Stafford Loan

Ever since he was knee high to a grasshopper, Anthony has dreamed of being the first person in his family to go to college. Now that he’s getting close to graduating from high school, it’s time to figure out how to turn that dream into reality. He’s got good grades, good test scores, and a ton of extracurricular activities on his university applications. The biggest obstacle, as far as he can see, is that college is just so expensive. Really, he doesn’t see how he’s going to be able to pull this off without a little financial assistance.

Luckily, “Stafford loans,” also known as “direct loans,” exist. Stafford loans are federal student loans granted to undergraduate and graduate students who are attending school at least half-time (this usually means six credit hours per semester for undergrads and four or five for grad students).

There are two types of direct loans: subsidized, which means they’re granted according to financial need, and unsubsidized, which means financial need has nothing to do with it. Anthony’s all about getting whatever assistance he can, so he takes the necessary steps to get himself a loan. Step One is to get accepted to an accredited college or university. Step Two is to fill out and send in the FAFSA form. Step Three is to take whatever loan money he’s granted and put it toward his tuition, books, fees, room and board expenses, etc.

The maximum loan amounts differ based on where we are on our educational journey—i.e., the max loan amount for seniors is higher than it is for freshmen—and we have to stay in school at least half-time in order to keep receiving money. Also—bonus—we don’t have to start paying back the loans until after we either graduate or leave school, and when we do pay them back, we’ll probably be paying a much lower interest rate than we would have if we’d just taken out a random loan from a bank. So that’s nice.

There are also many different repayment options we can look at, like graduated payments which will allow Anthony to pay less early on while he’s working at that entry-level job, and more later when he’s making the big bucks as CEO.

Direct loans might not be the best choice for everyone considering getting a post-secondary education, but in cases like Anthony’s, they can help make dreams come true.