After understanding the concept and qualifying factors, the next step would be to learn all you can about interest and dollar amount of a Stafford loan. Typically, people who need financial aid to attend college will look at a number of possibilities such as scholarships, grants, private loans, and more but if you have gone through this process and found that a Stafford loan is the best solution for you, the information provided in this article will give you more insight into the way a loan such as this works specific to interest and amount you could borrow.
Remember, to secure a Stafford loan, you would need to meet the requirements for eligibility. The first four criteria include the following, which would be specific to enrollment or attendance at a college or university that participates in the Federal Family Education Loan Program.
• Being a citizen of the United States
• Being a United States national
• Having a permanent residence within the United States
• Being eligible as a non-citizen
In addition to the above, to benefit from the low interest and dollar amount of a Stafford loan you would need to complete and submit an FAFSA application for and be enrolled currently in school or have plans to attend college a minimum of half-time. These loans have two options – subsidized and unsubsidized. If you qualified for the subsidized option then you would also show the college or university where you go to school or plan to attend that financial aid is needed. Then, along with covering information on interest and dollar amount of a Stafford loan you need to know that an origination fee would apply, which is usually around 1%.
Although interest on a Stafford loan would be unique for each year, the following shows you what to expect for both a subsidized and unsubsidized option through the school year 2013.
• Academic Year 2010 through 2011 – Subsidized rates 4.50% / Unsubsidized and Graduate Rates 6.80%
• Academic Year 2011 through 2012 – Subsidized rates 3.40% / Unsubsidized and Graduate Rates 6.80%
• Academic Year 2012 through 2013 – Subsidized rates 6.80% / Unsubsidized and Graduate Rates 6.80%
Moving on to the dollar amount for a Stafford loan we have compiled the information as follows:
• Dependent Student
• First Year of College – $5,500 ($3,500 for a Subsidized Loan and $2,000 for an Unsubsidized Loan
• Second Year of College – $6,500 ($5,500 for a Subsidized Loan and $2,000 for an Unsubsidized Loan
• Third Year of College and Beyond – $7,500 ($5,500 for a Subsidized Loan and $2,000 for an Unsubsidized Loan
• Independent Student
• First Year of College – $9,500 ($3,500 for a Subsidized Loan and $6,000 for an Unsubsidized Loan
• Second Year of College – $10,500 ($4,500 for a Subsidized Loan and $6,000 for an Unsubsidized Loan
• Third Year of College and Beyond – $12,500 ($5,500 for a Subsidized Loan and $7,000 for an Unsubsidized Loan
• Graduate or Professional Degree – $20,500 ($8,500 for a Subsidized loan and $12,000 for an Unsubsidized Loan)
• Lifetime Limits for a Stafford Loan
• $138,500 (As much as $65,000 that could be Subsidized or $224,000 for Health Professionals
If you were to talk to any financial aid expert the first piece of advice you would be given is to try to secure Government money before looking at a loan. Even with the low interest and dollar amount of a Stafford loan versus a private loan, the fact is that having money for college that does not have to be repaid is the best option. However, because a Stafford loan comes with a fixed interest rate, offers flexible dollar amounts, and is backed by the Federal Government, of all loans this would be the best one to secure. Of course, in addition using the low interest and dollar amount of a Stafford loan for tuition, books, and lab time, this money could also be used to pay for housing and living expenses.