Stafford student loans:
- They are not credit score based.
- Their loans are lended at a fixed rate which means no compounding interest, your rate will always stay the same. Current fixed rates between 2010 and 2013 are at 6.8 percent.
- They offer loan repayment or also know as loan forgiveness where you can work a public service job, or to the likes of it, and get the chance to get a lot of your debt forgiven, or deleted essentially at the end of your public service term. Usually this is whatever is left after 120 on time payments.
- When you go to pay back the loan, they offer you the freedom to tailor a payment schedule that fits what you can afford.
- Bankruptcy is not an option on Stafford student loans or any federal lender that you go through.
- Being that they are fixed rates, there also is a negative side of that, as if the median fixed rate drops, your rate will stay at what it is when you took out the loan.
- Government loans stay in your credit record forever, so you must make sure to make your Stafford student loan payments on time.
Stafford Student Loans – Conclusion
The last thing that you need to know is that you should leave about 2 months time before you need the grant in order to fill out the Stafford student loans paperwork, which there is a lot of it. Also, you will needed to fill out a FAFSA which means Free Application for Federal Student Aid, which is madatory for all applicants.