fafsa deferment – Stafford Loans, Can’t Live With ‘em, Can’t Live Without ‘em

Posted by admin on October 2, 2011 under FAFSA Tips | Be the First to Comment

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Stafford Loans, Can’t Live With ‘em, Can’t Live Without ‘em

With tuition costs at record highs, and federal Pell Grants only covering a fraction of the cost, Stafford loans have grown in importance and serve as an essential ingredient for today’s students looking to fund their college education.

Since the late 70’s, tuition and fees at private four-year colleges have increased nearly tenfold. And while those fees have far outpaced inflation the same can not be said for the federal Pell Grant. The Pell Grant was created in 1976 to help aid lower-income students with the cost of higher education, but those funds don’t go nearly as far today as they once did.

When the Pell Grant program was first launched it covered a
1000
bout 70% of the cost of attendance at a typical four-year institution. Today the Pell Grant covers a mere 30% on average. One notable way students help bridge the widening gap between tuition costs and Pell Grant funds (for those who are eligible) is with the federal Stafford loan.

Stafford loans are federally backed and available to students attending Title IV certified schools. The loans, however, do hold yearly maximum allotments. The maximum allotments are determined by your year in school as well as your status (dependent or independent). Unlike Pell Grants, Stafford loans must be repaid after you graduate, and generally hold a 10-year repayment term. In addition, Stafford loans are divided into two categories, subsidized and unsubsidized.

Subsidized Stafford loans are awarded based on financial need. You will not be charged interest before you begin repayment or during periods of deferment. The federal government “subsidizes” (or pays) the interest during these times. No payments are expected on the loan while you are enrolled as a full or half time student.

Unsubsidized Stafford loans are not awarded based on financial need. Any eligible student can take out Unsubsidized Stafford Loans. You will be charged interest from the time the loan is disbursed, to the time the loan is repaid in full. No payments are expected on the loan while you are enrolled as a full or half time student.

For the upcoming 2009-2010 academic year the interest rate for subsidized Stafford loans, for undergraduate students, is fixed at 5.6%. If you fall into the unsubsidized category you will be extended a 6.8% fixed interest rate. To determine your eligibility and see if you qualify for a subsidized or unsubsidized Stafford loan you must first complete a FAFSA.

FAFSA stands for free application for federal student aid, and is available to all U.S. citizens, U.S. nationals, and U.S. permanent residents who have an I-151, I-551, or I-551C (permanent resident card). The FAFSA is your key to any federal loan or Pell Grant.

It’s true that tuition costs are out of control, but don’t focus on that. Set your sites on matters you can control, like getting the financial aid you need for school. You have the financial aid tools, now it’s time to put them to good use.

By: David E. Bonvie

Article Directory: http://www.articledashboard.com

www.studentloannetwork.com

If you are applying to universities and would like some financial aid, the first step to getting it is to fill out an application called the Free Application for Federal Student Aid, more commonly known by its abbreviated name – the FAFSA.

The FAFSA is used to calculate how much money you (or your parents) will be expected to pay towards the cost of your further education, and determines how all federal student loans and grants are awarded. It is also used by the majority of schools to decide how their own aid awards are distributed, so if you can’t afford to pay in full for your college education it is just as important as your actual college applications in securing your ability to actually do the course you want to do.

Approximately 14 million FAFSA applications are processed from potential new students every year, and as a result about $80 million in financial aid gets distributed. This is managed and controlled by The Office of Federal Student Aid, which is a division of the Department of Higher Education.

The FAFSA can be completed either as a hard copy form and sent away, or can be submitted online. The online form is the preference both of The Office of Federal Student Aid and of the majority of applicants, as it has built in validation which checks for errors instantly, meaning far fewer forms get sent back with issues or omissions when completed in this way, which with the paper forms can be the cause of weeks of delay in some people’s applications.

The estimated time to complete the FAFSA is around one hour, and the online form can be saved and returned to so you can start it off early and finish it when you have gathered any additional information you need. You will find it far quicker and easier to complete the FAFSA if you have all of the relevant documentation required in your submission to hand. This includes:

• Either your or your parents’ most recent income tax return (your parents’ if you are applying as a dependent)

• Your social security number

• Your driver’s license (unless you don’t drive)

• Any current investment records

• Current bank statements

• Records of any untaxed income

If you are not a U.S. citizen you will also have to provide details and evidence of either your permanent residency or alien registration.

You will need to complete the form with details of the schools you are applying to, you and, if relevant, your parents’ financial status, and other general information about yourself and your family.

Ensure you submit the application in advance of the closing date for submissions for the schools you are applying to go to. Note that these may differ from the federal closing date for FAFSA applications, which is June 30th. Submit your application as early as you can – if you have to estimate figures then do, it is better to have to change them later than to miss the deadline for one of your school options.

Since you’re actively seeking student loans then you should definitely look into these options for the best student loans available to you.