The subsidized Stafford loan is a fixed interest rate loan offered by the US government to cover educational expenses. It does not accrue interest while the borrower is in college and is not credit-based. Eligibility requires completing the FAFSA and being enrolled at least half-time in an accredited program. The loan amount is limited by the school and can increase as the student advances through college levels. The borrower must begin paying off the loan after graduation or the agreed deferment period.
A subsidized Stafford loan is a student loan offered to college students by the federal government of the United States. The loan has a fixed interest rate and can be used to cover tuition, room and board, books or other educational expenses. Unlike an unsubsidized Stafford loan, the loan does not accrue interest while the borrower is in college. The federal government subsidizes loan interest while a student is in college at least half the time. Once a student graduates from college, she begins paying off the loan.
The loan is not credit based; however, a borrower is limited by his school as to the amount he can borrow each school year. If a student already has his or her expenses covered by other scholarships, grants, or loans, the college may limit the student’s eligible amount. The amount of money loaned can also increase as a student advances through the college levels. For example, a senior or graduate student may be awarded twice as much as a freshman.
To be eligible for a subsidized Stafford loan, a student must be a citizen of the United States or an eligible non-citizen, such as a legal refugee. Applicants must have obtained a high school diploma or passed an equivalency exam. The federal government also requires borrowers to complete the Free Federal Student Aid Application (FAFSA), a form that records the financial means of the borrower’s parents to determine how much they can afford to contribute towards tuition.
If the borrower’s parents are found to be earning enough money to fund tuition, the borrower may be eligible for little or no federal government aid. A subsidized Stafford loan cannot be used if parents have the financial means but choose not to contribute to a student’s college education due to personal objections, such as disapproval of religious affiliations or college location. In that case, a student could apply for private loans or scholarships.
Once a student is found to be eligible for federal tuition assistance, they can apply for a subsidized Stafford loan through their college. After a student is approved, the money can be deposited into the student’s school account or mailed as a personal check. To maintain eligibility, a student must remain enrolled in an accredited college or university program at least half of the time. The borrower begins to pay off the loan after graduation or the agreed deferment period set out in the loan agreement.
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