Direct Stafford Loans

Direct Stafford Loans

The Direct Stafford loan is named after a republican senator from Vermont, who is known for his great works on higher education reform and this loan is a kind of financial aid granted from the United States government to those students, who show demonstrated financial need and. As every loan, it surely has its benefits, but also its disadvantages. Let’s revise all these, in order to decide wisely about this kind of loans.

The benefits

– You have a fixed, comparatively low interest rate

– Because of this, you don’t have to worry about suddenly spiking of the annual percentage rate due to the economy. – If you are respecting the payments, you won’t need to worry about sudden changes of amount interests The costs There are direct subsidized loans, which:

– have low interest, new loans currently at 4.5% fixed for 2010-2011

-interest does not accrue while you are in school

And there are direct unsubsidized loans, which:

– have higher interest than the subsidized loans; while the subsidized loan has 4.5% fixed, the unsubsidized loan has now 6.8% fixed for 2010-2011

– interest accrues while you are in school but also after you graduate

What to do? Firstly you fill out your FAFSA application and be sure to list your school’s federal code. Then you will receive a Student Aid Report within 2-3 weeks listing the financial aid for which you qualify, once the department of education receives the information from the FAFSA application.

Do not forget that not every school participates in the Direct loan program, so ask in time in order to have the right information!

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