What’s An Undergraduate Stafford Student Loan And What Should I Do If I Can’t Pay Back My Stafford Loans?

Undergraduate Student Loan Benefits

An undergraduate Stafford loan is a fixed rate student loan for undergraduate students attending a college or university that participates in the Federal Direct Loan Program.

Stafford loans aren’t based on credit! Stafford loans can be used to pay your tuition and other eligible school expenses.

What are the benefits of Undergraduate Student Loan Benefits?

Benefits include a low fixed interest rate. Up to $12,500 per year depending on your release status and years in school – no payments while you’re enrolled in school and during the grace period.

What’s the difference between a Subsidized and Unsubsidized Stafford Loan?

A subsidized Stafford loan is a federally guaranteed loan based on your financial need. Interest does not accrue on the loan while you’re in school at least half-time. On the other hand, unsubsidized Stafford loans are federally guaranteed loans that are not based on your financial need. Interest does accrue from the time your loan is dispersed to the school but payments can be deferred until 6 months after graduation.

What happens if I can’t afford to pay my Stafford loans when I leave school?

You’ll need the assistance of a student loan attorney to help place you in an affordable Income Based Repayment Plan. Most borrowers are automatically placed in a 10-year fixed repayment program when they leave the school. Because of the economy, many borrowers simply can’t afford to make that fixed payment.

On the other hand, there are great Income Based Repayment Plans that will provide a reasonable and affordable payment based on your income and financial circumstances. Don’t let your student loan debt limit your horizons. Contact Income Based and PAYE Student Loan attorney Nancy Cavey today to help you manage your undergraduate Stafford loans. Call us today to learn about your options.

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