Stafford Student Loans

Written by Seth Cotterell
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A majority of students qualify for direct loans from the government. Direct loans are called direct because they go directly to students through their universities. The government sends money to the school, which then deducts tuition and fees. Whatever is left over is dispersed to students via direct deposit or check.

Direct loans, known as Stafford loans, come in two types. Practically all students can qualify for the first type. Interest on this type of loan begins to accumulate even while the student is still in college and this is called an unsubsidized loan. There is an increasing scale of unsubsidized Stafford loan amounts students qualify for each year. With each successful year of college completed, the amount a student can borrow increases.

The other type of Stafford loan is the subsidized loan. Interest on subsidized loans does not begin to accumulate until after the student graduates. During the time the student is enrolled as a full time student, the government assumes interest responsibility. While almost anyone qualifies for unsubsidized loans, only those with demonstrable financial need will be awarded subsidized loans.

Applying for Stafford Loans

Applying for Stafford loans is simple. All you have to do is submit a Free Application for Federal Student Aid, FAFSA, every year. Your eligibility is automatically determined and an award letter will be sent to you. You can choose to accept any portion or all of the Stafford loans that are offered to you or you can choose to decline if you have alternative means to pay tuition.

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