Many college students today hit a hurdle before they even start when it comes to finding the funds necessary for college because they have already managed to run up a poor credit history. Fortunately however there are aid and loan packages available today which look principally at need and ignore your credit history and so this is where you will need to start your search for funding.

One of the oldest sources of funding and one which is chiefly available on the basis of economic need is the Pell grant. As long as the student and his family are considered to be a low-income family a Pell grant is more or less automatic and is made on the basis of the submission of supporting documentation.

The student will be required to provide proof of the cost of his intended course (including tuition fees and other qualifying costs) and will also need to provide details of the family’s income from which an EFC (Expected Family Contribution) number will be calculated. On this basis a decision will be made and the grant made or refused.

As the name suggests, a Pell grant is a ‘gift’ and not a loan and it does not have to be repaid. Pell grants are currently for a maximum of $4,731 a year (depending on your assessed financial need) and, while this will not normally cover the full cost of attending college, it can go a long way towards helping. However, most students will need to seek loan funding in addition to a Pell grant and the best form of loan funding initially are Stafford loans.

There are two different types of Stafford loan and the first is a subsidized Stafford loan on which the government pays any interest charges while you are studying full-time and for up to six months after graduation. The second type of Stafford loan is an unsubsidized Stafford loan on which you will be responsible for making all interest payments.

Unsubsidized Stafford loans need to be considered very carefully because, although you will be responsible for making interest payments, you will not be required to do so while you are in full-time education and for up to six months after graduation. However, during this period interest will still be applied to any loan and will simply be added to the outstanding amount of the loan. This means that during a three or four year college course your loan debt can grow substantially and reach a very significant sum by the time you do start paying it off.

Naturally, most students would prefer to have an unsubsidized Stafford loan but loans are disbursed according to the funds available and on the basis of need so that only a minority of students will qualify for a subsidized loan. The good news however is that most students will qualify for an unsubsidized loan and, despite their drawbacks, these still represent one of the best forms of college loan funding available today.

There are of course other forms of grant and loan funding available (and scholarships) and you need to shop around to see just what is available and best suits your circumstances. However for students from low-income families Pell grants and Stafford loans are invariably the best routes to follow.

By: Donald Saunders

Established by an Act of Congress in 1965 and begun in 1966, the Federal Family Education Loan Program (FFELP) is a partnership program between the federal government and private lenders and an umbrella program which includes Stafford loans, student PLUS loans and Perkins loans. Since it started more than half a trillion dollars have been disbursed through this program.

Funds for the program are provided by a network of independent banks, credit unions and other financial institutions and lenders are generally happy to make money available in what would normally be considered a high risk area of lending because loans are to a large degree (although not totally) underwritten by the federal government. In about five percent of cases private guarantors do become involved with defaulted loans and are able to make application to the federal government for at least partial reimbursement.

The vast majority of funds are used for subsidized and unsubsidized Stafford loans. In the case of subsidized loans the federal government pays the interest on loans while students are attending full-time courses (and for up to six months after graduation), while in the case of unsubsidized loans students are responsible for paying the interest due on their loans. Interest is not however normally paid on unsubsidized loans while a student is attending full-time education (and again for up to six months after graduation) but is added to the loan.

The other program with attracts major funding is the student PLUS loans program which is designed to allow parents to take out loans on behalf of their children. This program was extended in 2006 and is now also available to professional and graduate students. The student PLUS loans program is becoming an increasingly important part of college funding these days.

Applications to the Federal Family Education Loan Program are normally made using a Free Application for Student Aid (FAFSA) application form which is submitted to the loans officer at the college for which the student has been accepted. Applications are then examined and loans granted on the basis of the information provided and the availability of funds for disbursement.

Loans are normally disbursed at least twice each year (depending upon the academic timetable followed by the college) and it is common for the bulk of each loan to be paid directly to the college to cover tuition and other fees, with the balance then being paid over to the student or parent, less fees.

In most, but certainly not all cases, a fee of about 4% is payable which is made up of a 3% administration, or ‘originating’, fee and a 1% insurance fee. It is not uncommon however for higher fees to be charged and so it is important to ask about the fee structure and, if necessary, to shop around when applying for student loans.

By: Donald Saunders

A Federal Stafford Loan is a low interest rated program available for the graduate and undergraduate students. The Federal Stafford Loan does not consider how much a student or a parent can manage to pay. It is simply available for anyone who needs a financial aid and with low rates. It is much known to many colleges and universities simply because it is offering what the beneficiaries need.

The Federal Stafford website gives all the information on how to go about getting a Stafford loan and what is more, all the benefits are well explained to you. You need to know that there are subsidized and unsubsidized Stafford loans. The two loans are different and are well explained the Federal Stafford Loan website. After getting enough information on it then you will decide on the unsubsidized Stafford loan or subsidized loan depending on your need.

In order for you to be eligible for a Stafford loan, you need to fill out a FAFSA form and successfully be qualified. After receiving the student financial loan grant letter then you can smile for it will have put you on the side of Stafford Loan eligibility. Now fill in the Master Promissory Note (MPN).

The next step is to contact your lender for both have to come in to an agreement on means of payment. As much as you are being given a financial assistance, you should put it in mind that it is just like any other loan. Please, be sure to pay the federal Stafford loan to avoid your loans being defaulted. You will be in for many problems that can severely affect your life if this happens. Then make a decision on the type of Stafford loans that you feel comfy for and now rest assured that your education is financed. Just to give you a tip, the government pays for the interests on the subsidized loan while you are in school while the unsubsidized ones, you pay the interests for yourself. The interest rate is fixed and in a 10 year time flame in which you will need to pay the loans and the interest. . Like I said, choose the Federal Stafford Loan that best describes your lifestyle. So, take my word for it and stop wasting time! Go for Federal Stafford Loan and you will not regret it!

Poly Muthumbi is a Web Administrator and Has Been Researching and Reporting on Student Loan Consolidation for Years. For More Information on Federal Stafford Loan, Visit Her Site at FEDERAL STAFFORD LOAN

By: Poly Muthumbi