Stafford Student Loans

In 1965 Congress established the Federal Family Education Loan Program or the FFELP to help supply financial aid to students.This was first intended to cover those in need but it rapidly expanded as do some government programs.Today Stafford loans supply over 90% of the money distributed each year within the FFELP categories.

One way they broadened its definition was to employ two seperate kinds of Stafford loans, that being subsidized and unsubsidized.

In the case of the subsidized loan the government would pay any interest that would accrue from the time the loan was taken out until the payments begin.Usually there are no payments required while the student is in school half time or more and you are granted a 6 month grace period after you leave the school.Of course you may request that payments begin earlier.

Because the interest is subsidized, these loans are based on need meaning that officials look to the family income when making the decision as to whether the student qualifies.A number called the Expected Family Contribution is used,by examining your income information that you gave when you filled out the Free Application For Federal Student Aid which is available at Application.

Around 75% of all subsidized Stafford loans are given to students whose families have an Adjusted Gross Income of under $50,000 per year. Another 25% are awarded to those in the $50-100,000 per year range. But with the Government the definition of "needy"is of course flexible since a little bit less than 10% of the subsidized loans are given to students whose combined family income is over $100,00.

If you do not qualify for a subsidized loan you probably will qualify for an unsubsidized Stafford loan.Bear in mind though that the interest accumulates from the day you receive the money until the day that it is paid off.

The average undergraduate student (and/or parent) borrows about $15,000 per year in a mix of subsidized and unsubsidized Stafford and other sources.

A detailed breakdown of how much can be borrowed and by whom is given at: Student Aid or at Salliemae Fees apply so the stated amounts received by students will actuaqlly be less.