Guaranteed Student Loans (GSL)

GSL or Guaranteed Student Loans are also known as Stafford Loans. This program became available in 1965 and the name was changed in 1988 to the Federal Stafford Loan Program. The program was set up so students would have more money available through loans that are provided by banks and other financial institutions. These are guaranteed by the Federal Government and have a lower interest rate compared to other types of student loans. There are Subsidized and Unsubsidized GSL programs. With Subsidized loans, the government pays the interest on the loan while the student is in school. The Unsubsidized loans do charge the student interest while they are in school. However, neither loan goes into repayment until the student has stopped going to school. Also, the Subsidized loans are solely based on the financial need of the student, while the Unsubsidized loans are granted regardless of what the financial need is. The loans do go into repayment 6 months after a student leaves school.

Federal Stafford Loans are granted to students to help supplement family resources, their own resources, grants, scholarships and work study programs as well to pay for the cost of college. Students can receive Stafford Loans regardless of what their credit score is. The student will receive a Subsidized or Unsubsidized loan, based on the financial need.

Federal Stafford Loans offer:

  • An increase in the borrowing limit. A student can borrow up to $20,500 per year. This depends on the degree status and the number of years that the student is in school.
  • There are no payments to be made while the student is enrolled in school.
  • There is no credit check to be accepted.
  • There is a low fixed interest rate on the loans.

Federal Stafford Loan eligibility is based on:

  • Being a U.S. citizen, permanent resident or eligible non-citizen.
  • The student must be accepted at a college for enrollment or already attending a college that¬†participates in the Federal Family¬†Education Loan Program.
  • A FAFSA must be submitted to be eligible for a Federal Stafford Loan.
  • Again, a Subsidized Federal Stafford Loan is based on financial need to be eligible and the school determines this.
  • Students must be enrolled at least half time at the school they are or will be attending.

There is a loan origination fee of 1.0% on all loans that are disbursed between July 1, 2010 and June 30, 2011. Check the loan origination fee with each school year.

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