x

Direct Stafford Loan

Print Friendly

Direct Stafford Loan

Can I cancel a Direct Stafford Loan after I’ve applied?

Print Friendly

Yes. Before your loan money is disbursed (paid out), you may cancel all or part of the loan by notifying your school. After your loan money is disbursed, you may cancel all or part of your loan within certain timeframes. For details, refer to the Borrower’s Rights and Responsibilities Statement that accompanies your MPN.

Can I postpone Stafford loan payments while I am in school?

Print Friendly

Yes. While you are enrolled in school on at least a half-time basis, you are eligible for an in-school deferment that allows you to postpone payments on your Direct Stafford Loan until you graduate or drop below half-time status.

Do I need to apply for an in-school deferment each year?

Print Friendly

Generally, the school will certify your expected graduation date with the Dept of Education. The in-school deferment on your Direct Stafford Loan will then remain in effect until you graduated or drop below half-time enrollment status.

How do I apply for a Direct Stafford Loan?

Print Friendly

You must complete the Free Application for Federal Aid (FAFSA) http://www.fafsa.ed.gov/.  Once you are awarded loans, you must then complete a Direct Loan Stafford Master Promissory Note (MPN) and complete Entrance Counseling Interview.

How do I complete my MPN?

Print Friendly

To complete an MPN online, you will be required to use your FSA username and password to log into studentloans.gov. If you do not have an FSA username and password, you may request one at http://fsaid.ed.gov.

 

How much will I have to pay each month?

Print Friendly

Your monthly payment amount on a Direct Stafford Loan will vary depending on the repayment plan that you choose and how much you borrowed. You can obtain estimated monthly payment amounts for different debt levels or for other repayment plans by contacting the Direct Loan Servicing Center at www.studentloans.gov or 1-800-848-0979.

How soon do I have to begin making payments after my in-school deferment ends?

Print Friendly

Once you are no longer enrolled at least half time in an eligible program, you will receive a 6-month grace period on your Direct Subsidized and Unsubsidized Loans during which you are not required to make loan payments. The government will no longer subsidize or pay the interest on behalf of students during the six month grace period after graduation or when students are no longer enrolled at least half-time. This is effective for new Direct Subsidized Loans disbursed on or after July 1, 2012. You must begin repayment at the end of your grace period.

If I’m a dependent student how much can I borrow?

Print Friendly
  • ·1st year undergraduate: $5500 maximum ($3500 subsidized; $2000 unsubsidized)
  • ·2nd year undergraduate: $6500 maximum ($4500 subsidized; $2000 unsubsidized)
  •  ·3rd/4th year undergraduate: $7500 maximum ($5500 subsidized; $2000 unsubsidized) ·The total amount that can be borrowed as a dependent undergraduate is $23,000 subsidized and $8000 unsubsidized.

If I’m an independent student how much can I borrow?

Print Friendly
  • ·1st year undergraduate: $9500 maximum ($3500 subsidized; $6000 unsubsidized)
  • ·2nd year undergraduate: $10,500 maximum ($4500 subsidized; $6000 unsubsidized)
  • ·3rd/4th year undergraduate: $12,500 maximum ($5500 subsidized; $7000 unsubsidized) ·The total amount that can be borrowed as a dependent undergraduate is $23,000 subsidized and $34,500 unsubsidized. ·Graduate/Professional: $20,500 unsubsidized ·For loans borrowed prior to July 1, 2012, the total amount borrowed as a graduate/professional student can not exceed $65,500 subsidized and $73,000 unsubsidized. The total borrowed between both loans can not exceed $138,500. Please note: Graduate and Professional students will NOT be eligible for Direct Subsidized Loans made for periods of enrollment (loan periods) beginning on or after July 1, 2012.

Are there fees associated with a Direct Stafford Loan?

Print Friendly

Yes. The U.S. Department of Education charges a loan origination fee of 1% of the principal amount of each Direct Stafford Loan. This fee is deducted proportionately from each disbursement of your loan.

What is the interest rate on the Direct Stafford Loan?

Print Friendly

The interest rate on Direct Subsidized Loans made to undergraduate students is a fixed 3.76%. The interest rate on the Direct Unsubsidized Loan is also 3.76%.

What are the aggregate total limits for direct subsidized and unsubsidized loans?

