<p>I was recently going over Carnegie Mellon's Financial Aid Application instructions, and for the first time I saw the mention of "Stafford Loans" I looked up on the website and I just could not figure out if it was federal or private. However, I also noticed that it has an interest rate of a minimum of 5.6% which in my condition, is ridiculous.</p>
<p>Is this Stafford Loan thing a good thing? I've never heard of it until now. Is it something that's useful that a lot of people take advantage of or is it something to stay away from, because of its high interest rate.</p>
<p>Am I just better off filing out FAFSA and CSS and just leaving it there, or is there something that I must also do?</p>
<p>The Stafford Loan is a loan in the STUDENT’S name only…no cosigner needed. If you think 5.6% is a high rate of interest…go and try to find a loan for a student in their name only…no cosigner…at a bank or other private vendor. You will see that this rate of interest is good. Remember…students have no collateral for the banks to attach. Banks typically do not give loans to folks without collateral without a cosigner. Stafford loans do not require a cosigner.</p>
<p>You are not required to take out this loan. But if you want one, you must complete and submit the FAFSA.</p>
<p>Stafford loans come in 2 forms. Subsidized which are need based loans. The govt pays the interest until you graduate or drop below half time. The interest rate for subsidized loans for 2010-2011 is 4.5% (the 5.6% rate was for 2009-2010). </p>
<p>Unsubsidized loans are not need based. You are responsible for the interest. The interest rate is 6.8%</p>
<p>The max Stafford for a freshman is $5500 of which up to $3500 may be subsidized.</p>
<p>Stafford loans are federal student loans. The parent PLUS loans are a higher interest rate.</p>
<p>So, in conclusion it’s a good thing that I should definitely use in addition to FAFSA and CSS?
I’ve never ever heard of anyone using these from my friends who already went to college, so I just automatically assumed they were unfavorable.</p>
<p>Do any of you have personal opinions about this form of aid?</p>
<p>I’m sorry I’m asking so many questions but I was a little surprised to discover a whole-nother from of aid, this late.</p>
<p>It’s not in addition to FAFSA at all. Stafford loans are one of the forms of aid that may be offered to you in your financial aid package because you file FAFSA. It is federal aid.</p>
<p>If your friends went to colleges that do not include loans in their FA packages (ivies and some other elites), then that may be why you’ve never heard of Stafford student loans. Or, if their FA packages did have student loans in them, then maybe their parents opted to cover that amount so loans weren’t necessary.</p>
<p>The point is that many/most financial aid packages will have loans in them.</p>
<p>So if it’s another form of aid that is offered when I submit the FAFSA (which I already did), then is there a need to apply to Stafford separately?</p>
<p>I only applied to 2 ivies, but never heard of this from any other place. CMU was the only one to include it especially in their instructions. I presume that all other universities already include it in their package.</p>
<p>It is not another form of aid. It is federal aid that may be offered as part of a financial aid award from your school. Some schools (like most Ivies) promise to meet full need without any loans. They are the exception. Most schools include loans in their financial aid packages.</p>
<p>When you receive your financial aid packages, you may find the Stafford loan as part of your financial aid. You have the choice of taking it…or not. It’s your choice. You do not apply for the Stafford separately. By completing the FAFSA, you will be offered this loan at most schools.</p>
<p>If you choose to TAKE the loan, you will have paper work to complete.</p>