Stafford Loan is a financial aid program provided by USA Federal Government to finance the higher education of students at a very low interest rate. One needs to fill out the FAFSA form before taking out this loan. The loan is available in two different types: subsidized and unsubsidized. The subsidized loan is offered to the students depending upon their financial aid and their inability to pursue higher education due to the shortage of funds and other available resources. The interest rate levied on this loan is paid by Federal Government when the student is in school; which is the grace period. However the Budget Control Act of 2011 has removed subsidized loans for graduate and professionals from 2012, 1st July onwards while the unsubsidized Stafford loan would be still available.

In the Subsidized Stafford Loans, the college in which the student tries to seek admission would review the FAFSA form and then determine the maximum amount that should be given to you to finance for your higher studies. For students who have enrolled half time, no interest rate whatsoever would be charged. The very 1st step to get this financial aid program is to fill out an application form called FAFSA in which one needs to fill in their relevant personal and academic details. One can either submit the application online or mail to the address of US Department of Education. The application form is then processed and is then transferred to the college in which you prefer to seek admission. One needs to know that this is a first come first serve loan because if you apply late for this loan, the chances are that you would not be eligible to get the required amount of financing.

To become eligible for the Subsidized Stafford Loans, one needs to fulfill the following criteria mentioned below:

Subsidized Stafford Loan is offered to the students at a fixed rate of interest at 3.40 percent and there are no payments whatsoever required when one is in school. Students need not bring any cosigner and there is no credit check is required. It means that people with bad credit scores can get this loan easily. The repayment of the loan begins after 6 months of completion of the course or after 12 months getting a job. The maximum time to pay off the loan is 7 years and in the event if one faces difficulty in loan repayment, one has the option to defer the loan up to 2 years. It is to be noted that this loan is able to finance for tuition fees only. At any point of time if you feel that the amount so financed is not sufficient enough then opt for scholarships, grants or private student loans to finance for the other remaining part of your student expenses.