Print Friendly
  • · $31,000 for dependent undergraduate students excluding those whose parents are unable to borrow a PLUS Loan (no more than $23,000 may be subsidized)
  • · $57,500 for independent undergraduate students and dependent undergraduates whose parents are unable to borrow a PLUS loan (no more than $23,000 may be subsidized)
  •  · $138,500 for graduate/professional students (no more than $65,500 may be subsidized). [Please note:] the government has eliminated eligibility for the Direct Subsidized loan for Graduate and Professional students made for periods of enrollment (loan periods) beginning on or after July 1, 2012.

Can my Stafford loans be unevenly distributed between the fall and spring semesters?

Print Friendly

No. Under the Federal Direct Loan Program (FDLP), your Stafford loan is to be evenly split between the fall and spring semesters. There are two exceptions. (1) If your grade level changes in spring. (2) If you attended summer for the first time and used less than the even split awarded for summer.

I did not complete my Master Promissory Note or Entrance counseling before the semester ended. Can I still receive my Stafford loans?

Print Friendly

No. Under the Federal Direct Loan Program (FDLP), three steps must occur before a loan is considered eligible for FDLP funds: (1) an accepted FDLP origination record; (2) a signed Master Promissory Note; (3) an accepted actual disbursement (payment). These must occur before the semester ends.

What are the eligibility requirements?

Print Friendly
  • · You must have a high school diploma or GED certificate.
  • · You must be enrolled at least half-time and be working toward a degree or certificate in an eligible program. · You must be a U.S. citizen or eligible noncitizen.
  • · You must have a valid Social Security Number.
  • · You must register with Selective Service if required.
  • · You must not be in default on any federal education loans or owe an overpayment on a federal education grant.
  • · You must maintain satisfactory academic progress once in school.
  • · You must complete the Free Application for Federal Aid (FAFSA). http://www.fafsa.ed.gov

What does Direct Lending mean?

Print Friendly

Direct lending refers to loans made and processed  directly through the U.S. Department of Education as the lender.  All repayments are made directly to them.

What is a Master Promissory Note (MPN)?

Print Friendly

The Master Promissory Note (MPN) is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the Department of Education. It also explains the terms and conditions of your loan(s).  When you borrow a Direct Loan for the first time, you must complete an MPN.

What is a subsidized Direct Stafford loan?

Print Friendly

A subsidized Direct Stafford loan is a loan from the Department of Education to students who can demonstrate financial need. The interest for the subsidized loan is paid or subsidized by the Department of Education, while you are in school at least 1/2 time. The government has eliminated the subsidy during the six month grace period after graduation or when students are no longer enrolled at least half-time so that the student will incrue interest during this six month grace period. This is effective for new Direct Subsidized Loans disbursed on or after July 1, 2012.

Who is eligible for a Direct Subsidized Stafford loan?

Print Friendly

Undergraduate students who have demonstrated financial need as determined by the completed FAFSA. The government has eliminated eligibility for the Direct Subsidized loan for Graduate and Professional students made for periods of enrollment (loan periods) beginning on or after July 1, 2012.

What is an unsubsidized Direct Stafford loan?

Print Friendly

An unsubsidized Direct Stafford Loan is a loan from the Department of Education for students not based on a demonstrated financial need.  For an unsubsidized loan, the interest is not subsidized (paid) by the Department of Education. Instead, the interest accrues and from the point the loan is originated the student is responsible for paying the accrued interest. The student can pay the interest while in school or during a period of deferment or forbearance.

What is Entrance Counseling?

Print Friendly

Entrance Counseling is an electronic document available on VISION that provides an overview of federal loans and information to help the student understand their rights and responsibilities regarding their loans. It is a federal requirement that a student read and complete the Entrance Counseling before the student’s loans will disburse.

What repayment plans are available?

Print Friendly

You may view information on available repayment plans online by going to www.studentloans.gov and selecting Repayment Plans and Calculators.

Will I need to complete a MPN every year?

Print Friendly

In most cases, once you have submitted the MPN and it has been accepted, you will not have to complete a new MPN for future loans you receive. You may borrow additional Direct Loans on a single MPN for up to 10 years.

Will I receive a disclosure statement?

Print Friendly

Yes. You will receive a disclosure statement that gives you specific information about any loans that the school plans to disburse under your MPN, including the loan amount, fees, and the expected disbursement dates and amounts.

Leave a Reply