What are Stafford Loans?
Stafford Loans - Federal Stafford Loan is a long term loan with a fixed interest rate. The interest rate on these loans for undergraduate students is 6.0% if subsidized (interest paid by the Federal Government) or 6.8% for graduate students and for undergraduates borrowing the unsubsidized loan.
Loan repayment begins six months after you complete the program, or drop below half time, which at Pacific Lutheran University, is six credits for undergraduates, four for graduate students. If you are borrowing the Federal Stafford Loan for the first time, you are required to complete an entrance interview prior to receiving your loan proceeds. Loan proceeds are disbursed at the beginning of each semester and the loan is evenly divided over the loan period (number of semesters you will be enrolled at least half time) during the academic year. Loan proceeds are electronically transmitted to the university and posted to your university student account and are applied against university charges for the semester. If your loan amount, when disbursed, exceeds your current university charges and creates a credit balance on your account, you may request the balance to be issued to you in the form of a check by completing a Refund Request Form at the Student Services Center. Refund checks are produced weekly and are available every Friday at the Business Office.
After you have accepted your Federal Stafford Loan on your financial aid award letter, the financial aid office will create a loan application that is transmitted to your lender electronically. After you have accepted your loan, you may complete an electronic loan application at your lender's web site. A link to our primary lenders' web sites can be found on the Lender List. If you choose not to use e-signature and the on-line application process, your lender will mail to you a paper promissory note/application. Once your lender receives your completed promissory note/application, they will send your loan proceeds via EFT to us and we will post the funds to your account, as described above.
Deferring Interest
Depending on the financial need of the student, Stafford Loans can be subsidized (interest paid by the Federal Government) or unsubsidized.
Subsidized
This loan is awarded on the basis of financial need. The student will not be charged any interest before they begin repayment or during authorized periods of deferment. The federal government"subsidizes" the interest during these periods. Interest is 6.0% for undergraduate students and 6.8% for graduate students.
Unsubsidized
This 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 allows the interest to accumulate while in school or during other periods of nonpayment, it will be capitalized, that is, added to the principal amount of your loan, and additional interest will be based on that higher amount. Interest on the unsubsidized loan is 6.8%.
Who is eligible?
In most circumstances if you are a U.S. Citizen or in the United States on a Permanent Visa status, have been admitted to the university and enrolling at least half-time, you will be eligible for Stafford Loans.
How do you apply?
To apply for a Stafford loan you must first submit a FAFSA form (remember to include PLU's school code 003785). Upon receiving your FAFSA information from the federal government, PLU will compile an award letter. If you are awarded a Stafford loan then you will need to choose a lender for the loan and complete the loan application (either hardcopy or electronically). In addition, first time borrowers must complete an Entrance Interview, which can be completed on-line at www.mapping-your-future.org.
How much can I borrow?
The amount that you can borrow depends on your class standing, dependency status, and whether you are an undergraduate or graduate student. The following annual limits are effective July 1, 2008.
Dependent Undergraduate Student
- $5,500 - First year student, with up to $3,500 subsidized by the federal government
- $9,500 – First year student whose parent has been denied the Federal Parent Loan, with up to $3,500 subsidized by the federal government
- $6,500 - Second year student, with up to $4,500 subsidized by the federal government
- $10,500 - Second year student whose parent has been denied the Federal Parent Loan, with up to $4,500 subsidized by the federal government
- $7,500 – Third and Fourth year students, with up to $5,500 subsidized by the federal government.
- $12,500 – Third and Fourth year students whose parent has been denied the Federal Parent Loan, with up to $5,500 subsidized by the federal government.
Independent Undergraduate Student
- $9,500 - First year student, with up to $3,500 subsidized by the federal government.
- $10,500 – Second year student, with up to $4,500 subsidized by the federal government
- $12,500 - Third and Fourth year students, and post-BA students in Teacher Certification program, with up to $5,500 subsidized by the federal government
Graduate students
- $20,500 - Each academic year, with up to $8,500 subsidized by the federal government
