Back in 1965 the Congress launched the Federal Family Education Loan Program (FFELP) to provide financial support for students. An element of this program is the Stafford loan was originally designed only to assist students in financial difficulty, but really now more than 90% of all education lending from the federal government.
Stafford loans over time has changed with changing conditions and today there are two main types of> Loans – subsidized and unsubsidized.
In the case of subsidized loans the government to take responsibility for the payment of accrued interest on a loan from the date the loan is made until the student must begin repayment. Usually a student does not pay when he was enrolled in a research program is classified as a major program "part time" has, and for a grace maximum period of six months after the end of their course. However, students can begin to make a payment at an earlier date if he wants to.
As subsidized interest rates, loans are usually awarded on the basis of need and senior officials from both a student and their family income to determine whether or not students for a subsidized loan. Stafford Student Eligible candidates should complete a Free Application for Federal> Student Aid (FAFSA) application form, including details on income and each student will be issued a number of families is called the expected contribution (EFC) calculated from data on expected income.
About two-thirds of all subsidized Stafford loans are granted to students whose parents have adjusted gross incomes under $ 50,000 per year. One part is offered to families in a 50-100000 per year. However at this timemeaning of "need" becomes a bit translucent and slightly less than one tenth of the loan assistance is granted to students whose family income from the combination of more than $ 100,000.
In the case of those students who do not qualify for a loan can enjoy the most benefits of subsidized Stafford loan. The main difference here is that students will be required to meet interest payments on the loan, but again no paymentusually begin until six months after the end of the program students learn.
Unsubsidized Stafford loan can be very expensive as the interest accrued during the study and therefore the amount of capital and the final payment will also increase. Consider a simple example.
Suppose a student who borrowed a total of $ 5,000 the first year and the interest rate is 6.8%. interest rates at year endaccumulation was $ 340 and will be added to the loan. The students next year, then $ 5340 will bear interest at 6.8% which comes with some $ 363 bringing the total debt in two years to 5703 $. This example is not quite true that the interest is calculated monthly increase, but it still shows the principles of the loans.
Depending on the amount borrowed and the repayment period begins annual before it can besee that a student may pay the price very reasonable to delay repayment of Stafford loans.
Although this seems expensive, it should be noted that many alternative methods for meeting the cost of college is expensive and many more students can afford to go to college without a loan Stafford.
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This entry was posted on Saturday, October 2nd, 2010 at 6:10 am and is filed under The Student Loan Articles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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