WSU - Types of Aid: Federal Stafford Loans

Federal Stafford Loans

What are Federal Stafford Loans?

Federal Stafford Loans are federal loans that undergraduate and graduate students, enrolled at least half time, can borrow to pay for their educational expenses. Federal Stafford Loans must be repaid. Federal Stafford Loans are either subsidized or unsubsidized.

QUICK LINKS

How to Apply!

WSU's List of Lenders

Online Federal Stafford Loan Master Promissory Note

Loan Entrance Counseling

WSU Cost Estimator

Loan Repayment Chart

What is the difference between Federal Subsidized and Unsubsidized Stafford Loans?

A subsidized loan is awarded on the basis of financial need. The student won't be charged interest before repayment begins or during deferment periods. The federal government "subsidizes" (pays) the interest during these periods.

An unsubsidized loan is not awarded on the basis of need. The student will be charged interest from the time the loan is disbursed until it's paid in full. If the student chooses not to make interest payments and allows the interest to accrue (accumulate) while in school or during other periods of nonpayment, the interest will be capitalized. This means the interest will be added to the principal amount of the student's unsubsidized loan, and additional interest will be based on that higher amount.

What is required to borrow a Federal Stafford Loan?

• The student must meet the general eligibility requirements for federal student aid.

• The student must also be enrolled at least half-time [enrolled for a minimum of six (6) registered credit hours/quarter for undergraduates; four (4) registered credit hours/quarter for graduates].

NOTE: There is no review of student's credit history to borrow Federal Stafford Loans.

How much can a student borrow in Federal Stafford Loans?

The maximum amount students can borrow depend upon the student's grade level in school and the student's type: dependent undergraduate, independent undergraduate (or a dependent undergraduate whose parents are unable to get a Federal PLUS Loan), or a graduate student.

Annual Loan Limits for Federal Subsidized and Unsubsidized Stafford Loans

	Dependent Undergraduate Students	Independent Undergraduate Students	Graduate/Professional Students
Freshmen (0 to 44 credit hours earned at or transferred to WSU)	$5,500--No more than $3,500 of this amount may be in subsidized loans.	$9,500--No more than $3,500 of this amount may be in subsidized loans.
Sophomores (45 to 89 credit hours earned at or transferred to WSU)	$6,500--No more than $4,500 of this amount may be in subsidized loans.	$10,500--No more than $4,500 of this amount may be in subsidized loans.	$20,500--No more than $8,500 of this amount may be in subsidized loans.
Juniors/Seniors (90 credit hours or more earned at or transferred to WSU)	$7,500--No more than $5,500 of this loan amount may be in subsidized loans.	$12,500--No more than $5,500 of this loan amount may be in subsidized loans.
Total Amount of Federal Stafford Loan Debt Student Can Accrue	$31,000--No more than $23,000 of this amount may be in subsidized loans.	$57,500--No more than $23,000 of this amount may be in subsidized loans.	$224,000--No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit would include Federal Stafford Loans received for undergraduate study.

NOTE: The actual amount and type of Federal Stafford Loans awarded to a student depends upon the student's cost of attendance, other financial aid accepted by the student, and the student's financial need.

How do students apply for Federal Stafford Loans at Wright State University?

1. Submit FAFSA.

The student must first file a FAFSA .

2. If you plan to enroll Summer, go to WINGS Express and complete the Summer Aid Request

Logon to the WINGS portal and click on the WINGS Express icon. Enter your University ID and WINGS Express PIN. Click on "Student and Financial Aid" and then click on "Financial Aid and Scholarships". Click on "Summer Aid Request" and select the appropriate aid year. Indicate your enrollment plans for Summer.

3. Check WINGS Express for Outstanding Requirements and/or Award Notice.

If the student has been admitted to Wright State University and has no additional outstanding requirements on his/her Financial Aid and Scholarship Requirement link on WINGS Express, the Office of Financial Aid will post the student's Award Notice on WINGS Express at the scheduled time . To check WINGS Express for outstanding requirements, logon to the WINGS portal and click on the WINGS Express icon. Enter your University ID and WINGS Express PIN. Click on "Student and Financial Aid" and then click on "Financial Aid and Scholarships". Click on "Financial Aid and Scholarship Requirements" and select the appropriate aid year. NOTE: Click on "Requirement Messages" for additional information/links regarding your outstanding requirements.

