Federal Loan Programs
Saint Mary-of-the-Woods participates in the Federal Loan Program. The Federal Stafford, Unsubsidized Stafford, and PLUS loans are low-interest loans designed to provide students and parents with additional funds for college. This financial aid (Federal Loans) must be repaid.
Quick Links
- Subsidized Loans
- Unsubsidized Loans
- Loan Eligibility (Federal)
- Loan Eligibility (PLUS)
Subsidized Loans
Federal subsidized loans are based on financial need. The Federal government pays the interest during in-school, grace, and deferment periods. Need for subsidized Stafford loans is determined by the Expected Family Contribution (EFC) as determined by the FAFSA data.
Unsubsidized Loans
Federal Unsubsidized Loans are not based on financial need. The federal government does not pay the interest for Federal Unsubsidized Loans. Students may choose to defer interest payments until repayment begins; however, the student is responsible for all interest that has accrued. The accrued interest automatically capitalizes to the loan principal.
Federal PLUS Loans are not based on financial need. The federal government does not pay the interest on the Federal PLUS loans. Parents begin repaying the loan, principal and interest, 60 days after the final loan disbursement is made. Interest on the PLUS loans begins to accumulate at the time the first disbursement is made.
Loan Eligibility (Federal Loans)
Below is a list of the factors that affect Federal Loan eligibility:
- Full-time or half-time, enrolled dependent and independent students.
- U.S. citizen or permanent resident
- Enrolled in degree-granting program
- Graduate students enrolled on a provisional admission status*
* Graduate students with provisional admissions status may receive loans for one 12 month period before being granted full admission.
Non-degree seeking and special students are ineligible for the Federal Loan Program.
Loan Eligibility (PLUS Loans)
A parent may borrow on behalf of a dependent undergraduate student who is enrolled full-time or half-time. The parent borrower will be required to pass a credit check. The PLUS Loan program is limited to U.S. citizens and permanent residents. The student must be enrolled in a degree-granting program.
Borrowing Limits
Graduate Students - may borrow up to the total cost of school or a maximum of $18,500 each academic year (of which at least $10,000 will be in unsubsidized loans). Note: the amounts listed are the maximum yearly limits, however a student may not borrow more than the cost of education minus any other financial aid received.
Dependent Undergraduate Student
- $3,500 - Freshman
- $4,500 - Sophomore
- $5,500 - Junior, Senior, or 5th year undergraduate*
Independent Undegraduate Student (or dependent undergraduate student whose parent is unable to borrow a PLUS Loan)
- $7,500 - Sophomore* (of which at least $4,000 will be unsubsidized loans)
- $10,500 - Junior, Senior, or 5th year undergraduate* (of which at least $5,000 will be unsubsidized loans)
Parents (PLUS Loans) - The yearly limit on a PLUS Loan is the student's cost of attendance minus any other financial aid received. For example, if the student's cost of attendance is $12,000 and the student is receiving financial aid in the amount of $6,000, the parent could borrow up to $6,000 to apply towards the students education.
Students Seeking 2nd Bachelor's Degree - Students in the second bachelor's degree program may borrow at undergraduate maximum loan limits (see below).
* Enrolled in a program of study that is at least a full academic year. For periods of undergraduate study that are less than a full academic year, the loan amount a student may borrow will be less than the amounts listed above.
Cumulative Borrowing Caps
The total cumulative subsidized Stafford, unsubsidized loans, and FFEL Program Loan amounts are:
- $23,000 as a dependent undegraduate student
- $46,000 as an independent undergraduate student (with a maximum of $23,000 in subsidized Stafford loans)
- $138,500 as a graduate or professional student (with a maximum of $65,500 in subsidized Stafford loans) Note: graduate debt limit includes outstanding loans from undergraduate programs.
Undergraduate loan limits are up to $23,000 subsidized or unsubsidized for dependent students; $46,000 in combined total for independent students ($23,000 in subsidized + $23,000 in unsubsidized).
