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William D. Ford Federal Direct Stafford Loan Program

Subsidized and Unsubsidized Federal Direct Stafford Loans are available to eligible students. Additional information can be found in the Linfield Catalog or at www.studentloans.gov. A loan is money you borrow and must pay back with interest, be sure you understand your options and responsibilities.

Process for new students:

  1. Complete your FAFSA: www.fafsa.gov
  2. Complete your Linfield ADP Application for Financial Aid (LAFA)
  3. Complete your Academic Plan with your Academic Advisor
  4. Submit additional documents, if requested, such as Verification documentation.  View missing documents on WebAdvisor
  5. Review your Award Letter sent to you via regular mail, and then log in to WebAdvisor to Accept or Reject the financial aid offered
    • If you would like to reduce the amount of financial aid, you will need to email our office at finaid@linfield.edu stating the amount you wish to receive. Please note disbursements must be in equal amounts per semester
  6. If you accept Federal Direct Stafford Loans:
  1. Maintain Satisfactory Academic Progress (SAP)

Process for continuing students:

  1. Complete your FAFSA: www.fafsa.gov
  2. Complete your Linfield ADP Application for Financial Aid (LAFA)
  3. Complete your Academic Plan with your Academic Advisor
  4. Submit additional documents, if requested, such as Verification documentation.  View missing documents on WebAdvisor
  5. Review your Award Letter in WebAdvisor, once you receive an email from the Office of Financial Aid notifying you it is available, in order to Accept or Reject the financial aid offered
    • If you would like to reduce the amount of financial aid, you will need to email our office at finaid@linfield.edu stating the amount you wish to receive. Please note disbursements must be in equal amounts per semester
  6. Maintain Satisfactory Academic Progress (SAP)

Interest Rates

Date of First Disbursement Fixed Interest Rate for Subsidized Undergraduate Loan Fixed Interest Rate for Unsubsidized Undergraduate Loan
7/1/14-6/30/15 4.66%* 4.66%*
7/1/13–6/30/14 3.86%* 3.86%*
7/1/12–6/30/13 3.40% 6.80%
7/1/11–6/30/12 3.40% 6.80%
7/1/10–6/30/11 4.50% 6.80%
7/1/09–6/30/10 5.60% 6.80%
7/1/08–6/30/09 6.00% 6.80%

*On August 9, 2013 President Obama signed a bill into law that changes the way interest rates are calculated.  Effective July 1, 2013 interest rates will be “variable-fixed” rates, meaning that each July 1, the loan will be based on the 10-year Treasury bill plus the following percentage add-ons:  2.05 percent for undergraduate Stafford (subsidized and unsubsidized).   The new loan will be a fixed interest rate for the life of the loan based on this new formula.  The bill includes a federal interest rate cap of 8.25% for undergraduate Stafford loans. Students do not have to re-complete their Master Promissory Notes, as this will be tracked on the back end of the loan process by their federal servicer.

For additional information about interest rates before 7/1/08 access www.studentloans.gov or www.nslds.ed.gov to determine interest rates for the time frame the student received their loan disbursements.

Subsidized Federal Direct Stafford Loan

The federal government subsidizes the interest on Subsidized Federal Direct Stafford Loans on behalf of students while they are enrolled at least half time in an eligible program at an eligible school and through their 6-month grace period. A law passed in December 2011 eliminates the interest subsidy during the 6-month grace period on any loans that had a first disbursement made on or after July 1, 2012, and before July 1, 2014. First-time loan borrowers, on or after July 1, 2013, are limited to receiving Subsidized Loans for a period not to exceed 150% of the length of their program.  Students will be notified on their FAFSA output document of their remaining loan eligibility.  Under certain conditions, if a student exceeds the 150% limit they may lose their student loan interest subsidy on their Subsidized Loans.

Unsubsidized Federal Direct Stafford Loan

Students are responsible to pay the interest on Unsubsidized Federal Direct Stafford Loans while they are in school. Interest begins to accrue immediately upon disbursement of the student loan. Students may choose not to pay their interest payments while they are in school, and the interest will be added to the unpaid principal amount of the student’s loan. This is called “capitalization,” and it can substantially increase the total amount repaid. Capitalization increases the unpaid principal balance of the loan, and students will be charged interest on the increased principal amount. Paying the interest while in school will save students some money in the long run.

Fees

Federal Direct Stafford Loans are subject to loan fees. Loan fees are set by the federal government and the amounts vary depending on when the loan was disbursed.

There is a 1% Loan Fee* applied to each Stafford loan taken off at the time of disbursement.

*Beginning March 1, 2013 for any loans first disbursed on or after March 1, 2013 the Loan Fee is 1.051%.

