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Designed by the federal government to assist people with the education payment, Stafford student loans are widely appreciated across the United States. You can get access to such a program if you bring proof of low income. The payment deferment options, the low interest rate and the chance to consolidate education loans represent the main advantages of Stafford student loans.

There are nevertheless limitations to this kind of loan and they are  first and foremost noticed in the amount of money provided. You won't be able to pay for your education from the loan alone and you'll need to find ways to supplement funds.

In order to qualify for Stafford student loans you must first fill in a FAFSA which is an application form that also allows you access to all sorts of scholarship and federal grants. This additional sums of money could in fact provide the alternative financing sources when you lack the means to pay out of the pocket. The repayment for the Stafford student loans starts six months after graduation or school withdrawal. The education period during which no payment is required is usually referred to as the grace period.

Stafford student loans can be classified in two categories: subsidized and unsubsidized. Starting from demonstrated financial need, the government pays for the interest rates while you are studying. In the case of unsubsidized Stafford student loans, the interest rate corresponding to the years of study, accrues and capitalizes to the initial debt. Most loans have the rate set at 6.8% which is considered a fixed value for most loan providers in this federal government system. Even lower rates are possible with some other programs.

Perkins loans have a 5% interest rate and they are considered more advantageous than Stafford student loans. Nevertheless, we need to stress out once more that both these types of federal government loans are not enough to cover all the educational expenses particularly if we think of the number of degrees one may want to take: BA, MA and PhD. Therefore, you'll have to finance your studies out of the pocket, from personal savings or study-work solutions. Some families go as far as making home equity loans when their children do not qualify for Stafford student loans.

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Tags: bank, Finance, Loans, money, student_loans