Stafford Loan
The Federal Stafford Loan program enables students to borrow money at a
low interest rate to help meet educational expenses. Banks, credit unions,
savings and loan associations, and other lenders participate in the Federal
Stafford program. To be eligible to apply, a student must be a United States
citizen or a permanent resident; enrolled or admitted as a matriculated student
on at least a half-time basis; and in good academic standing. The maximum for
this loan program is $20,500 per year in subsidized and unsubsidized loans
combined. The maximum aggregate amount of all federal student loans is
$138,500, which includes all undergraduate and graduate debt.
Subsidized Federal Stafford Loan
Students who borrow a need-based Federal Stafford Loan benefit from the federal
government's paying the interest while they are in school or in deferment.
Need-based loans are called Subsidized Federal Stafford Loans because the
government is subsidizing or supporting these loans until their repayment
begins. The maximum subsidized loan amount is $8,500.00 per year. Interest rate
is fixed at 6.8%
Unsubsidized Federal Stafford Loan
Students who do not qualify for Subsidized Federal Stafford Loans can obtain
unsubsidized ones. The main difference is that the government does not pay the
interest; students must pay it themselves through monthly or quarterly payments
or by allowing the lender to add the interest to the principal of the loan if a
payment is missed. Students may borrow up to the amount of $25,000 minus other
financial aid and subsidized loans.
Grad Plus
Students may be eligible to borrow Graduate Plus Loans up to the cost of
attendance (less other aid). The Graduate Plus loan has a fixed interest rate
of 8.5%. Applications for Graduate Plus Loans must be made directly with the
lender, of your choice. Apply online to insure timely processing of loan
applications.
In order to be eligible for a Graduate Plus Loan, the borrower cannot have an
adverse credit history. This is defined as being 90 days or more delinquent on
any debt, or having a credit report that shows default, discharge, foreclosure,
repossession, tax lien, wage garnishment, or write-off of a Title IV debt
during the five years preceding the date of the credit report). Graduate Plus
Loans do not use any kind of debt to income ratio or FICO score, unlike private
education loans. Presently, there is no set aggregate limit on the Graduate
Plus Loan. Some lenders have a credit repair program or a "second look"
process, which may help borrowers secure the Grad Plus loans after credit
issues have been resolved or satisfied.
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