Loan FAQs

Why do I have to repay a Federal Stafford Loan?

Unlike grants and scholarships loans are loans, not gifts, and must be repaid

What are loan fees?

The federal government charges up to a 3% loan origination fee and the guarantor may charge an insurance premium. If applicable, these fees may be deducted from your loan proceeds by the lender prior to disbursement.

Is my loan affected by my grades?

Yes. If your cumulative GPA falls below a 2.0 any time during the loan period you may no longer be eligible to receive student loans. All aspects of the Standards of Academic Progress policy will be measured before each loan distribution.

If you do not meet the minimum standards set, you will lose your second disbursement as well as any remaining grants.

If I only want to apply for a loan why do I have to complete the FAFSA?

The FAFSA is used to determine eligibility for federal, state and institutional aid which includes grants, student loans and work-study eligibility.

What is the minimum number of credit hours in which I have to be enrolled to receive Federal Stafford Loans?

You must be enrolled in at least six (6) credit hours. If at any time you drop below the six hour minimum any portion of your loan that has not been released to you will be cancelled and your lender will be notified.

Can I get the loan disbursement before classes start?

No. The earliest your loan can be released is after the 30th day of class for each semester. For one semester only loans the second disbursement will be released after the midpoint of the semester has passed.

If the first disbursement isn't released until the 30th day after the start of classes am I responsible for paying for classes up front?

No. As long as loan funds are in an Active (A) status on your My Records account, you will not have to pay up front.

What is the interest rate for my Direct loan?

Loan	Interest Rate	Disbursement Date
Direct Subsidized Loans for Undergraduate students	Fixed 3.4%	Disbursed between July 1, 2011, and June 30, 2012
Direct Subsidized Loans for Graduate students	Fixed 6.8%	Disbursed on or after July 1, 2006
Direct Unsubsidized Loans for all students	Fixed 6.8%	Disbursed on or after July 1, 2006
Direct PLUS Loans	Fixed 7.9%	Disbursed on or after July 1, 2006

What type of repayment incentives are offered by the Department of Education?

The U.S. Department of Education can no longer offer borrowers repayment incentives.  Effective for loans disbursed on or after July 1, 2012, the Department of Education is prohibited from offering any repayment incentives to Direct Loan borrowers, except interest rate reductions to borrowers who agree to have payments automatically electronically debited from their bank account.

When will my Direct Subsidized Loan begin to accrue interest?

Direct Subsidized loans will not be eligible for an interest subsidy during the six month grace period.  Subsidized loans are loans for which the borrower is not responsible for the interest while the student is enrolled in college on at least a half-time basis, when the loan is in the six month grace period after the student is no longer enrolled at least half-time, or if the loan or loans are in a deferment stats.  This provision eliminates the interest subsidy provided during the six-month grace period for subsidized loans for which the first disbursement is made on or after July 1, 2012 and before July 1, 2014.  If a student receives a subsidized loan during this timeframe, the student will be responsible for the interest that accrues while the loan is in the grace period.