WILLIAM D. FORD FEDERAL DIRECT STAFFORD LOAN PROGRAM
By completing a financial aid application, you will be considered for the William D. Ford Federal Direct Stafford Loan Program. This loan is commonly referred to as the Federal Direct Loan Program.
There are two types of Federal Direct Stafford Loans for students:
Federal Subsidized Direct Loan: Your eligibility is based on your financial need and your academic level (see charts below). You don’t have to make any payments until six months after you graduate or cease to be enrolled at least half time. The government pays the interest while you are in school and during your six-month grace period.
Federal Unsubsidized Direct Loan: Your eligibility is not based on financial need. You may borrow the cost of education minus all other financial aid you receive, up to the amount allowed for your academic level (see charts below). You have two choices for paying interest: you may pay it while you are enrolled full time, or it can accrue and become part of the principal that you will owe. You begin making payments six months after you graduate or cease to be enrolled at least half time.
Interest Rate and Origination Fee
The interest rate on both the Federal Subsidized and Unsubsidized Direct Loan is currently fixed at 6.8% until July 1, 2008. After July 1, 2008, the interest rate for the Federal Subsidized Loan to undergraduate students will be reduced to 6.0 percent for loans originated between July 1, 2008, and June 30, 2009.
There is also an origination fee based on the amount of the total loan; this amount is deducted from your loan before you receive the funds. Currently, this fee is 1%; it will reduce on July 1, 2008.
Loan Requirements
If you are a first-time Federal Direct Stafford Loan borrower, you must complete an Electronic Master Promissory Note (EMPN) and complete electronic Pre-Loan Entrance Counseling before you can receive funds.
Loan Maximums
The maximum Federal Direct Stafford Loan amounts available vary according to academic level and dependency status. Please see the tables below for more information.
|
Dependent Undergraduate Students | ||||
|
Academic Level |
Maximum Federal Direct Stafford Loan Amount |
New as of July 1, 2008 Additional Unsubsidized Amount |
New annual maximum amounts a dependent undergraduate may borrow in combined Subsidized and Unsubsidized Direct Stafford Loan. | |
|
Freshman |
$3,500 |
$2,000 | $5,500 | |
|
Sophomore |
$4,500 |
$2,000 | $6,500 | |
|
Junior/Senior |
$5,500 |
$2,000 | $7,500 | |
|
Independent Undergraduate Students | |||||
|
Academic Level |
Maximum Federal Direct Subsidized Amount |
Unsubsidized Amount |
New as of July 1, 2008 Additional Unsubsidized Amount |
New annual maximum amounts an independent undergraduate may borrow in combined Subsidized and Unsubsidized Direct Stafford Loan. | |
|
Freshman |
$3,500 |
$7,500 |
$2,000 | $9,500 | |
|
Sophomore |
$4,500 |
$8,500 |
$2,000 | $10,500 | |
|
Junior/Senior |
$5,500 |
$10,500 |
$2,000 | $12,500 | |
Useful publication: Direct Loan Basics for Students
FEDERAL LOANS FOR PARENTS OF DEPENDENT UNDERGRADUATE STUDENTS
William D. Ford Federal Direct Parent Loan for Undergraduate Students (PLUS)
PLUS is a federal loan program for parents of dependent undergraduate students. Generally, parents are eligible if they have a good credit history, are not in default on a federal student loan, and meet the other eligibility requirements outlined in the loan application. Parents may borrow up to the amount of the cost of education minus other financial aid received, including any other educational loans. The interest rate is fixed at 7.9%. In addition, the borrower is charged an origination fee of 4% of the amount of the total loan; this amount is deducted from the loan before the student receives the funds.
Loan Requirements
To begin the PLUS Loan application process, you and your parent must complete and submit the PLUS supplement form to the Office of Financial Aid. Your parent(s) must also complete an Electronic Master Promissory Note (EMPN) before you can receive funds. Generally, the PLUS EMPN needs to be completed only once, provided the parent borrower remains the same from year to year.
PLUS loans are not automatically renewed. You and your parent must complete a PLUS Loan supplement every year.
Receiving Federal Loan Funds as a Disbursement
Your Federal PLUS Loan funds will be disbursed directly to your university student account. Funds are first used to pay tuition and other university expenses, but any leftover money can be used for other educational expenses. In general, you will receive an equal amount for each term for which your loan was approved. Your parent borrower will receive a disclosure statement from the Direct Loan Servicing Center that lists the dates and amounts for each Direct PLUS Loan that you will receive. If you are enrolled less than half time in any term, you cannot receive Federal Loan funds for that term.
Useful publications: Direct Loan Basics for Parents and Frequently Asked Questions about PLUS
FEDERAL PERKINS LOAN
DePaul provides loans to undergraduate students through the Federal Perkins Loan program. These funds are awarded to exceptionally needy students and are based upon the availability of funds. Annual awards generally range from $500 to $4,000.
The interest rate on this loan is fixed at 5%. No interest payments or principal payments are due until you are no longer enrolled at least half time and your nine-month grace period has expired.
This loan carries some specific cancellation provisions, including cancellations for students teaching in a designated low-income area or serving in the Peace Corps.
Loan Requirements
If you are a first-time Federal Perkins Loan borrower you must complete the Electronic Master Promissory Note (EMPN) process.
While you need to complete the Federal Perkins EMPN only once, if you are awarded a Federal Perkins Loan in a subsequent year, you will need to complete a Perkins Loan Reaffirmation.
RECEIVING FEDERAL LOAN FUNDS
Your federal student loan funds will be disbursed directly to your university student account. Funds are first used to pay tuition and other university expenses, but any leftover money can be used for other educational expenses. In general, you will receive an equal amount for each term for which your loan was approved. If you are enrolled less than half time in any term, you cannot receive federal loan funds for that term.
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