8 Benefits of Stafford Student Loans
Stafford loans are the cornerstone of the Federal Title IV Financial Aid program. The vast majority of college students have used these subsidized loans as the primary means of funding education over the last several decades. As the cost of tuition, housing, and books increases, the demand for student loans increases. There are several advantages to Stafford loans that you will not find with private student loan programs. Always remember to borrow responsibly and do well in class! Below is a list of the top benefits of Stafford Loans.
1. Low Interest Rates
The current annual interest rate for Stafford loans is set at 6.8%. This is much lower than many private loan alternatives out there.
2. Deferred Payments
Payment is deferred the entire time you are enrolled in college as full time student. Many students go from undergraduate to a Ph.D. over the course of 8 years without making a single loan payment! On top of that, you get an additional 6 month grace period after graduation.
3. No Credit Checks
When you complete your FAFSA application there is no credit check whatsoever. In fact, there are no checks at all regarding the students ability to repay the loan.
4. No Income Requirements
Students are not required to have an income to receive student loans. There are no debt-to-asset ratios or any other traditional income requirements for borrowing.
5. Flexible Repayment Plans
Standard repayment on Stafford loans is over a 10 year repayment period. However, this can be extended to 25 years in certain low income professions. Teachers are offered special repayment plans in some cases.
6. Guaranteed by the Federal Government
If you default on your loan you will be in BIG trouble. Stafford loans are essentially impossible to get rid of, even in bankruptcy. The only way to get out of your student loan is to die L.
7. Loan Consolidation Programs
The Department of Education allows you to consolidate student loans if you have had your loan sold or transferred to a different servicing company.
8. High Aggregate Limits
As an undergraduate student, you are able to borrow up to $57,500 as the total lifetime limit. Graduate students are capped at $138,500. That's not bad for financial aid loans benefit.
Learn More about Stafford Loans
We hope you learned more about the benefits of stafford loans.