Getting financial aid for college can be a complicated experience, especially if you and your parents are unfamiliar with the process. The most important thing to remember is that all things financial aid related for college begin with the FAFSA (Free Application for Federal Student Aid see links). You must fill out this form, first and foremost. The FAFSA will tell your school and the government if you are eligible for aid, and if approved will then lead you in the direction of filling out the correct forms to receive a Stafford Loan.
Application
Before you can even be considered for a Stafford Loan for college, you have to first fill out a government form called the Free Application for Federal Student Aid (FAFSA). This FAFSA form is how the government decides if you are eligible for a Stafford Loan based on your family income and other factors. Currently, you can borrow up to $7,500 per year in Stafford Loans if you are a dependent student, and up to $12,500 per year if you are an independent student (meaning no parental help) depending on your year in school. If your family is very wealthy you are not likely to be approved for government assistance in the form of a Stafford Loan; the Stafford Loan program is only for students that are in financial need.
Deadlines
In order to be eligible for a Stafford Loan, you are required to submit a FAFSA application by a certain deadline. The deadline is dependent on your school and the state in which the college is located. Some schools will require that you submit your FAFSA before the end of January of the year you plan to start school in order to receive a Stafford Loan for the year, so it's important to be on the ball and keep up with your important dates.
Paperwork
In order to receive a Stafford Loan, you have to fill out paperwork in a timely fashion. The most important form you will have to look over and sign is the Master Promissory Note, which is also referred to as an MPN. This is the main agreement you have with the lender in regard to paying your education loan back after graduation. Take this contract very seriously and only borrow what you need because, at some point, you are going to have to pay this money back to the lender.
Subsidized and Unsubsidized Requirements
There are two types of Stafford Loan programs: subsidized and unsubsidized. Subsidized Stafford loans are granted to students who have been determined to have a financial need. While the student is attending school, the government pays for the interest that is accruing. However, with an unsubsidized Stafford loan, the student must pay back any interest that builds up, even while he or she is attending college. Some students choose to take unsubsidized Stafford loans as an additional source of income and support during their college career.
Expected Family Contribution
Once you have submitted all of your paperwork, the FAFSA officials do a calculation regarding what your family can realistically afford to invest in your education. This is called the expected family contribution or EFC. When they determine this figure, they subtract it from the estimated tuition and fees you'll pay to attend school to decide how much financial aid you are eligible for.
Accredited Institution Requirement
One of the most important Stafford Loan requirements is that you are going to school at an accredited American college or university. Accredited means that the school has to meet certain standards set by the government for quality and academic standards. Only schools that meet these standards are eligible to receive Stafford Loan funding for students and other financial aid.
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