Whether they still have time before their school’s fall financial aid deadline or they’re looking ahead to their tuition bills for the spring semester coming up, undergraduates searching for ways to meet their college expenses themselves could find some of the financing help they need with Federal Stafford Loans from NextStudent, a leading Phoenix-based education funding company.
What Is a Stafford Loan?
Stafford loans are low-interest, federally guaranteed student loans available to both undergraduate and graduate students for tuition and other school-related expenses. Stafford loans can be either need-based or non–need-based.
Federal Stafford Loans are typically repaid over 10 years (although borrowers can extend their repayment term by consolidating their Stafford loans). Stafford borrowers can choose from different repayment plans—extended, graduated, income-sensitive—that can help make monthly payments more affordable once repayment begins.
What’s the Difference Between a Subsidized and an Unsubsidized Stafford Loan?
Subsidized Stafford loans are awarded on the basis of financial need. With a subsidized student loan, any interest that accrues while the borrower is in school, in deferment, or in a grace period, is paid by the government.
Unsubsidized Stafford loans are non–need-based, so eligible students can qualify for unsubsidized Stafford aid regardless of their own income or their parents’ income. With an unsubsidized student loan, even though the borrower may not be making payments (while (s)he is in school, in deferment, or in a grace period), interest is accruing, and the borrower will be responsible for paying that interest once repayment begins.
What Are the Advantages of an Undergraduate Stafford Loan?
Federal Stafford Loans feature several benefits for undergraduate borrowers:
* No prepayment penalties: Borrowers may pay off a Stafford loan early without being assessed any additional charges.
* Fixed interest rate: Stafford loans taken out after July 1, 2006, have a fixed interest rate of 6.8%.
* No payments while in school: Students holding Federal Stafford Loans may choose to defer making payments until they’ve finished school or dropped below half-time enrollment.
* Forbearance and hardship deferment benefits: If they’re having trouble making their monthly payments, Stafford borrowers may request to temporarily postpone making payments without affecting their credit rating.
* Grace period before repayment: Stafford borrowers who are graduating or dropping below half-time enrollment have a six-month grace period before they need to begin making payments.
* Consolidation benefits: Once they’ve left school or dropped below half-time status, college students may consolidate their Stafford loan(s) and take advantage of all the features of a federal student loan consolidation, which include longer terms that give borrowers more time to repay.
Who Is Eligible for an Undergraduate Stafford Loan From NextStudent?
To qualify for a Federal Stafford Loan from NextStudent, undergraduates:
* Must hold a high school diploma or GED
* Must file a FAFSA (Free Application for Federal Student Aid)
* Must be enrolled or accepted as at least a half-time student in an eligible undergraduate program
* Must maintain satisfactory academic progress, as determined by the school
* Must be a U.S. citizen or permanent resident
* May not be in default on any federal loan
* Must be registered with the Selective Service if male and between the ages of 18 and 25
How Much Money Is Available From Undergraduate Stafford Loans?
Eligible undergraduates qualify for different Stafford loan amounts, depending on their year in school and whether they’re classified as dependent or independent undergraduate students.
A dependent undergraduate student is:
* Under 24
* Single, with no dependents
* Not a ward of the court, a military veteran, or in the military
Dependent undergraduates taking out a Federal Stafford Loan can borrow up to $3,500 their first year of school, up to $4,500 their second year, and up to $5,500 each year after that, up to a maximum of $23,000 in cumulative Stafford loan debt over their college career.
Independent undergraduates taking out a Federal Stafford Loan can borrow up to $7,500 their first year, up to $8,500 their second year, and up to $10,500 each year after that, up to a maximum of $46,000 in total Stafford loan debt.
When undergraduate students have outstanding tuition bills and education-related expenses to meet, NextStudent could help with a Federal Stafford Loan. Given to undergraduates in their own name and awarded both with and without consideration of financial need, Stafford loans from NextStudent offer eligible undergraduates a self-help financing option that’s available to them regardless of how much money they or their parents make. And with in-school deferment benefits, Stafford loans allow undergraduates to pay their college expenses without worrying about repayment while they’re in school.
NextStudent believes that getting an education is the best investment you can make, and we are dedicated to helping you pursue your education dreams by making college funding simple. Learn more about Student Loans, Private Student Loans and Student Loan Consolidation.
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