Subsidized or Unsubsidized Stafford Loans For College Financial Aid

For moms going back to school, learning financial aid terminology – FAFSA application, Stafford Student Loans, college scholarships and grants, etc – while balancing all that other stuff life throws at you – kids, homework, bills, etc. However, Stafford Loans can be a critical part of the education process. Like the Pell Grant and scholarships, Stafford Student Loans provide financial aid for single mothers, working moms, or just moms in general; unlike the Pell Grant and scholarships, just about everyone can get them, but they must be paid back.

That’s right, the first thing to know about Stafford Loans is that they are just that – loans, not grants or scholarships. Grants and scholarships are the ideal financial aid for single mothers and working moms (or pretty much anyone) because they’re essentially free. Stafford Student Loans must be paid back, but the good news is that your credit score isn’t involved and the interest rate is among the lowest you’ll find.

Stafford Loans were created as part of the Higher Education Act of 1965 and can be received either via the federal government or a private lender. They can be subsidized or unsubsidized (based on financial-need qualifications), and remain deferred as long as a student maintains a half-time course load. Interest rates vary for subsidized loans (between 3.4% and 6.8% from now until 2013) and are locked in at 6.8% for unsubsidized loans until 2013.

Paying Back Stafford Student Loans

What happens after you graduate? Well, most likely you’ll be earning income, so you won’t be applying for financial aid for single mothers or working moms anymore. When it comes to Stafford Loans repayment, there are set parameters regardless of lender:

• Payment collections begin six months after graduation, leaving school, or dropping below half time with no interest charged during this time
• Stafford Loans generally come with four or more payment plans depending on the lender
• Deferment is available under special circumstances

Federal or Private Stafford Loans?

You might be wondering why Stafford Student Loans are available through both the federal government and private lenders. More importantly, if you’re looking for financial aid for single mothers or working moms, which Stafford Loans provider should you use?

There are pros and cons with each decision. Since the introduction of the fixed Stafford Loans rate, some private lenders have offered their own perks, such as dropping the interest rate further for signing up for direct debit or other incentives. Federal Stafford Loans can be consolidated with other federal loans but they can’t be consolidated with private ones. In some cases, the government will even forgive Stafford Loans if you work in the public sector.

If you’ve made it this far, there’s a good chance that you’re at least considering Stafford Loans as your source of financial aid for single mothers or working moms. For detailed information on the hows and whys of Stafford Loans, start by going to the official Stafford Loans website or calling your local lender to see if they offer Stafford Loans. If you’re looking for even more financial aid outside of Stafford Student Loans, try registering for our $10,000 scholarship.