Success The Turning Point

Author(s): Rajendra Rakhecha
Publisher: Rajendra Rakhecha

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Students in certain health fields have higher maximums, and can borrow up to $47,167 a year and up to $224,000 in total through the Stafford program.
How much do Stafford loans cost?
Staffords charge a fixed rate of 6.8 percent, plus up-front fees of 1 percent of the amount borrowed. Those rates may increase due to a series of federal budget cuts known as sequestration, which went into effect on March 1, 2013. When the rates will rise, and by how much, have yet to be determined.
All Stafford loans for graduate students are unsubsidized, meaning interest will accumulate on the loans while students are in school.
How do I get a Stafford loan?
You must fill out a FAFSA. For unsubsidized Stafford loans, students do not need to demonstrate financial need.
Does every grad student get approved for a Stafford loan?
No. Students who are not eligible for the program, who have defaulted on other college loans, or who are attending school only part time do not qualify.
What if I have bad credit?
You can get a Stafford loan if you've defaulted on a mortgage, car, credit card, or medical bills. The federal government does not do a regular credit check for Stafford loans. It only rejects applicants who have defaulted on other federal education loans.
What if I need more money than the Stafford maximums?
You can borrow up to your full cost of attendance from the federal Graduate PLUS program. But those have higher fees and interest and are not awarded to students with bad credit.
How is the credit crunch affecting Stafford loans?
Stafford loans are funded and made entirely by the federal government. So they remain available to all qualified students.
Are Stafford loan payments tax deductible?
It depends on your income when you start repaying. Generally, for a single person, education loan
interest is not deductible if your adjusted gross income is more than $75,000.
When do I have to start repaying my Stafford loan?
The first bill comes due six months after you've left school, whether that's after graduation or after you've dropped out.
What are the advantages of a Stafford loan?
Stafford loans have a fixed interest rate, so the size of your monthly payment won't increase if interest rates rise. Through Income-Based Repayment, Stafford borrowers can ask to have their payments capped at 15 percent of their disposable income. As of December 2012, borrowers who demonstrate financial hardship can also opt for the Pay as You Earn plan, which caps payments at 10 percent of discretionary income.
And public servants who make 10 years worth of income-based repayments can have their remaining Stafford debts forgiven.
What happens if I lose my job or get into other financial trouble?
Call the Department of Education and ask about income-based payment options, such as the Pay as You Earn plan. If that doesn't bring your payments down to an affordable level, you can also ask for either
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