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Stafford loan is the term for student loans issued by the federal government. This is one of the basic loans available for qualified students. It is best to have a background with this if you so decide to apply for one.

There are two kinds of Stafford loan. One is the direct type where the funds are provided by the federal government itself. The other is the Federal Family Education Loan or FFEL. In this program, the money is given by private lenders, usually financial institutions like banks and such. But not all private lenders join the program. The repayment choices you will have will also be based on which party is involved, since they have different requirements of payment.

A loan can be a subsidized or an unsubsidized one. The first can be advisable for students who need a little financial help in paying for their education. In this case, the federal government handles the interest attached to these loans while the student is still studying and also throughout periods of deferment. The unsubsidized loan on the other hand gives total payment responsibility to the applicant. The interest will begin to increase from the day of disbursement until complete repayment of the loan. You will also have the option of capitalizing the loan to put the interest in the principal amount of the unsubsidized loan. But since interest will be applied to the resulting amount, you may have to pay a larger amount after graduation.

Your status as a student will also determine the amount of a Stafford loan. You cannot avail of the loan if you are less than a half-time student. If you are fortunate enough to have a scholarship or grant, you can take them into consideration when applying for the proper amount.

The benefits provided by the Stafford loan can ease the burden of students that doesn’t have adequate funds to ensure the continuation of their education. If you feel you need one, then it’s time to learn more about this option.