Federal Direct Stafford Loan
How Do I Apply for a Federal Stafford Loan?
Federal Stafford Loan Information for all Incoming, New, and Transfer students:
- To obtain a Federal Direct Subsidized Stafford Loan or a Federal Direct Unsubsidized Stafford Loan: All students who file a 2012-2013 FAFSA will be offered a Federal Direct Stafford Loan on their financial aid award notice, which can be accepted or declined. All accepted loans will be originated/created with the Department of Education in mid-July. If you decline the Stafford Loan, and later in the semester decide you need Stafford Loans, please contact the Financial Aid Office.
- After the Stafford Loan is processed in mid-July, you should receive a Loan Disclosure Statement from the William D. Ford Federal Direct Loan Program detailing the terms and conditions of your Federal Stafford Loan.
1) After accepting your loan, you need to electronically sign a Master Promissory Note (MPN).
2) You will also need to complete Loan Entrance Counseling.
NEW - BEGINNING the 2012-2013 academic year for ALL STUDENTS:
- The interest rate on ALL Subsidized AND Unsubsidized Stafford loans will be a fixed 6.8%.
- There will be a 1% fee on all Federal Stafford loans, so please consider this in your calculations for billing purposes.
Example: First-year students receive a total of $5500 Federal Stafford Loan in two equal disbursements (half will disburse for the fall and the other half will disburse for the spring semester). A total of $2722 net will disburse per semester.
- PUBLIC LAW 112-74 amended HEA section 428(a)(3)(A)(i)(I): For ALL NEW DIRECT STAFFORD LOANS with a first disbursement on or after July 1, 2012 AND before July 1, 2014, the interest subsidy on Direct Subsidized loans during the six month grace period is ELIMINATED for ALL students no longer enrolled on at least a half-time basis. This means that Direct Subsidized Stafford loans will accrue interest during the grace period (just like Unsubsidized Stafford loans). If interest is unpaid, it will be capitalized. THIS AFFECTS ALL GRADUATING STUDENTS AND THOSE WHO ARE LESS THAN HALF-TIME ENROLLMENT.
Federal Stafford Loan Information for all Continuing/Current students:
- All students who file a 2012-2013 FAFSA will be offered a Federal Direct Stafford Loan on their financial aid award notice, which can be accepted or declined. All accepted loans will be originated/created with the Department of Education. If you decline the Stafford Loan, and later in the semester decide you need Stafford Loans, please contact the Financial Aid Office.
- Shortly after the Stafford Loan is processed, you should receive a Loan Disclosure Statement from the William D. Ford Federal Direct Loan Program detailing the terms and conditions of your Federal Stafford Loan.
- If you had a Federal Direct Stafford Loan with the William D. Ford Federal Direct Loan Program in the past, you do not need to sign a new Master Promissory Note (MPN); an MPN is valid for 10 years. If you have not had a William D. Ford Federal Direct Stafford Loan in the past, or you are unsure about having a William D. Ford Federal Direct Stafford Loan in the past, then you need to complete the following two requirements at www.studentloans.gov.
You can double check all your Federal student loans at www.nslds.ed.gov.
1) Log in to www.studentloans.gov using your FAFSA PIN # and complete a Stafford
Loan MPN. If you forgot your PIN #, you can request a duplicate PIN at www.pin.ed.gov.
2) At www.studentloans.gov complete Loan Entrance Counseling (only for new borrowers).
Note: Federal Stafford Loan eligibility – Sophomores are eligible for a total of $6500. Juniors are eligible for a total of $7500, and Seniors are eligible for a total of $7500 per academic year. Loans are disbursed in two equal disbursements, half for the fall semester and the other half for the spring semester. Beginning the 2012-2013 academic year: There is a 1% fee on all Federal Stafford Loans, so please consider this in your calculations for billing purposes.
Example: Sophomores will receive a total net disbursement of $3217 per semester.
Lycoming College is notified electronically when you complete your Loan Entrance Counseling as well as signed your MPN, so you do not need to notify the Financial Aid office.
What are the Terms and Conditions of a Federal Stafford Loan?
1. Federal Subsidized Stafford Loans (no interest accrues while in school, but WILL accrue
during the grace period for loans from July 1, 2012 through June 30, 2014):
a. 2011-2012 there is a 3.4% fixed interest rate.
b. 2012-2013 there is a 6.8% fixed interest rate.
2. Federal Unsubsidized Stafford Loans (interest accrues while in school & during grace):
a. 2011-2012 there is a 6.8% fixed interest rate.
b. 2012-2013 there is a 6.8% fixed interest rate.
3. Origination Fees on Federal Stafford Loans that come off the disbursed amount:
a. 2011-2012 there is a .50% Origination Fee.
b. 2012-2013 there is a 1% Origination Fee.
4. 0.25% interest rate reduction for borrowers who elect automatic debit of monthly payments.
5. There is a six-month grace period.
After the Federal Stafford loan has been originated/created, a Disclosure Statement from the William D. Ford Federal Direct Loan Program will be mailed to the student at the address you provided on the FAFSA. This Statement details all the terms and conditions of the Federal Stafford
Other Important Information regarding loans:
- An academic year at Lycoming College is composed of a minimum of 30 weeks of instructional time during which a full-time student is expected to complete at least 24 credit hours. These standards are used in determining eligibility for federal student aid and loan proration.
