<p>How much can it loan and what are negatives/ benefits?</p>
<p>Stafford loans can be:
Subsidized: Requires financial need. Interest rate for the 2010-2011 school year is 4.5%. The govt pays the interest until you graduate or drop below half time, plus a 6 month grace period.
Unsubsidized: Does not require financial need. Interest is 6.8%. You are responsible for the interest from day 1.</p>
<p>The maximum amount depends on your year of school and your dependency status. The max for dependent freshman student is $5500 of which up to $3500 may be subsidized if there is financial need. A sophomore is eligible for $6500 of which up to $4500 may be subsidized, Third year and up are eligible for $7500 of which up to $5500 may be subsidized. The cumulative total Stafford is $31,000 of which up to $23,000 may be subsidized. </p>
<p>Independent students have higher maximums.</p>
<p>The benefit of the Stafford loan is that it is in the student name only and does not require a cosigner. Interest is also lower than for private loans. There is a limit for freshman year…I believe it’s $5500…but I’m really not sure about that.</p>
<p>Another benefit of Stafford loans are the repayment options such as Income Based Repayment which is not available for private loans. Finaid.org is a good site for info on student loans.</p>
<p>It should be mentioned that if your parents also apply for a Parents Plus Loan and are denied, the amount you are eligible (and the limit) to borrow under the Stafford Loan Program increases quite a bit.</p>