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Please Note: All first-time Stafford loan borrowers must complete Entrance Counseling and submit a Lender Selection Form to our office. More...

Overview
Increased Loan Limits
Lender Criteria
Lender List
Some Definitions
Loan Processing
More... (Student Aid on the Web)

Overview

FFELP Stafford Loans. The Federal Family Education Loan Program (FFELP) offers both subsidized and unsubsidized Stafford Loans.

• A subsidized loan is awarded on the basis of financial need. For students who qualify for the subsidized loan, the federal government pays ("subsidizes") interest on the loan until repayment begins and during authorized periods of deferment thereafter.
• An unsubsidized loan is not awarded on the basis of need; however, a student must complete the financial aid application process, and Keene State College must determine whether or not a student is eligible for need-based aid before awarding an unsubsidized Stafford Loan. Interest begins accruing immediately once the loan has been disbursed. The student can choose to pay the interest or allow it to accumulate. If the student chooses to let the interest accumulate, it will be capitalized - that is, the interest will be added to the principal amount of your loan and will increase the amount the student must repay.

It may be possible for a student to receive both a subsidized and an unsubsidized loan for the same enrollment period, but a student may not exceed the award year maximums as stated below. In addition, students may not borrow amounts that, when combined with other financial aid awarded, exceed their total cost of attendance at Keene State College. Therefore, it is possible that a student would not be eligible to borrow the maximum amount.

Master Promissory Note. All borrowers are required to have a completed Master Promissory Note (MPN) on file with their lender. The MPN is a multi-year promissory note. Once a borrower has a completed MPN on file with their lender, future Stafford loans can be processed without the need of a new MPN as long as the borrower continues to be processed by the same lender and Keene State College. Each subsequent year, the borrower will be notified of annual loan eligibility via an award notification issued after submitting their Free Application for Federal Student Aid for the respective academic year. Many lenders provide a way for you to complete your MPN online. Contact your lender if you are unclear of your MPN status.

Increased Loan Limits (Effective July 1, 2008)

Additional unsubsidized Stafford loan limits applicable to undergraduate students are increased for loans first disbursed on or after July 1, 2008. Subsidized limits (up to base amount) are unchanged. For students enrolled as regular students in eligible programs, annual Stafford loan limits are as follows:

Aggregate Loan Limits (Effective July 1, 2008)

• Undergraduate Dependent Students: $31,000 (no more than $23,000 of which can be subsidized).
• Undergraduate Independent Students: $57,500 (no more than $23,000 of which can be subsidized).
• Graduate and Professional Students: currently $138,500 (no more than $65,500 of which can be subsidized).

Lender Criteria

• Offer a competitive package of borrower benefits.
• Offer a significant level of customer service including online options and call centers for our families who are not comfortable working online.
• Offer robust repayment options and pro-actively work with borrowers throughout the life of the loan.
• Are well-known, established companies with a focus on student loans offered through the FFELP Program.
  • We wanted to refer families to reputable companies with a history of treating borrowers appropriately.
  • Many of our undergraduate students will pursue graduate and professional degrees at other institutions. We wanted to initially focus on lenders that students could use throughout their studies.

Lender List

• Citizens Bank/SallieMae
• New Hampshire Higher Education Loan Corporation (NHHELCO)
• Vermont Student Assistance Corporation (VSAC) - Vermont residents only

Some Definitions

• Guarantee Agency or Guarantor - State agencies responsible for approving student loans and insuring them against default. Guarantee agencies also oversee the student loan process and enforce federal and state rules regarding student loans.
• Lender - A bank, credit union, savings & loan association, or other financial institution that provides funds to the student or parent for an educational loan. Note: Some schools now participate in the Federal Direct Loan program and no longer use a private lender, since loan funds are provided by the US Government.
• Loan - A type of financial aid which must be repaid, with interest. The federal student loan programs (FFELP and FDSLP) are a good method of financing the costs of your college education. These loans are better than most consumer loans because they have lower interest rates and do not require a credit check or collateral. The Stafford Loans and Perkins Loans also provide a variety of deferment options and extended repayment terms.
• Servicer - An organization that collects payments on a loan and performs other administrative tasks associated with maintaining a loan portfolio. Loan servicers disburse loans funds, monitor loans while the borrowers are in school, collect payments, process deferments and forbearances, respond to borrower inquiries and ensure that the loans are administered in compliance with federal regulations and guarantee agency requirements.

Definitions provided courtesy of FinAid!.

Selecting a Lender: Different lenders offer various incentives to students to choose their institution as a lender. You may contact any of the lenders to learn more about the borrower incentives they offer.

Stafford Loans Processing

First Steps

1. Student Financial Services (SFS) awards Stafford Loan to the student and sends financial aid award notification.
2. Student accepts Stafford Loan on award notification.
   First-time borrowers must also complete the Lender Selection Form.
3. Student returns white copy of award notification and Lender Selection Form to SFS.
4. Student completes Entrance Counseling (must be completed before SFS will certify the loan).
5. SFS receives confirmation of completed Entrance Counseling.

Final Steps

6. SFS certifies the loan - early July for incoming students.
7. The lender will forward instructions to complete the Master Promissory Note (MPN) - mid-July for incoming students.
8. Upon receipt of completed MPN, lender notifies SFS that loan process is complete.
9. Funds are ready to be credited to the student account within the first week of the semester.

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