- Effective for the 2006-2007 school year the College has redefined its definition of academic year. Starting with Fall 2006 an academic year at Lycoming College is composed of a minimum of 30 weeks of instructional time during which a full-time student is expected to complete at least 30 credit hours. Full time enrollment status is considered 12 credit hours. These standards are used in determining eligibility for federal student aid and loan proration.
- You must be attending Lycoming College at least half-time to be eligible for a Stafford Loan. Half-time enrollment is defined as 6 - 8 credit hours. Three-quarter time enrollment is defined as 9-11 credit hours.
- Eligibility for the subsidized loan may change if you receive additional non-college aid that was not known by the College at the time the award notice was printed or if corrections are made to the FAFSA which change the EFC.
- The MPN can be submitted as soon as possible prior to the new school year, but it should be submitted no later than June 15th if you wish to have your loan appear on your bill as estimated financial aid. The MPN is a legal document. By signing the Stafford MPN, you promise to repay your current and future Stafford Loans. This Note is valid for 10 years and does NOT require you to complete another MPN for subsequent borrowing, unless you elect to use a different lender than what was submitted on the original MPN, or due to a request made by the lender or school.
- Repayment of the loan principal is deferred until six (6) months after you graduate or cease to be enrolled on at least a half-time basis.
- Repayment is made to the Department of Education on a monthly basis, and the maximum repayment period is ten years.
Federal Perkins Loan
A need-based, low-interest federal loan awarded to students who demonstrate exceptional financial need. Priority is given to students who meet the March 1st priority deadline. Lycoming College is the lender, and the loan is made with government funds. You must repay this loan. Awards vary, but cannot exceed $4,000 per year. Funding is limited; therefore, not all students meeting the criteria will receive Federal Perkins Loan funds.
No interest accrues while in school, and repayment of the loan is deferred until nine (9) months after you graduate or cease to be enrolled on at least a half-time basis.
When repayment begins, the interest rate will be five (5) percent. Billing is handled by an outside agency; however, payments are made directly to Lycoming College on a monthly basis. The maximum repayment period is ten years.
For more information regarding the Federal Perkins Loan program please refer to the FSA for Students web site.
Apply online for a Perkins Loan.
Federal Direct PLUS Loan
Who is Eligible for a Parent PLUS Loan?
You must be the student's biological or adoptive parent or the student's stepparent. Both parents may get a PLUS loan as long as the total aid package does not exceed the student's cost of attendance. A stepparent is eligible to borrow a PLUS loan if their income and assets would be taken into account when calculating the dependent student's EFC. A legal guardian is not considered a parent for FSA purposes. (FSA Handbook)
How Do I Apply for a Parent PLUS Loan?
All eligible parents of dependent undergraduate Incoming, and Transfer students interested in applying for a Federal Parent PLUS loan will need to follow these instructions:
If your parent would like to obtain a Federal Direct Parent PLUS Loan, a FAFSA is required for the 2011-2012 academic year and beyond . Parent PLUS Loans will be originated/created with the Department of Education beginning in mid-July. Since the credit check is performed when you apply for a Parent PLUS Loan, and it is only good for 90 days, it is best to wait until mid-July before submitting your application.
The PLUS Loan application process is two separate steps.
1. One parent should complete the Parent PLUS application online at
www.studentloans.gov, using your parent FAFSA PIN # to log in.
2. After applying online, the parent (borrower) needs to sign a Master Promissory
Note (MPN) at www.studentloans.gov.
- A credit check is done before you complete the entire PLUS loan application. If approved, you can proceed by completing the loan application and signing an MPN. If denied, you have the option to submit endorser information (a co-signer for the parent loan; if not your student may be eligible for additional Federal Unsubsidized Stafford Loan.)
- During the online application process at www.studentloans.gov, the borrower may request an "in-school deferment" option that will be in effect while the student is enrolled full-time. Interest will accumulate on the loan during this deferment period. You can also contact the Direct Loan Servicer at 1-800-848-0979 to request a PLUS “in-school deferment”. Otherwise, the PLUS Loan payments begin 60 days after the loan is fully disbursed into your student’s account.
- Shortly after the PLUS Loan is processed, the borrower should receive a Loan Disclosure Statement from the William D. Ford Federal Direct Loan Program detailing the terms and conditions of the Federal Parent PLUS Loan.
NEW FOR 2012-2013: There is a 4% fee on all Federal Parent PLUS Loans, so please consider this in your calculations for billing purposes. Example: A $6000 PLUS Loan will net a disbursement of $5760. These funds are wired to us and go directly into your student's account.
The Parent PLUS loan you completed online at www.studentloans.gov will be sent to Lycoming College electronically.
If you have any problems with the www.studentloans.gov website, please contact Direct Loans at 1.800.848.0979.
What are the Terms and Conditions of a Federal PLUS Loan?
- 7.9% fixed interest rate
- 4% Origination fee.
- Repayment: Will begin 60 days after final disbursement is made, or payments can be deferred while student is enrolled at least half-time. Call Direct Loan Servicing to have the loan deferred (deferral needs to be renewed each year) at 800.848.0979. You can make interest only payments during deferment, if you choose. Standard Repayment term is 10 years.
- After the Federal PLUS loan has been approved by Direct Loans, a Disclosure Statement from the William D. Ford Federal Direct Loan Program will be mailed to the borrower at the address on the PLUS loan application. This Statement details all the terms and conditions of the Federal PLUS loan.
For more information regarding Federal Direct Loans, please click here.