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Are federal stafford loans "good" in a financial aid package?

I got my first financial aid letter and i was hoping for grants and scholarships but all they offered me was a stafford loan and work study. Going to see what other schools give me before making up my mind. Topic: Financial Aid | Asked by: Chuck D. | Asked on 03/29/2012

Answers (3)

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Stafford loans and work study are also federal, so they are going to be (generally) the same no matter what schools you apply to. Often, grants and scholarships are from the schools and have opportunity to be merit-based. Federal stafford loans are pretty standard need-based financial aid, but you should work with the financial aid counselors at your top choice schools. They will let you know about the merit scholarships the schools offer and if you have a chance for more aid or merit scholarships.

Answered by: Taylor C. | about 2 years ago
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To clarify a little bit on Sam's answer, there is actually no difference in rate for Subsidized or Unsubsidized loans for this year's class (first time in 5 years.) The difference is in who pays the interest. Subsidized means the gov't pays your interest while you're in college, Unsubsidized means you're responsible for it. Right now the rates are fixed at 6.8%. It may seem high, but remember these loans don't require any credit history or minimum score. If you compare them to other third party education lenders, (who can have variable rates as high as 12%) you'll find that Stafford Loans aren't a bad option if you have to borrow money. Perkins loan is even better if you can get it (5% fixed rate and it's subsidized)

Answered by: Justin M. | about 2 years ago
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It's a tough blow to see "loans" when you were hoping to see grants and scholarships, but it's a good idea to see what the other schools are going to offer, so you can get a better sense of what your options are. As for federal Stafford loans, as far as student loans go, they offer some good advantages vs. a private loan you'd get from a bank. They have a fixed rate and payment can be deferred until after you graduate. Is it a subsidized or an unsubsidized Stafford loan? Subsidized loans have a lower interest rate, while unsubsidized Stafford Loans have a much higher interest rate - but even if it's unsubsidized you may be better off than you'd be with a private loan. It's also worth noting that the interest you pay on a Stafford loan is tax deductible.

Answered by: Sam C. | about 2 years ago
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