Stafford student loan correspond to a financial aid federal program that comes to the help of needy people who want to continue their education. You can get access to such a program if you bring proof of low income. The payment deferment options, the low interest rate and the chance to consolidate education loans represent the main advantages of Stafford student loans. Limitations do exist in the system, particularly since the money is not always enough. You won’t be able to pay for your education from the loan alone and you’ll need to find ways to supplement funds.

In order to qualify for Stafford student loans you must first fill in a FAFSA which is an application form that also allows you access to all sorts of scholarship and federal grants. This additional sums of money could in fact provide the alternative financing sources when you lack the means to pay out of the pocket. The repayment for the Stafford student loans starts six months after graduation or school withdrawal. This period during which no payment occurs, bears the name of grace period.

There are two categories of Stafford student loans, some subsidized and others unsubsidized. Based on demonstrated financial need, students can get all the interest for the loans paid by the government in the form of subsidized loans. If the loan is unsubsidized, the interest accrues during school enrollment and is added to the initial debt in the process known as capitalization.There is a 6.8% fixed rate establish in the government loan system. In some cases, even lower rates than the standard are possible.

A better alternative to Stafford student loans are Perkins loans that have a 5% interest rate and are granted to students with the direst financial situation. Nevertheless, we need to stress out once more that both these types of federal government loans are not enough to cover all the educational expenses particularly if we think of the number of degrees one may want to take: BA, MA and PhD. Therefore, you’ll have to finance your studies out of the pocket, from personal savings or study-work solutions. Some families go as far as making home equity loans when their children do not qualify for federal stafford student loans.