Interest Rates
The interest rate for subsidized Stafford and Unsubsidized Loans is 6.8% (loans disbursed after July 1, 2006). The interest rate for PLUS direct loans is 8.5% (loans disbursed after July 1, 2006). Please visit Salliemae Servicer for more information on educational loan interest rates.
Fees and Charges for Federal Loans
The Federal loan program deducts a default fee from each disbursement of 1% for all loans. This fee goes to the federal government to help offset the cost of these loans. Some lenders may charge an additional 1% fee. Please contact Salliemae for more information about lender fees.
Loan Disbursal
Federal loans are disbursed at the beginning of each term. Students attending only one semester per academic year will have their loans disbursed in one disbursement.
Before loans can be disbursed, first-time borrowers at SMWC are required to complete the online Entrance Interview. Complete this interview at http://opennet.salliemae.com. Additionally, students should complete their Master Promissory Note (MPN) on the same website for their Stafford and/or PLUS loans. You must complete both the Entrance Interview and the MPN before the loans can be processed and disbursed.
Refunds / Loans disbursed to the student - Any overage amount (funds exceeding the cost of attendance) will be credited to the students account. This credit will be refunded to the student a few weeks into the term. Distance education (WED) students will receive two disbursements (refunds). The first disbursement is 30 days after the term begins and the second is 60 days after the term begins.
Repayment Options/Plans
Standard Repayment Plan: Requires fixed monthly payments of at least $50 per month for up to 10 years. The repayment period depends of the loan amount borrowed.
Extended Repayment Plan: Allows for repayment to extended from 12 to 30 years, with monthly payments of at least $50 per month.
Graduated Repayment Plan: Monthly payments begin at a low rate and increase every two years. The monthly payments must start at least half of what you would repay under the Standard Repayment Plan. The repayment period will vary from approximately 12 to 30 years, depending on the total amount borrowed.
Income Contingent Repayment Plan: Monthly payments are based on adjusted gross income (AGI) and the total amount borrowed. Payment amounts are based on each years income and are adjusted as income falls or raises. The monthly payments will not exceed 20 percent of discretionary income and the repayment period may not exceed 25 years. For more information of repayment options, contact your loan servicer which will be one of the following:
- Salliemae at 1-888-272-5543
- Indiana Secondary Market (ISM) at 1-888-476-2002
- Nelnet at 1-888-486-4722.
Repayment of Federal Loans begins six months after either graduation, when a student leaves school, or drops below half-time enrollment. The length of repayment and monthly payment amounts depends on the outstanding loan balance, the interest rate and repayment policies. Federal Unsubsidized Loan borrowers with deferred interest will have the interest capitalized at the end of the in-school or grace period. A student has only one six month grace period in which to begin repayment of their loans. If a student stops attending for six months or more and then returns to school, the student has already used their grace period and payment on their loans begins immediately after graduation.
Consolidation
Federal Stafford and Unsubsidized Stafford Loans can be consolidated through the Consolidation Loan Program. This consolidation program will allow you to have all your loans held by one servicer and make only one payment on all consolidated loans. If you have questions concerning the Federal Consolidation Loan Program, contact your loan servicer.
Payment Deferment
Payments may be deferred if the borrower enters into a deferrable situation and request deferment of payment by submitting appropriate documentation to the loan servicer. Deferrable situations may include, but are not limited to:
- Active duty in the U.S. armed forces*
- Study in an approved graduate fellowship program or in an approved rehabilitation training program for the disabled.
- Unable to find full-time employment (only on pre-July 1, 1993 loans)
- Economic hardship**
- Pursuing half-time study at a postsecondary school
* Contact lender for specific information
** Many Peace Corps volunteers will qualify for a deferment based upon economic hardship.
To defer a loan, simply contact the Office of the Registrar at (812) 535-5269 and request that a verification of enrollment (VOE) be sent to the lender. We participate in the National Clearing House so enrollment information is available electronically to the lenders.