*Beginning December 1, 2013 for any loans first disbursed on or after December 1, 2013 and before October 1, 2014, the Loan Fee is 1.072%.

*Beginning October 1, 2014 for any loans first disbursed on or after October 1, 2014 and before October 1, 2015 the Loan Fee is 1.073%.

Annual Loan Maximums

Stafford Loans have annual loan limits, based on the student’s dependency status and grade level. Proration applies to all undergraduate loans. These loan limits below represent the total of all Subsidized and Unsubsidized Federal Direct Stafford Loans a dependent undergraduate student may borrow at each level of study, for a single academic year.

Independent Undergraduates (and dependent students whose parents can’t get Direct Parent PLUS Loan):

Grade Level Semester Hours Subsidized/Unsubsidized Additional Unsubsidized Supplemental Unsubsidized Total Annual Maximum
Freshman 0-29 $3,500 $4,000 $2,000 $9,500
Sophomore 30-61 $4,500 $4,000 $2,000 $10,500
Junior 62-93 $5,500 $5,000 $2,000 $12,500
Senior 94+ $5,500 $5,000 $2,000 $12,500

Dependent Undergraduates:

Grade Level Semester Hours Subsidized/Unsubsidized Additional Unsubsidized Supplemental Unsubsidized Total Annual Maximum
Freshman 0-29 $3,500 - $2,000 $5,500
Sophomore 30-61 $4,500 - $2,000 $6,500
Junior 62-93 $5,500 - $2,000 $7,500
Senior 94+ $5,500 - $2,000 $7,500

Repayment Information Regarding Stafford Loans

After the student graduates, leaves school or drops below half-time enrollment, the student will have a six-month grace period before having to begin repayment. Students are required to complete Exit Counseling at www.studentloans.gov upon leaving Linfield.

Students will be contacted by their servicer during their grace period regarding their repayment. Students will be automatically placed in the Standard Repayment Plan, unless they choose to request a different plan. With the Standard Repayment Plan, students will pay a fixed amount each month until their loans are paid in full. The student’s monthly payments will be at least $50, and they will have up to 10 years to repay their loans. It is important to repay student loans, failure to repay them results in default and has serious consequences. Students should track their loan history, and can do so by accessing the National Student Loan Data System to retrieve their loan information. This website will allow students to see ALL of their federal aid that they have received from all schools they have attended. Students will need their federal PIN to access this site, www.pin.ed.gov. Linfield students are also encouraged to active their SALT account at www.saltmoney.org/LINFIELD, in order to upload their student loans from NSLDS into SALT in order to take advantage of the loan dashboard, and loan repayment management options.

The student’s monthly payment under the Standard Repayment Plan may be higher than it would be under the other plans because their loans will be repaid in the shortest time. For that reason, having a 10-year limit on repayment, students may pay the least interest.

To calculate estimated loan payments, go to the Standard Repayment Plan calculator.

Using the calculator above, with an interest rate of 6.8% and total Stafford debt of $21,000 an example repayment schedule would be:

Calculator results:

Interest Rate:

6.8 %

Loan Amount:

$ 21,000.00

Repayment Plan

Term
(in Months)

Initial Monthly
Payments

Total Payments
(Interest+Principal)

Standard

120

$ 241.67

$ 29,000.40

Graduated
(see Note 1 below)

120

$ 165.94

$ 30,566.67

Extended

(see Note 2 below)

*

*

*

Note 1: This is an estimated monthly repayment amount for the first two years of the term and total loan payment. The monthly repayment amount will generally increase every two years, based on the gradation factor in the graduated repayment rules.

Note 2: * Extended repayment plans are only available to students who borrow amounts greater than $30,000.00.

To learn more about repayment plan options, such as Standard, Extended, Graduated, Income-Contingent or Income-Sensitive, Income-Based, Pay As You Earn (PAYE), and Consolidation visit www.studentloans.gov.

Terms and Conditions

Student’s terms and conditions of the loan are located with the Master Promissory Note, which students are encouraged to sign online at www.studentloans.gov. View a sample of the Master Promissory Note (MPN), which includes borrower rights and responsibilities as well as the terms and conditions.

Default

Default (failing to repay your loan) is defined in detail in the Terms and Conditions section of the MPN. Serious consequences occur if a student defaults:

  • The United States Department of Education (ED) will require you to immediately repay the entire unpaid amount of your loan
  • ED may sue you, take all or part of your federal and state tax refunds and other federal or state payments, and/or garnish your wages so that your employer is required to send ED part of your salary to pay off your loan
  • ED will require you to pay reasonable collection fees and costs, plus court costs and attorney fees
  • ED will report your default to national consumer reporting agencies
  • You may be denied a professional license
  • You will lose eligibility for other federal student aid and assistance under most federal benefit programs
  • You will lose eligibility for loan deferments