Federal Direct Stafford Loan Program
Federal William D. Ford Direct Stafford Loan Program. Loans are available to US citizens or eligible non-citizens from both subsidized and unsubsidized programs. Recipients must be making satisfactory pursuit and progress toward a degree and have a minimum 2.0 grade point average (GPA) as undergraduate students, and minimum 3.0 grade point average (GPA) as Graduate students.
Students whose loan application has been approved will be mailed a disclosure statement containing information about the amount and type of loan approved, as well as instructions on how to complete an electronic promissory note. Incomplete and inaccurately completed promissory notes will not be accepted and fund disbursement delayed. Loan funds are disbursed about six weeks after the promissory note is accepted. Federal regulations require two disbursements for each approved loan.
Note:The amount a student may borrow will depend on their year in college, dependency status, budget and other financial aid received.
The academic year is organized Summer/Fall/Spring. If you are planning to attend in the fall and spring of the current academic year and for the summer the following year, your summer loan request should be submitted on next year's loan application. If you submit a summer loan application but do not enroll for the summer semester, it will prevent payment of the fall and spring disbursements. Please notify the Financial Aid Office if you have submitted a summer application and either do not enroll or enroll for less than 6 credits. The office will adjust your request to allow subsequent disbursements to be processed..
There are two types of Direct StaffordLoan, Subsidized and Unsubsidized. To qualify for a Subsidized Loan, a student must demonstrate financial need. Interest does not accrue on a Subsidized Direct Loan as long as you maintain half time status. Interest begins to accrue and the loan will enter repayment six months after you drop below half time status. You are required to complete exit counseling if you graduate, transfer or drop below half time status.
The Unsubsidized Direct Stafford Loan is available to students who do not demonstrate financial need . Interest will begin to accrue as soon as the loan is disbused. You may pay the interest while you are enrolled or have it capitilized. We recommend that you try and pay the interest if you can, to keep your total debt as low as possible.
Maximum annual limits for Subsidized and Unsubsidized Direct Stafford Loans
Effective July 1, 2008
Maximum Loans for Dependent Students & Maximum Loans for Independent Students
Loans for Dependent Students |
|||
The amount you are eligible to borrow each academic year |
Maximum Subsidized Loan* |
Additional Unsubsidized Loan |
Total Loan (combined subsidized and unsubsidized) |
1st Year |
$3,500 |
$2,000 |
$5,500 |
2nd Year |
$4,500 |
$2,000 |
$6,500 |
3rd 4th and 5th Year (BA Programs only) |
$5,500 |
$2,000 |
$7,500 |
Loans for Independent Students |
|||
The amount you are eligible to borrow each academic year |
Maximum subsidized Loan* |
Additional Unsubsidized Loan |
Total Loan (combined subsidized and unsubsidized) |
1st Year |
$3,500 |
$6,000 |
$9,500 |
2nd Year |
$4,500 |
$6,000 |
$10,500 |
3rd 4th and 5thYear (BA Programs Only) |
$5,500 |
$7,000 |
$12,500 |
Graduate and Profesional Students |
$8,500 |
$12,500 |
$20,500 |
*Subject to eligibility
Maximum loan amounts
- Dependent student: The career maximum of subsidized and unsubsidized combined undergraduate loans is $31,000 ($23,000 maximum in subsidized loans).
- Independent student: The career maximum undergraduate amount is $57,500 ($23,000 maximum in subsidized loans).
- Graduate and professional student: The career amount maximum is $138,500 ($65,500 maximum in subsidized).
Maximum for Subsidized Direct Stafford loans
- Cost of Attendance
- - Expected Family Contribution
- - Estimated Financial Assistance
- = Maximum Loan Amount
Maximum for Unsubsidized Direct Stafford and PLUS loans
- Cost of Attendance
- - Estimated Financial Assistance
- = Maximum Loan Amount
Example of subsidized loan eligibility
Let's say you are a dependent student and in your 3rd year of college. Your total cost of attending college is $10,000, which includes: tuition, fees, books, supplies, transportation, lunch, and personal expenses. Your expected family contribution determined from your FAFSA is $3000 and your total financial aid from grants and scholarships totals $2,000. You have expenses not met of $5000 ($10,000-$3,000-$2,000=$5,000). You could get a subsidized loan for the portion of expenses that were not met which is $5000. If you still need additional money to cover costs, you could receive a maximum of $500 in an unsubsidized loan. You could not exceed $2,500 in an unsubsidized loan since the maximum a 3rd year student could borrow in federal direct loans is $7,500.
- $10,000 Cost of Attendance (COA)
- -$3,000 Expected Family Contribution (EFC)
- -$2,000 Financial Aid
- =$5,000 Portion not met
Loans
- $5,500 Maximum Subsidized loan
- +$2,000 Maximum Unsubsidized loan (replaces part of your EFC)
- =$7,500 Maximum Direct loan
A dependent student's maximum eligibility, whether it subsidized or a combination of subsidized and unsubsidized loans, cannot exceed the amounts shown above. Independent students, however, are eligible to borrow additional funds from the Unsubsidized Stafford Loan program. In cases where the parents of the dependent student are denied eligibility for the Parent Loan for Undergraduate Students (PLUS) due to a negative credit history, the dependent student may borrow additional funds from the unsubsidized loan program. Student borrowers do not need a co-signer and there is no credit check done by the federal government.
Things you need to know if you borrow a Federal Direct Stafford Loan:
- The federal government charges all borrowers an origination fee of two (2.0) percent of the amount borrowed at the time the loan is disbursed. This is in addition to interest charges.
- While pursuing an undergraduate degree, you can borrow a maximum of $31,000 as a dependent student and a maximum of $57,000 as an independent student.
- Before loan funds may be disbursed you must complete an entrance interview. This interview is usually done on-line and consists of providing loan borrowers with extensive information regarding the loan's terms and conditions.
- Most colleges disburse the funds once a semester unless you are scheduled to register for only one semester in the academic year. In that case the loan will be disbursed in two equal payments. Colleges have the option of disbursing a loan in up to 20 payments depending on the college's policy and the student's needs.
- A federal Student Loan Ombudsman office is available for assistance with loan problems at 1-877-557-2575 or by writing to: Office of the Ombudsman, Student Financial Assistance, US Dept. of Education, Fourth Floor, 830 First Street, NE, Washington, DC 20202-5144.
Frequently Asked Questions
How do I apply for a Stafford Loan?
The same way you do the other federal student aid, by completing the Free Application for Federal Student Aid (FAFSA). You will need to submit a loan request form to your CUNY college to get a Stafford/Direct loan processed. You will also need to sign a promissory note, a binding legal document that states you agree to repay your loan according to the terms of the note.
Things you need to know if you borrow a Federal Stafford Loan:
- The federal government charges all borrowers an origination fee of two (2.0) percent of the amount borrowed at the time the loan is disbursed. This is in addition to interest charges.
Loan
Entrance Interview - Required for all Direct Loan applicants who have not previously borrowed at Baruch. Entrance counseling will require an electronic signature. You may use the same PIN that you used to sign you FAFSA to sign your entrance interview.
- Loan
Exit Interview -
Prior to graduating or leaving college, borrowers are required to complete an exit counseling session. This online exit counseling session has been created to make sure that you understand your rights and responsibilities as a Direct Loan borrower.
This online exit counseling session will take about 30-40 minutes to complete. Exit counseling will require an electronic signature. You may use the same PIN that you used to sign your FAFSA to sign the exit interview.
