Understanding Stafford Student Loans

For many years, the Stafford student loans program has been providing students across the country with the opportunity to continue their education. Stafford loans come as both subsidized and unsubsidized loans, and are only partially awarded based on a students credit rating. Many students with less than perfect credit can still qualify for Stafford student loans.

To apply for Stafford students loans, contact your school's financial aid department and request a FASFA, or Federal Application for Student Financial Aid, or you can fill one out online. You should be certain that you check the deadlines for filing before you start your first semester, or you could find that you have waited too long to qualify for any Stafford student loans.

Subsidized Vs. Unsubsidized Loans

There is a substantial difference between a subsidized loan, and an unsubsidized loan. Subsidized Stafford student loans offer the opportunity to go to college to student with a less than perfect credit rating, as they are backed by the Department of Education. A subsidized student loans is actually much easier to get from a lender, because of the fact that the government guarantees payment to the lender if you default on your loans.

Unsubsidized Stafford student loans are a little harder to get, as they are based upon your credit rating. While students with only slightly less than perfect credit can still get an unsubsidized student loan, you can greatly improve your chances of getting unsubsidized Stafford student loans by checking your credit record before applying, and clearing up any minor discrepancies.

Building Your Credit With Stafford Student Loans

For students with little or no credit, Stafford student loans are an excellent way to build an established credit rating. Students who pay their loans off on time, suddenly find themselves several points higher on the credit rating scale, as they now have a loan of several thousand dollars that has been paid in full.

Many students, on the other hand, do not realize the importance of paying their Stafford student loans off on time, and end up defaulting on their loans. Defaulting on your student loans will have a negative impact on your credit rating that can follow you for years. Even if you have a subsidized loan that is backed by the Department of Education, it is vitally important that you make your payments on time; or that you apply for a deferment of your Stafford student loans payments, due to unforeseen financial hardships.