Federal Student Loan Information

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Federal Stafford Loan

The Federal Stafford Loan allows students enrolled at least half time to borrow money at low interest for educational expenses. There are two types of Federal Stafford Loans: 1) Federal Subsidized Stafford Loans, and 2) Federal Unsubsidized Stafford Loans. The Federal Subsidized Stafford Loan is need-based and the interest is subsidized (paid) by the federal government while the student is in school and during the six month grace period. The unsubsidized loan is not need-based and was created for borrowers who do not qualify for federal interest subsidies. The Federal Government does not pay any of the interest for these loans. The student either pays the interest while in school and during the six-month grace period or it is added to the balance of the loan.

  1. Federal Stafford Loan interest rates are fixed at 3.86% for Undergraduates and 5.41% for Graduate Students (beginning July 1, 2013) for all new Stafford loans. There is also a loan origination fee of 1.051% that is deducted from each delivery of loan proceeds.This fee is passed on to the federal government to help reduce the government’s cost of supporting these low-interest loans. Repayment begins six months after graduation or termination of at least half-time enrollment.
  2. By completing a FAFSA and providing all requested documentation, you will provide enough information to be awarded financial aid. Receipt of your Award Letter from the OFA indicates eligibility for a Federal Stafford Loan but does NOT mean the loan is processed and approved. You must complete the Loan Request Form that is enclosed in the award letter and return it to the OFA by July 1st to ensure that your loan will be processed prior to the fee payment deadline. Once your Loan Request Form is processed, instructions for completing a Master Promissory Note may be mailed to you if you are a first time borrower. The loan is not approved and the funds are not available for disbursement until the Master Promissory Note is completed and verified.
  3. Having your eligibility determined for a Federal Stafford Loan does not commit you to accepting the loan or the amount you are offered (you may borrow less than your full eligibility). If you do choose to accept these loan funds, you are obligated to repay the amount you borrow, plus interest.
  4. Federal Stafford Loan maximums are $5,500 per year in the freshman year, $6,500 per year in the sophomore year, $7,500 per year in the junior and senior years, with a $31,000 cumulative total of Subsidized and Unsubsidized loans for all undergraduate study. Graduate students may borrow $20,500 per year. The cumulative total Federal Direct Subsidized Stafford/Ford Loan amount for undergraduate and graduate study is $138,500.
  5. Independent students and dependent students, whose parents are denied a PLUS Loan, can borrow an additional Federal Unsubsidized Stafford Loan. The maximums for these students are $4,000 per year in the freshmen and sophomore years and $5,000 per year in the junior and senior years not to exceed the COA. NOTE: Dependent students whose parents are denied a Federal Parent (PLUS) Loan must submit a signed PLUS loan Denial Form.
  6. Once the loan is processed, the funds will be disbursed at the beginning of each semester that is included in the loan period.
  7. The yearly maximum for the Federal Stafford Loan is available for Fall, Spring, and Summer Semesters. If the maximum loan limit has been received during Fall and Spring Semesters, students will not be eligible to borrow additional funds for the Summer Semester. The following Fall Semester would be the next term loan funds would be available. Students can request less on the Federal Direct Stafford Loan application for Fall and Spring and then request the remaining eligibility on the Summer application. For example:

    Dependent Freshman
    $5,500 12-Month Maximum
    Fall Semester
    $2750
    Spring Semester
    $2750
    Summer Semester
    $0


    Dependent Freshman
    $5,500 12-Month Maximum
    Fall Semester
    $1833
    Spring Semester
    $1833
    Summer Semester
    $1834
  8. Student loans for those undergraduate students who graduate during the Fall term will be pro-rated if the student is not enrolled full-time (12 hours). For example your loans will be prorated to 25% of the annual limit for 6 hours and 37.5% for 9 hours.
  9. If you receive a Federal Stafford Loan or your parent receives a Federal Parent (PLUS) Loan you must maintain at least half-time enrollment at all times. Dropping below half-time will result in subsequent loan disbursements being canceled. If you re-enroll at least half-time you must contact the OFA to re-apply for the loan(s).

Loan Counseling

If you are a new borrower or transferring to VSU, you MUST complete loan counseling. You may complete loan counseling online at the Student Loans website.