Stafford loans are loans that are guaranteed by the federal government. The interest rate for these loans is variable and set by the government depending on the market rate. The rate changes in July of every year. There are two types of Stafford loans.
The Subsidized Stafford loans are the best loans to take out. The government pays the interest on the balance of the loan as long as you are in school working towards your degree. This can save you a lot of money over the years.
Unsubsidized Stafford loans start accumulating interest the day you take out the loan. You can opt to pay the interest each month or to have it added into the balance that you owe each month. It is much wiser to pay the interest on the loans while you are in school.
You can apply for these loans by filling out the FAFSA (Free Application for Federal Student Loan). You can also visit your college's financial aid office to learn more about how to apply. When you take out this loan you will be required to take a short class on repaying your loan.
