Loans
1. What is a FFELP loan?
2. What is the difference between the Subsidized and Unsubsidized Stafford Loan?
3. What are some benefits of the Stafford Loan?
4. How much can I borrow with a Stafford?
5. What is the interest rate on a Stafford Loan?
6. If I do not graduate, do I have to repay my Stafford Loan?
7. Who is my lender?
8. What is loan counseling and why must I complete this process?
9. What are some of the benefits of the PLUS Loan?
10. How much can my parent borrow with a PLUS Loan?
11. What is the interest rate on a PLUS Loan?
12. What if my parent is turned down for a PLUS Loan?
13. How can I get an In-school Deferment on repayment of my loan?
14. If I am in default on a previous loan, what documents are needed to clear the default?
1. What is a FFELP loan?
The Federal Stafford and PLUS Loans are offered through the Federal Family Educational Loan Program (FFELP). Private lenders fund the loan. The federal government guarantees the loan against default, which allows lenders to offer loans at very attractive interest rates. These loans are sometimes referred to as Federal government guaranteed student loans.
2. What is the difference between the Subsidized and Unsubsidized Stafford Loan?
A Stafford Loan is a government-guaranteed loan available to students. There are two types of Stafford loans; subsidized and unsubsidized. With a subsidized Stafford, the government pays the interest while you’re in school. With an unsubsidized Stafford, you are responsible for the interest while you are in school. You can either elect to pay the interest while you are in school or defer it until after graduation. You should note that if you defer the interest, it will be capitalized upon graduation and will raise the overall cost of your loan.
3. What are some benefits of the Stafford Loan?
- The interest rate is capped at 8.25% for the life of the loan
- It carries low origination and guarantee fees
- There is no credit check
- Repayment of the loan does not begin until you graduate or drop below half-time status
- The loan is forgiven in case of permanent disability or death
4. How much can I borrow with a Stafford?
Your eligibility is determined by the Office of Financial Aid. You will be notified of the exact amount you can borrow in the Financial Aid Award Notification. You can never borrow more than the cost of education, less other financial aid received. Below are the maximum amounts you may borrow.
If dependent, your combined subsidized and unsubsidized Stafford annual eligibility is as follows:
| Freshman | Sophomore | Junior | Senior | Graduate |
| $3,500 | $4,500 | $5,500 | $5,500 | N/A |
If independent, your subsidized and unsubsidized Stafford annual eligibility is as follows:
| Freshman | Sophomore | Junior | Senior | Graduate | |
| Subsidized | $3,500 | $4,500 | $5,500 | $5,500 | $8,500 |
| Unsubsidized | $4,000 | $4,000 | $5,000 | $5,000 | $12,000 |
| Total | $7,500 | $8,500 | $10,500 | $10,500 | $20,500 |
5. What is the interest rate on a Stafford Loan?
The rate is variable, and is currently 2.77% for the in-school period and 3.37% when you are paying it back after graduation or if you are dropping below the half-time status. The rate is reset on July 1 every year. It is capped at 8.25% for the life of the loan.
6. If I do not graduate, do I have to repay my Stafford Loan?
Yes. The Stafford Loan, like any other loan, must be repaid.
7. Who is my lender?
The “lender” is the lending institution (bank, credit union, etc.) that makes your student loan funds available to you. Students should refer to their award notification, promissory note, or notice of guarantee to find the name of their lending institution.
8. What is loan counseling and why must I complete this process?
Loan counseling is required by federal regulations for all first-time borrowers at a school. The session gives an overview of the Federal loan program, discussing the types of loans, interest rates, borrower rights and responsibilities, etc. This obligation is fulfilled on our Web site.
9. What are some of the benefits of the PLUS Loan?
- The interest rate is capped at 9% for the life of the loan
- It has no prepayment penalty
- It has lenient credit criteria, often more lenient than with other types of loans
- It allows you to keep other assets, such as savings, retirement, and home equity intact.
- It protects your family in case of permanent disability or death. In this case, the loan would be forgiven.
10. How much can my parent borrow with a PLUS Loan?
You can borrow up to the cost of attendance, minus any other financial aid your child receives. The cost of attendance is determined by the school’s financial aid office, and usually includes tuition, room and board, books, living costs and transportation expenses.
11. What is the interest rate on a PLUS Loan?
The rate is variable, and is currently 4.17%. The rate is reset on July 1 every year, and is calculated by adding 3.1% to the 91-day treasury bill rate posted before June 1 of that year. It is capped at 9.0% for the life of the loan.
12. What if my parent is turned down for a PLUS Loan?
If your parent is denied, you may be eligible to borrow a Federal Unsubsidized Stafford Loan. You must request the Federal Unsubsidized Stafford Loan. Contact our office for specific details.
13. How can I get an In-school Deferment on repayment of my loan?
Request the deferment form from your bank and have our Registrar’s Office complete it, and return it to the bank. Continue to make all payments until the bank sends you confirmation of your deferment.
14. If I am in default on a previous loan, what documents are needed to clear the default?
A letter is required from the agency, or holder of the defaulted loan, stating that the default has been cleared.