My son fill out the free FASA application and was told that he maybe eligible for a Direct STAFFORD loan estimate of $7,500.00. Our EFC was 20804. I am not sure what happens next. Do we wait for the University to process the paperwork for the Stafford Loan or should we initiate the paperwork? Is there a guarantee approval for a Stafford Loan at $7,500.00? What is the advantage of a Federal Student Loan vs Private Student Loan?

We just applied for a private student loan with Sallie Mae, however, they offer us a loan with a 10% variable interest rate, which I feel is not a good deal. We do not want to accept their terms until we look at other alternatives.

Any advice you can provide us will be greatly appreciated.

Thanks.

Typically, federal student loans offer better terms, as their benefits give students a lot more options, (especially once it goes into repayment). I would suggest sticking with federal loans before looking into private ones.

To accept your Stafford loan, you should contact your financial aid office and they can tell you what further steps you need to take. Also, this post from the StudentLoanNetwork blog is a beginner's guide to Stafford loans and may be helpful- Freshmen: How to Get Your Stafford Loans