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Top Questions
about Federal Stafford Loans*
What’s the difference between
subsidized and unsubsidized Stafford Loans?
It’s all about financial need. Subsidized Stafford
Loans are awarded to students with demonstrated financial
need.
While students are in school, Uncle Sam pays the interest
on subsidized Stafford Loans, and payment is deferred (delayed)
until after graduation. Once out of school, though, the student
assumes responsibility for the loan, including interest.
With an unsubsidized Stafford Loan, you’re
responsible for the interest from the time funds are disbursed.
This loan is not based on financial need; in fact, virtually
every student is eligible for an unsubsidized Stafford Loan.
Although interest starts to accrue immediately, you can delay
repayment until after graduation.
How much money can I get with a
Stafford Loan?
Dependent students
may borrow $2,625 in their first year, $3,500 in their second
year, and $5,500 in their third and fourth years of college. Independent students
can borrow an additional $4,000 in their first and second
years, and an additional $5,000 during their third and fourth
years.
What if it isn’t enough?
If Stafford Loans are not enough to pay for school, your
parents (if you’re a dependent student)
may be able to borrow under the Federal
Parent Loan for Undergraduate Students (PLUS) program.
With this loan, parents can borrow up to the total cost
of education at your school, less any other aid you are
awarded.
If federal aid leaves you short, look into Private
Loans. NextStudent offers unsecured, credit-based private
loans for undergraduate, graduate and continuing education
students.
How are loan funds disbursed?
Stafford Loan funds are usually disbursed at the beginning
of each semester. Funds are paid directly to your school
and the school distributes any excess funds directly in
the student's campus account or directly to the student
in the form of a check.
What is the interest rate?
The interest rates on Stafford Loans accrues at 6.8%.
How do I apply for a Stafford Loan?
You can apply
online or call a NextStudent Education Finance Advisor
at (800) 299-4639.
* Please be aware that while we continue to offer Private Student Loans, NextStudent is not currently able to accept any new PLUS, Grad PLUS, Stafford, or Federal Consolidation Loan applications.
On October 1, 2007, legislation went into effect that cut $21 billion in subsidies to FFELP lenders like NextStudent. We have been searching, and continue to search, for avenues that would allow us to keep offering FFELP loans. But at this point, until market and regulatory conditions change, we find ourselves forced to suspend our federal education loan programs.
We value your business, and we want to make sure you’re able to get the money you need to pay for school. We encourage you to take advantage of college scholarships and your available federal financing options. But if you’re still in need of a parent or student loan, please give us a call, and we’ll do what we can to help.
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