Home » Finance » Loans

Why Is A Stafford Student Loan Better

Dec 24, 2007
The executive director of the Project on Student Debt, Robert Shireman, was interviewed regarding the best strategy for students to use for financial-aid decisions regarding higher education. We will review his comments and advice regarding the Stafford Student Loan and others.

Go with the federal loans first, not only do federal loans carry a fixed interest rate, but they also are easy to apply for and offer flexible repayment terms and, in some cases, a government subsidy for part of the interest.

The number one government loan to aim for is the Perkins Loan. It offers students up to $4,000 a year at a fixed 5 percent rate. The feds pick up the tab on the interest until the loan comes due.

You don't have to shop for a lender to connect with a Perkins. These days they dole them out sparingly. The federal fund that supplies the loans isn't being replenished to the full amount. If you are offered a Perkins Loan waste not time it accepting it.

The next loan you should want to go with is the Stafford Loan. This loan is available to any student who applies for federal financial aid; it carries a fixed rate of 6.8 percent, compared with the recent prime rate of 8.25 percent.

Students may borrow up to $3,500 a year as freshmen, $4,500 as sophomores, and $5,500 as juniors and seniors. If your family qualifies for need-based aid, the federal government will pay the interest on the Stafford Loan until it becomes due.

Other wise, interest starts building on day one. Students can defer repayment until six months after graduations and extend repayment from the standard ten years to as many as 25, lowering the monthly amount (but adding to the overall cost of the loan).

Uncle Sam makes for a lenient lender, as long as you don't duck out on your obligation altogether. Borrowers who ask for forbearance can postpone payments for up to a year at a time and defer them if they return to school.

Stafford Loans offer subsidized and unsubsidized loans. What is terrific about a Stafford Loan financial aid package is you may be eligible for either one or a combination of both. The big difference between the two is when the interest begins to accrue.

The Plus Loan follows the Perkins and Stafford Loans from the government. After this you would have to look into private loans, which carry variable rates and tougher terms.

The government loans are by far the best if you are able to obtain one. You are able to combine a Stafford Loan with other available loans and they work with you in the installment, enrollment and repayment areas.
About the Author
Court provides borrowers with information on student loan consolidation and unsecured personal loans.
Rating:
Please Rate:
(Average: Not rated)
Views: 121
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Buying
    • Selling
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources