Stafford Loan for Students
A
Stafford Loan is a student loan offered to eligible students enrolled
in certified American institutions of higher education to help finance
their education. The terms and conditions of the loans are described in
Title IV of the Higher Education Act of 1965 (with subsequent
modifications), which guarantees repayment to the banker if a student
defaults.
Because the loans are assured by the
full faith of the US Government, they are provided at a lower interest
rate than the borrower would otherwise be able to get for a private
loan. On the other hand, there are arbitrary eligibility requirements
and borrowing limits on Stafford loans.