What types of Stafford loans are there?
There are two types of Stafford Loans or Direct Stafford Loans.
1. Direct Sponsored Loans:
These undergraduate loans are only for students with financial needs.
The Department of Education pays the interest while:
(a) you are at least halfway through school;
(b) You are in the grace period (first 6 months after graduation). and you are in deferment
(you have decided to defer repayment of the loan).
For this reason, it is in your best interest if you are eligible to receive “subsidized” loans before taking out other loans.
2. Direct Unsubsidized Loans:
These loans are available to undergraduate, graduate, and professional students,
and there is no need to demonstrate financial need. Unlike “subsidized” loans,
you have to pay the interest on unsubsidized loans even if you’re in school, on the grace period, or on deferral.
Because interest accrues, you should pay interest if you can afford it during these periods.
If this is not possible, the accrued interest will be added to your principal and you will have to repay a higher total amount.
While the Department of Education is the lender, these loans are serviced by nine
loan service organizations/companies designed to help the government manage to bill
and other services related to your loan, such as FedLoan Servicing.
You might have more than one customer service representative if you have multiple state student loans.
2. Are you eligible for Stafford loans?
In order to apply for the subsidized loan, you must meet every 3 years. The first year is called the following requirements :
The first name, you must demonstrate financial need,
which will be assessed using the data you provide for Free Application for Federal Scholarship Aid (FAFSA).
Second, you must be a US citizen or a US citizen, OR fall under one of the following categories of eligible non-citizens who have:
- A green card;
- A Form I-94, Records of Arrival and Departure, with “Refugee,” “Asylum Granted,” “Cuban-Haitian Participant,”“Conditional Participant” (valid if issued before April 1, 1980), or “Parolee”;
- A beaten immigrant status or is the child of a person with a beaten immigrant status; or
- A T-Visa (for victims of human trafficking).
Third, You must have a valid Social Security Number,
unless you are a citizen of the Freely Associated Pacific States (the Marshall Islands,
the States of Micronesia, and the Republic of Palau).
Fourth, if you are between 18 and 25 male, you must be registered with the Selective Service.
Fifth Must be enrolled in an eligible degree/certificate m. Contact your school’s financial aid department to confirm eligibility.
Sixth, you must be at least half enrolled.
Seventh, in order to achieve Satisfactory Academic Progress (SAP ), you must maintain a specified grade point average (GPA),
take a minimum number of credit hours per semester, and stay on track to complete
your degree in an acceptable amount of time.
The SAP standards differ from school to school.
So speak to your school’s tax office to find out what to expect.
Eighth Must certify to FAFSA that
(1) you have no federal credit and no money for a federal scholarship, and
(2) you are using the federal school aids for educational purposes only.
Ninth Must have a high school diploma, GED, approved homeschool education,
or an appropriate career path program. Contact your school’s tax office to find out
if your school offers an appropriate career path program.
The requirements for “ unsubsidized ” loans are the same, except you don’t have to show “financial need.”
If you received Direct Stafford credit, you remain eligible for as long as you need the credit.
If you lose permission, you can take steps to regain it
3. How to Apply for Direct Stafford Loans?
To apply for either Stafford loan, you must complete the FAFSA form.
The FAFSA, which is free to fill out and submit, is used by current and
prospective colleges to determine a student’s eligibility for various forms of financial aid.
Completing the FAFSA can be a lengthy process that requires financial and other information,
start early and get it as soon as possible.
The open date is October 1 each year, so you have plenty of time to complete it before the June 30 federal date.