Do I Need a Stafford Loan?

Do I Need a Stafford Loan?

by Evelyn Saunders

College can cost more than most parents prepare for. The cost of college has been steadily on the rise for many years. Most experts agree that college costs will continue to increase unless something drastic happens. Historically, college expenses and tuition has risen about seven percent a year and it is expected to continue to do so. This has many people turning to student loans for help. One type of loan, which we will discuss here, is called a Stafford Loan.
Stafford Loans are student loans configured in a way that allows you to defer your payments until after you graduate. There are multiple payment plans to choose from and the interest rates are considerably lower than other types of loans.

When trying to qualify for a Stafford Loan, your income will be considered. In addition, the number of people in your family, other children enrolled in college, your assets and your retirement accounts will also be taken into consideration. All of these things will be put into a formula which will estimate the amount that your family will be able to financially contribute to college. Once that amount is determined, the Stafford Loan amount will be calculated based on the outcome.

To start the process, you need to fill out a Free Application for Federal Student Aid (FAFSA) form. You can get a hard copy from your school or fill this application out online. The FAFSA application can be filled out by either the parents or the student. You will need to fill it out every year that you would like to receive financial aid. The FAFSA application will determine how much financial aid you are qualified to receive from the government and from the school that you will be attending.

After the form is examined, you will receive a Student Aid Report (SAR) in the mail. The SAR will explain your eligibility based on all of the information that you provided. If you find no mistakes on the SAR, then all of the information will be sent to the school or schools that you selected on the FAFSA application. This form is called the ISIR. The ISIR is not only sent to the schools of your choice, but also to the state government organization responsible for determining any financial aid amounts that you may qualify for from your state.

Next, you will receive financial aid award letters from the schools detailing financial aid amounts that you are eligible for and how you can go about collecting the money. You must fill out the acceptance portion of the award letter and return it to the school that you wish to attend.

You do not necessarily need to be a low-income family to receive a Stafford Loan. Many other expenses are taken into consideration. It is generally accepted that the Stafford Loan is the first loan that you should apply for before exploring the options of other parent or student loans. Discover more about Stafford Loans, other student loans, private student loans and parent loans at www.student-loans.net.