Did you know unsubsidized Stafford loans do not require a student to have financial need? Of course it is also the borrowers responsibility for paying all the interest which accrues as well.
The distinction between the subsidized and unsubsidized Stafford loans is that subsidized Stafford’s are based on financial need, which the government pays the interest on. That way when you get out of school you will only begin making payments on the principle balance(s) you borrowed.
Unsubsidized Stafford loans begin accruing interest while the student is in school and capitalize each quarter.
So let me get this straight. You can get your license between the ages of 14 and 18 (depending on your state), you can vote and join the military at 18, and hit the casino’s at 21 with an alcoholic beverage in hand. But for some godforsaken reason you must be 24 to be deemed independent for school purposes according to the Department of Education’s rules. The reason that status is so important is because you can qualify for more aid if you are independent vs. dependent.
It is true that more and more students are remaining home longer these days, but what about those under 24 who are legitimately independent? My cousin Tracy has been on her own since she was 18. She pays for rent, a car loan, and all her other monthly bills (credit card, utilities, cable, etc). Yet when she was completing her FAFSA last year, at the age of 20, it called for parental information because she was under 24. Is that fair?
Who drew the independent line in the sand at 24? You can support yourself, but we want you to list your parents and their six figure salary on your FAFSA so that you get no aid. This is just one of the reasons the FAFSA process is so frustrating for so many.
True, you can apply for a dependency override but those are exceptionally rare according to the DOE.
Many students, like my cousin, are now forced to work until they turn 24 and then go to school once their status is converted to independent. It is so sad.
24 may be a good series on Fox, but 24 in the land of the studentville can be quite cruel.
I’ve spoke to many students who were under the belief that the fafsa and Stafford loan were the same thing; they are not. One does lead to the other however.
You can have a FAFSA without a Stafford loan, but you can not have a Stafford loan without a FAFSA. You need to first complete your FAFSA to see if you qualify for a Stafford loan. Did you follow that?
Then, assuming you qualify, you complete your Stafford loan Master Promissory Note (MPN) next.
So to re-cap…
1. complete your FAFSA
2. complete your Stafford loan MPN
These are two separate steps. Of course you can always speak to your financial aid office at your school for further guidance as well.
Many of you will be receiving your second Stafford loan disbursement, which will be applied toward your upcoming spring semester within the next few weeks. The sad thing is for many it won’t be enough to cover all your expenses.
If you are seeking alternative means to finance your second semester (click here).
Also, this is a good time to remind you to file your 2009/2010 FAFSA immediately after the new year hits! If you haven’t gotten it already, the new FAFSA eBook for the 2009-2010 FAFSA is out and available. It’s a comprehensive line by line guide to the new FAFSA that becomes available in just TWO DAYS, so make sure you grab a copy of the eBook.
As most everyone knows the FAFSA is the key that opens the financial aid door, but which parent gets listed on the FAFSA for a dependent student after a divorce is the million dollar question. Is it the parent earning the most money? How bout the one earing the least? What about both?
The answer is…drum roll please…the parent you lived with for the greater amount of time during the 12 months preceding the date you file your FAFSA application.
If you didn’t live with either parent, or you lived with each parent an equal amount of time, then use information about the parent who provided the greater amount of financial support during the 12 months prior to the date you file your FAFSA application.
If you didn’t receive any financial support during that time than you must report information about the parent who most recently provided the greater amount of parental support.
I recently conduced a survey to find out if students knew they could choose their own lender for their Stafford loan when attending a FFELP school. The results I got back were quite alarming. Only 34% of students got the answer correct and I even provided a helpful link which makes me wonder if that number may have been even lower otherwise.
I guess my earlier lesson bears repeating. You may select the lender of YOUR CHOICE when it comes to Federal loans at FFELP schools (provided your lender disburses federal loans of course). The school will be held liable and subject to fines and other sanctions if they block you or do not certify your loan.
Flex some muscle. Don’t let the FAO tell you otherwise.
I have a question for you.Have you ever stopped to consider what fees are associated with your Stafford loan undergraduate application?If you have than you are in the minority.Most students generally have trouble just navigating the student loan process on the whole; fee’s become an afterthought.
The simple fact is many lenders charge fees ranging from 1-2%.Fee’s are about the only thing these days which delineate one lender from another.The interest rates are fixed and can not be negotiated, but fee’s can fluctuate.
Here at staffordloan.com we work with Discover Student Loans on undergraduate Stafford loans and are happy to inform you that we waive the fees for you!There are zero fees!The application process is quick and easy.Just make sure to complete your FAFSA first!
For those who don’t know, if you have past drug convictions, for selling or possession while you were receiving Federal aid, then this can affect your aid eligibility. Your eligibility for Federal aid is revoked for a period of time (directly correlated to the type and number of convictions). I did some research on this, and it appears that as long as you have completed an “acceptable drug rehab program”, you can still receive federal aid. There are no time constraints on this…you could be convicted of selling/possessing drugs, enter a rehab program, complete it, and still get Federal aid right away. An acceptable drug rehab program consists of:
An acceptable drug rehabilitation program must include two random drug tests.
The program must also:
Be qualified to receive funds from federal, state, or local governments
OR
Be qualified to receive funds from a federal or state licensed insurance company
OR
Be administered or recognized by a federal, state, or local government agency or court
OR
Be administered or recognized by a federal or state licensed hospital, health clinic, or medical doctor
I also found that if this drug conviction (for selling or possessing) was 2 or more years ago, then a drug rehab program is NOT required, and you should still be able to get federal aid. If you have more than 1 drug conviction in the past 2 years, then your eligibility is suspended for longer. So basically, if you have more than 1 drug conviction in the past 2 years, you have to wait longer in order to be eligible for Federal aid. (it appears that each drug conviction you have = 1 year of lost eligibility). If you have 3 or more drug convictions in the past, then you are ineligible for Federal aid indefinitely.
Many of you will be receiving your second 