Stafford Loans

Most students who apply for federal aid will have to take out loans at some point in their college career. Student loans can be necessary to fund your education and the loans are very low interest and you do not have to start paying on these loans until six months after you graduate.

There are two types of Stafford Loans:
Direct and FFEL. You will not have a choice which one you receive. It is the school's choice whether they are a FFEL or Direct Loan school.

Loans can also be subsidized (the government pays the interest while you're in school) or unsubsidized (you pay all the interest, although you can have the payments deferred until after graduation.) The type of loan you are eligible for will depend on your financial need.

Direct Loans are funded by the federal government, so you pay the Department of Education directly. For more information on the Direct Loans, visit the Direct Loans web site.

FFEL loans are funded by private lenders, but are still federally backed and the lenders must follow strict federal loan guidelines. Your lender might be Sallie Mae, Bank One, or many other recognizable financial institutions.

There are a few programs to discharge your Stafford Loans.

• You die or become totally and permanently disabled.
• Your school closed before you could complete your program.
• Your school owes you a refund, forged your signature on a promissory note, or certified your loan even though you didn't have the ability to benefit from the course work.
• You work in certain designated public service professions (including teaching in a low-income school).
• You file for bankruptcy. (This cancellation is rare.)

For all cancellation provisions please visit the loan discharge section of Student Aid on the Web.

You can also get more information by visiting Federal Stafford Loan.com