Stafford loan limits vary by academic level (undergraduate and graduate) and repayment begins 6 months after a student leaves school or drops below half-time enrollment. Within each "class" level, students are limited in the amount of Stafford loan they can borrow.
Federal Direct Subsidized Stafford Loans, which, as of July 1, 2012 are available only to undergraduate students, are limited by the student's financial need and do not accrue interest as long as the student is enrolled at least half time (6 credits for undergraduate students).
The amount of Federal Direct Unsubsidized Loan students may receive is limited by the student's cost of attendance less any other financial aid that has been awarded. The unsubsidized loan begins to accrue interest after the first disbursement. Stafford Loan benefits are discussed during the student's required entrance counseling session and may be reviewed on the federal entrance counseling website.
For 2012-13, the interest rate for undergraduate subsidized direct loans for undergraduates is 3.4%. The interest rate for undergraduate and gradute student unsubsidized direct loans is 6.8%
A 1.0% origination fee is charged for each Direct Stafford Loan before it is disbursed to a student's account. If, for example, the student's loan is for $1,000, $990 will be disbursed to his or her student account.
Federal Stafford Direct Loan borrowers must complete both an Entrance Counseling session and a Master Promissory Note before these loans can be disbursed. The "Missing Documents" letter that came in the packet with the award letter has additional details concerning these requirements. Students can also go to "My Documents" in the "Communication" section of the student menu at SUOnline for these details.
Students are strongly encouraged to complete both documents online where the same personal identification number (PIN) that was used to electronically sign the FAFSA is used. Students who have forgotten their PIN can request a duplicate. If unable to complete these documents online, contact Student Financial Services for paper versions of the information.
When a student's financial aid file is complete and the appropriate documents have been completed, loan funds will automatically be disbursed to the student's Seattle University account each quarter, provided the student is registered at least half-time. For undergraduate students this means at least 6 credits each term. For graduate students, it means at least 3 credits each term.
After a loan has been disbursed, the Federal Department of Education will assign it to one of their loan servicers. That loan servicer will be responsible for answering questions about the loan accounts of the students assigned to them, for processing deferments and forbearances and for sending out bills and processing loan payments.
It is the student's responsibility to ensure that their loan servicer always has their current billing address and phone number. Students who have more than one loan may have more than one loan servicer.
Students are able to see who is responsible for servicing their loans by going to www.nslds.ed.gov and clicking on "Financial Aid Review" or calling the Federal Student Aid Information Center at 1-800-433-3243.
Students who graduate, drop below half-time or stop attending and have borrowed from the Stafford Loan Program are required to complete an Exit Counseling session. The exit process must be completed even if the student plans to return to SU or has transferred to another school. The same Federal PIN used to electronically sign the FAFSA if also used to complete the exit interview. Students who have forgotten their PIN can request a duplicate. If unable to complete this document online, students should contact Student Financial Services to obtain a paper version of the information.
The federal government's Budget Control Act of 2011 impacts students receiving Subsidized and Unsubsidized Stafford Loans for 2012-13 in the following ways. These changes take effect for all loan periods that begin on or after July 1, 2012.
Please note that the changes take effect on July 1, 2012 and do not impact loans made for fall, winter and spring quarters of 2011-12.
These changes increase the cost of loans for many students. Students are encouraged to review expenses and reduce any unnecessary borrowing from loans planned for 2012-13. They're also encouraged to consider making quarterly interest payments to further reduce overall loan-related expenditures.
On June 29, 2012, both houses of Congress passed a bill that continues the 3.4% fixed rate for Direct subsidized loans made to undergraduate students through June 30, 2013. The interest rate for Direct unsubsidized loans remains at 6.8% for 2012-13.
The law continues to authorize the Department of Education to offer interest rate reductions to Direct Loan borrowers who agree to auto debit loan payments from a bank account. The current interest rate reduction is 0.25%.
For loan periods beginning on or after July 1, 2012, graduate students no longer have access to Federal Direct Subsidized Stafford Loans. Effective for 2012-13, the Federal Direct Unsubsidized Stafford Loan Program is the sole Stafford program available to graduate students.