A loan is borrowed money and must be repaid with interest, be sure to explore and understand all options and responsibilities.
Process for students borrowing the first time:
Annual process for students who have previously borrowed within the last 12 months:
|Date of First Disbursement||Fixed Interest Rate for Subsidized
|Fixed Interest Rate for Unsubsidized Undergraduate Loan|
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 while students are enrolled at least half time in an eligible program at an eligible school, and through the six-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 for paying the interest on Unsubsidized Federal Direct Stafford Loans while they are enrolled in school. Interest begins to accrue immediately upon disbursement of the student loan. Students may choose not to make interest payments while they are in school, and the interest will be added to the unpaid principal amount of the student’s loan. Students will be charged interest on the increased amount. This is called “capitalization,” and it can substantially increase the total amount repaid. Paying the interest while in school will save students some money in the long run.
Federal Direct Stafford Loans are subject to loan fees set by the federal government. Fees 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. The Budget Control Act of 2011 (the sequester law) remains in effect, sequester-required changes to the loan fees are as follows:
* Beginning October 1, 2016 for any loans first disbursed on or after October 1, 2016 and before October 1, 2017 the Loan Fee is 1.069%.
* Beginning October 1, 2107 for any loans first disbursed on or after October 1, 2017 and before October 1, 2018 the Loan Fee is 1.066%.
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 grade level, for a single academic year.
|Total Annual Maximum|
Independent Undergraduates (and dependent students whose parents can’t get Direct Parent PLUS Loan):
|Total Annual Maximum|
These loan limits below represent the total of all Subsidized and Unsubsidized Federal Direct Stafford Loans a dependent undergraduate student may borrow aggregately for their undergraduate studies:
After the student graduates, leaves school, or drops below half-time enrollment, the student will have a six-month grace period before repayment begins. Students are required to complete Exit Counseling at www.studentloans.gov upon leaving Linfield. Students are encouraged to activate their SALT™ account to upload and manage student loans, receive free loan advice, and use calculators for determining repayment plan options. Linfield students and alumni can sign up for SALT at saltmoney.org/LINFIELD. View the Exit Counseling Guide for Federal Student Loan Borrowers of Direct Loans and Federal Family Education Program Loans.
Students will be contacted by their Loan Servicer during the six-month grace period regarding their repayment. Students will be automatically placed in the Standard Repayment Plan, unless a different plan is requested. With the Standard Repayment Plan, students will pay a fixed amount each month until the 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 can track their loan history by accessing the National Student Loan Data System. The website allows students to see all federal loans received from all the schools they attended, and contact information for their loan servicer.
The student’s monthly payment under the Standard Repayment Plan may be higher than it would be under other plans because their loans will be repaid in the shortest time. For that reason students may pay the least interest.
To calculate estimated loan payments, use the Department of Education's Repayment Estimator calculator.
Calculator results: Using the repayment calculator, with an interest rate of 4.48% and total Stafford debt of $23,827 an example repayment schedule would be:
|Repayment Plan||First Monthly Payment||Last Monthly Payment||Total Amount Paid||Projected Loan Forgiveness||Repayment Period|
|Revised Pay As You Earn (REPAYE)||$0||$0||$0||$35,947||300 months|
|Pay As You Earn (PAYE)||$0||$0||$0||$45,271||240 months|
|Income-Based Repayment (IBR)||$0||$0||$0||$50,632||300 months|
|IBR for New Borrowers||$0||$0||$0||$45,271||240 months|
|Income-Contingent Repayment (ICR)||$0||$0||$0||$53,158||300 months|
|Note 1: The Graduated Repayment Plan 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: The Extended Repayment plans are only available to students who borrow amounts greater than $30,000.00.|
To learn more about repayment plan options and utilize the federal loan calculators to determine which repayment plan is right for you, such as Standard, Extended, Graduated, Income-Contingent or Income-Sensitive, Income-Based (IBR), or Pay As You Earn (PAYE), or to learn about consolidating your federal student loans visit www.studentloans.gov. Linfield students and alumni may also obtain free student loan advice from a SALT™ loan counselor at 877.523.9473 or at firstname.lastname@example.org.
Student’s terms and conditions of the loan are located in the Master Promissory Note, which students are encouraged to read and sign online at www.studentloans.gov. Preview a read-only version of the Master Promissory Note (MPN) for subsidized/unsubsidized, which includes borrower rights and responsibilities as well as the terms and conditions.
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: