College can be a big investment, and no matter where you are in your college education, you may find a large gap between your desire to pursue a career and the money you have available to actually pay for it. Did you know that two thirds of all college students resort to undergraduate student loans in order to finish their degree?
The federal Stafford loans are one of the simplest and more common loans that you can apply for as an undergraduate because of their low, fixed interest rates. Subsidized Stafford loans are based solely on the financial needs of the undergraduate student, while unsubsidized Stafford loans are not based on need.
According to staffordloan.com being a US citizen or permanent resident, being able to show high school completion or a GED test, attending an approved university at least half-time, having no deferments on any outstanding federal loans and possessing a FAFSA pin number are all requirements for a student to apply for a subsidized Stafford loan. He must also be able to show he has a financial need.
Once your subsidized Stafford loan is approved, you won\’t have to worry about making payments or paying interest until six months after you receive your degree. They don\’t require a credit check, and you won\’t have to pay high interest rates.
The unsubsidized Stafford loans are different from the subsidized loans in three important ways. Interest is charged monthly immediately when the money is released, they have higher fixed interest rates and you don\’t have to prove you have a financial need to receive one.
One advantage of the unsubsidized Stafford loan is that you can apply for $2,000 more than the total available from the subsidized Stafford loan. Once you receive this loan, it would be wise to make monthly payments to pay off the interest you are being charged each month while you are still in school. If you don\’t make any payments, the interest is added together and applied to the total amount of the loan. Interest is then accrued on the total of the loan and interest combined when you begin to repay the loan.
The financial solution for many college students is a loan. Loans should only be considered after you have exhausted the possibility of free money. In order to make a wise choice concerning the undergraduate student loans you need, consider your financial condition and how the loan will affect your future.
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