The Federal Stafford Loan is
a low-interest education loan
designed for undergraduate and
graduate students.
There are two ways Stafford
Loans are made available –
through private lenders such
as PNC Bank, and in some cases,
through schools participating
in the Federal Direct Lending Program.
Stafford Loans are an extremely
popular and cost-effective source
of education funds.
Subsidized
vs. Unsubsidized Stafford Loans
There are two types
of Stafford Loans: subsidized
and unsubsidized. Depending
on household income, a student
may be eligible for one or both
loans. The school will specify
the loan type for which the
student should apply.
- Subsidized Federal Stafford
Loans are awarded on the basis
of financial need. The government
pays the interest while the
student is in school, in deferment,
and during the grace period
before repayment begins.
- Unsubsidized Federal Stafford
Loans are available to all students
regardless of income. Student
is responsible for all interest
that accrues while they are
in school, in deferment, and
during their grace period.
Eligibility Requirements
- Enrolled at least half time
at an eligible school and
maintaining satisfactory academic
progress
- Must complete the Free Application for Federal Student Aid (FAFSA)
- A U.S. citizen or a permanent
resident of the U.S. or an
eligible non-resident
-
Not currently in default
- Must not owe a refund on any
Title IV loan or grant
- Registered with Selective
Service (if borrower is a
male under age 25)
Borrowing
Limits
Loan limits vary depending on
a student's year in school and
whether they are considered a
financially dependent or independent
student. The school's financial
aid office will determine a student's
eligibility for a subsidized or
unsubsidized loan.
Loan proceeds are usually sent
to the school in two or three
payments called disbursements.
This chart lists the borrowing
limits.
Interest
Rates and Fees
The interest rate will be fixed at 6.80% for all new loans guaranteed on or after July 1, 2006.
Two fees are deducted from
the loan funds and are included
in the amount a student will
pay back. The U.S. Department
of Education charges an origination
fee of 2% and the loan guarantor
charges a federal default fee
of up to 1%.
PNC Bank will not charge an origination or federal default fee on Federal Stafford Loans guaranteed after May 1, 2006.
Repayment
Once you graduate, withdraw
or drop below half-time status,you will be
granted a six-month grace period.
During your grace period, your
lender will provide you with
a repayment disclosure statement
containing your repayment terms,
including the amount of your
monthly payment and when your first payment is due.
Repayment of the Federal Stafford
Loan begins at the end of this
six-month grace period and usually
extends up to ten years. The payment amount is determined by the total amount borrowed, but cannot be less than $50 per month; however, you should talk to your lender to determine other flexible repayment terms that may be available.
Borrower
Benefits*
We offer a variety of programs and repayment
incentives to help
you save money on your Federal Stafford Loan.
For details on these programs and incentives, please select the location of the school you attend or plan to attend:
How
to Apply
The first step in the process
is to complete the Free
Application for Federal Student
Aid (FAFSA) or Renewal
FAFSA. After your FAFSA
is processed, your school will
review the results and will
inform you about your loan eligibility.
You must also complete a Federal
Stafford Loan Application and
Master Promissory Note (MPN).
For more information,
contact our customer service
center to speak with one of
our education loan specialists
at 800-762-1001, Monday through Friday from 8am to 6pm Eastern
time.
* Benefits are subject to change without notice. |
