| Lenders |
| Loan
Entrance/Exit Counseling |
FFELP are Federal
Stafford Loans that are made through commercial lenders
and guaranteed by the federal government.
Federal Stafford Loans are either subsidized
or unsubsidized.
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The
maximum amount you can borrow depends
on your student status as a graduate or an undergraduate,
your undergraduate status as a dependent or independent
and your year in school. The current limits are displayed
in the U.S. Department of Education Student
Guide.
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A subsidized loan is awarded
on the basis of financial need. The federal government pays interest
on the loan ("subsidizes" the loan) until you begin repayment,
and during authorized periods of deferment. The interest rate in
repayment varies annually, and equals the 91-day Treasury bill
rate plus 3.1 percent, with a maximum annual rate of 8.25 percent.
An unsubsidized loan is not awarded on the basis
of financial need. The student borrower of the unsubsidized loan
is responsible for the interest, from the time the loan is disbursed,
until it is paid in full. You may choose to pay the interest
as it accrues while you are enrolled, or you may defer the interest
and allow it to accumulate. If you allow the interest to accumulate,
it will be capitalized—that is, the interest will be added
to the principal amount of your loan, and will increase the amount
you have to repay. If you choose to pay the interest as it accumulates,
you will repay less in the long run.
The interest rate during in-school, grace and
deferment periods varies annually, and equals the 91-day Treasury
bill rate plus 2.5 percent, with a maximum rate of 8.25 percent.
The interest rate in repayment varies annually, and equals the
91-day Treasury bill rate plus 3.1 percent, with a maximum annual
rate of 8.25 percent.
Your award package may include both subsidized and unsubsidized loans. There
is a grace period of six months after graduation, or dropping below half-time
attendance, before repayment of the principal of the loan begins. Loan amounts
are awarded based on the class level and cannot exceed the established student
budget for the school, including other aid.
Applicants who want to be
considered for federal subsidized or unsubsidized
loans must first complete the Free Application
for Federal Student Aid (FAFSA), or the Renewal
FAFSA. The FAFSA applies to a particular
Financial Aid Year, which runs from July 1 through
June 30 of the following year. FAFSA forms
normally become available during the preceding
December, but the U.S. Department of Education
will not accept applications until after the first
of
January preceding the new Financial Aid Year. You
may also complete the FAFSA via the internet, but
be cautious of internet sites that want to charge
you a fee to help you complete this free application
for student aid.
