The expenses due to education cannot be met with without the support of education loans from the federal government or private lenders for most of the students. It is the financial support from the federal government that is highly supportive to the students in pursuing higher education. The purpose of all the student loans is to help the students study without bothering about the expenses. However, the features of the loans vary and it is necessary to understand each of the offers clearly. Each of the student loans is schemed to support the needs of specific groups of applicants.
Features of Stafford loans
The terms and conditions of each of the student loans should be thoroughly studied. Unless you understand the offers, you will find it difficult to make the choice. The offer that you choose should fit your needs and your ability to repay. Your expenses could be planned as per the offer that you become eligible for. The basic categories of student loans are federal loans and loans from private organizations. The federal loans are much preferred due to flexible loan terms and lower interest rates. Stafford loans, Perkins loans and PLUS loans are some of the common student loans offered by the federal government to support the education of the students.
Stafford loans can be obtained by filling out the Free Application for Federal Student Aid (FAFSA). It should be ensured that the school you attend should certify your registration, and the cost of the education incurred should be documented with authentication. Generally, the schools review the students’ profiles to understand their eligibility for Pell Grant before the Stafford Loan amount for a particular student is announced. Based on the amount you receive through Pell Grant, the Stafford loan amount might be fixed. Once the Stafford loan application is forwarded and approved by the okaycreditloan’s lender, the loan amount is disbursed to you through the school.
You are required to sign a promissory note before you receive the loan amount. It should be agreed that you pay back the entire loan amount that you borrow. You are charged a fee which is taken from the loan amount before you receive it. The payments depend on the academic calendar. You are paid either three times a year if you attend the school on quarter system or you are paid twice a year if you attend a semester system. For some of the students, the disbursements of Stafford loan may be made in monthly or weekly installments. However, the payments are not more than one half of the amount at any time.
The undergraduate students in their first academic year need to wait for thirty days after the school starts to get the first installment of the loan if they are the first time loan borrowers. The same specification is applicable to the students with default records. It is suggested that you contact the financial aid department to know when you will be receiving the loan amount. You need to seek some sort of financial support to cover your education expenses till the loan amount is disbursed to you. Emergency loans are offered to students to support them until they get financial support. These loans are offered without interest.
The rates of interest on Stafford loans do not exceed a specified maximum. The organization through which your loan is disbursed will keep you updated with changes. You can also contact the lender to know the current interest rate. The payment terms are very flexible. There are subsidized loans obtaining which the federal government supports by paying interest till the borrowers leave their school. The unsubsidized loans accrue interest while the borrowers are in school and also if the repayments are deferred. The loan term is generally five to ten years depending on the size of the loan. With lower interest rates and flexible repayment terms the Stafford Loans are in great demand among the students to pursue higher education.