Anyone know anything about a "Stafford loan"?

The are issued by the federal government and have a very low interest rates, If you are eligible you should do it. They got me through college.

If you need to borrow for college, you want subsidized loans as opposed to private lender financing. With private lenders, school loans become the same as any other debt.

School loans, private or federally funded, cannot be excused by bankruptcy. You have to pay these babies off in their entirety, or be able to defer the federal loans long enough to have them forgiven (I believe it’s 25 years of deferrment.) This site has information about deferrment and forbearance of student loans.

My daughter financed grad school with a combination of private loans, Stafford loans, scholarships, and Pell Grants, which do not have to be repaid. She drew more out against the Stafford loans than she needed, and worked full time to reduce her living expenses. As a result, at the end of the master’s program, she had enough money saved to pay off the private loans entirely, as well as a portion of the stafford loans. She is working, but a perk of her job is 6 hours of university study for free, so the Stafford program considers her a student, and her loans defer. She is paying the interest and part of the principal each month anyways, so it doesn’t build up. Since her job pays less than $30,000 a year, this is a welcome perk. By living frugally, she is able to make a small loan payment without any problem.

The only problem with stafford loans is that you are only allowed to take out so much, based on your income (or your parents income). I was limited to 2500 per quarter while I was in school… which wasn’t even ¼ the total cost per quarter.

Get a Stafford loan over any other type of loan if you can. There are subsidized stafford loans, and unsubsidized.

On a subsidized Staff loan, the government foots the bill for the interest accrued. On an unsubsidized, the borrower pays the interest. So obviously, get subsidized stafford loans if you can.

Another thing to consider is consolidating your loans. After a few years of college, you have the opportunity to consolidate your loans. KEEP IN MIND, you are only allowed to consolidate ONE TIME, over the life of the loan. So I recommend NOT consolidating (whether subsidized or not) unless you know you are done taking out loans, OR there is something going on in the economy that threatens to increase the interest rate dramatically in a short period of time (because consolidating allows you to lock in the current lower rate).

I think that’s all there is to know except: try and get as many grants as possible. That way you don’t have to pay anything back!