Stafford & PLUS Loans
Saint Mary-of-the-Woods College participates fully in the Federal Loan Program. The Federal Stafford, Unsubsidized Stafford, and the PLUS loan programs are low-interest loans designed to provide students and parents with additional funds for college. This type of financial aid (federal loans) must be repaid.
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Loan details and eligibility
Borrowing limits and interest
Receiving loan money / repayment
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.
Stafford Loan Eligibility
The following factors affect Federal (Stafford) Loan eligibility:
- Full-time or part-time student status (number of credit hours enrolled)
- Dependent or independent student status (reliance upon parents financial resources)
- U.S. citizen or permanent resident
- Enrollment in a degree-granting program
- Graduate students enrolled on a provisional admission status*
* Gradute students with provisional admission 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.
PLUS Loan Eligibility
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.
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. Like all credit, student loans should be used responsibily; failure to repay loans will have a negative impact on your credit score.
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).
Dependent Undergraduate Students
- $3,500 - Freshman year
- $4,500 - Sophmore year
- $5,500 - Junior, Senior, and 5th year undergraduate*
Independent Undergraduate Students (or dependent undergraduate students whose parent is unable to borrow a PLUS Loan)
- $7,500 - Freshman or Sophmore (of which at least $4,000 will be unsubsidized loans)
- $10,50 - 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 teh student is receiving financial aid in the amount of $7,000, the parent could borrow up to $5,000 to apply towards the students education.
Students seeking a second bachelor's degree - Students in a second bachelor's degree program may borrow at undergraduate maximum loan limits (shown above).
* Enrolled in a program of study that is at least a full academic year. For periods of undergraduate study 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 Federal Family Education Loan (FFEL) Program amounts are:
- $23,000 as a dependent undergraduate student.
- $46,000 as a 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.
Interest Rates
Stafford Loans - The interest rate for subsidized Stafford and unsubsidized loans is 6.8% (as of 6/2009 for loans dispursed after July 1, 2006).
PLUS Loans - The interest rate for PLUS direct loans is 8.5% (as of 6/2009 for loans dispursed after July 1, 2006).
Please visit Salliemae 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.
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 are required to complete the online Enterance 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 loan funds can be processed and disbursed.
View instructions for completing the MPN and Entrance Interview.
Refunds / Loan 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 students a few weeks into the term/semester. Distance education (Woods External Degree/Woods Online) students will receive two disbursement (refunds) - 30 days and 60 days after the term/semester 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 on the loan amount borrowed.
Extended Repayment Plan: Allows for the repayment to extend from 12 to 30 years, with monthly payments of at least $50.
Graduate Repayment Plan: Monthly payments begin at a low rate and increase every two years. The monthly payments must start at 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 enteres into a deferrable situation and request deferment of payment by submitting appropriate documentation to the loan servicer.
Deferrable situations 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 postsecondary school
*Contact lender for specific information.
** Many Peace Corps volunteers will qualify for deferment based upon economic hardship.