4. Go to WINGS Express to View Award Notice.

5. Complete Loan Entrance Counseling and Federal Stafford Loan Master Promissory Note.
The Office of Financial Aid processes Federal Stafford Loan funds with the guarantee agency, Great Lakes Higher Education Corporation (GLHEC). GLHEC will require the student to complete Loan Entrance Counseling (one-time only) and a Federal Stafford Loan Master Promissory Note (MPN). Loan Entrance Counseling and the Federal Stafford Loan MPN can be completed online at FASTLoans. When completing the Federal Stafford Loan MPN, the applicant will be required to select a participating lender from which to borrow the loan funds.

What happens after student has completed the Federal Stafford Loan MPN?

The Office of Financial Aid will transmit to Great Lakes Higher Education Corporation (GLHEC) a school certification* for Federal Stafford Loan processing. Once GLHEC receives both the student's MPN and the school certification, GLHEC will process the loan. The student will receive a Notice of Guarantee from GLHEC.

* Please note, the Office of Financial Aid will begin transmitting school certifications to GLHEC on July 1, 2006 for all Fall Quarter 2006 loans.

How are Federal Stafford Loan monies applied to the student's fees?

Great Lakes Higher Education Corporation will disburse to Wright State University the student's Federal Stafford Loan proceeds in accordance to the student's Notice of Guarantee. The Office of the Bursar will release the Federal Stafford Loan disbursements received to the student's account as long as the student: (1) has completed Loan Entrance Counseling, if required; and, (2) is eligible for disbursement. The loan funds will be applied first to the student's tuition, fees, room and board, and other institutional charges permitted by the student. Any Federal Stafford Loan funds remaining, after being applied to the student's fees, will be mailed to the student by check or can be directly deposited in a checking or savings account of the student's choice.

What is the interest rate on Federal Stafford Loans?

For the 2008-2009 academic year (from July 1, 2008 to June 30, 2009) the interest rate for a Federal Stafford Loan is fixed at 6.8 percent (6.80%). However, undergraduate students have a fixed interest rate of 6 percent (6.00%) for Subsidized Stafford Loan funds only.

Students with subsidized loans will not be charged interest while they're enrolled in school at least half time [a minimum of six (6) registered credit hours/quarter for undergraduates; four (4) registered credit hours/quarter for graduates], during a grace period, or during authorized periods of deferment. Interest will accrue when students enter repayment or during authorized periods of forbearance.

Students with unsubsidized loans will be charged interest from the day the loan is disbursed until it's paid in full, including in-school, grace, deferment, and forbearance periods. You can pay the interest during these periods, or it can be capitalized.

Other than interest, are there other fees to get a Federal Stafford Loan?

Students will be charged a fee of up to four percent (4%), deducted proportionately from each loan disbursement. (Part of the fee is for insurance used to pay off loan defaults; the rest reduces the cost of the loan to the government.) Because of this deduction, the loan disbursements will be slightly less than the amount borrowed by the student.

When do students begin repaying a Federal Stafford Loan?

After students graduate, leave school, or drop below half time enrollment, they have a six-month grace period before they begin repayment. During the grace period on a subsidized loan, students do not have to pay any principal, and they won't be charged interest. During the grace period on an unsubsidized loan, students do not have to pay any principal, but they will be charged interest. As mentioned, students can either pay the interest or it will be capitalized. Great Lakes Higher Education Corporation (GLHEC) will send students information about repayment, and students will be notified of the date repayment begins. However, students are responsible for beginning repayment on time, even if they do not receive this information. Failing to make payments on your loan can lead to default. Students can access their Federal Stafford Loan account activity--including repayment information--from GLHEC's web site at www.mygreatlakes.com. Visit our Loan Repayment Chart for an example of typical payments for a Federal Stafford Loan repayment plan.

Is it ever possible to postpone repayment of a Federal Stafford Loan?

Under certain circumstances, students can receive a deferment or forbearance on their Federal Stafford Loan, as long as the loan is not in default. Students should contact Great Lakes Higher Education Corporation at 1-800-377-9095 or visit their web site at www.mygreatlakes.com for more information on deferments or forbearances available for Federal Stafford Loan borrowers.

As mentioned, no interest will accrue on subsidized loans during an authorized period of deferment, but will accrue on unsubsidized loans. For unsubsidized loans in deferment, students have the option of paying the interest as it accrues (accumulates) or it will be capitalized and the amount the student will have to repay will increase.

During authorized periods of forbearance, whether the loans are subsidized or unsubsidized, students will be charged interest. If students do not pay the interest as it accrues, it will be capitalized.

Deferment and forbearance are not automatic. Students must continue making scheduled payments until they're notified that the deferment or forbearance has been granted. Not making payments on the loan will have a negative effect on the student's credit rating, and the loan could go into default.