Federal Stafford Loan
New for 2008-2009: See details on the new
Stafford Loan Certification Requirement
Federal Stafford Loans are made in the student's name and can be either subsidized or unsubsidized.
A subsidized Stafford loan is awarded on the basis of financial need. This need is determined from the results of the FAFSA. The federal government pays the interest accruing on the loan ("subsidizes" the interest on the loan) while the student is enrolled at least half time in a degree seeking program. The loan is not based on credit-worthiness, nor is a co-signer required.
An unsubsidized Stafford loan is not awarded on the basis of need. The borrower is charged interest from the time the loan is disbursed (funds forwarded from the lender to the school) until it is paid in full. The student has the option of paying this interest while in school or capitalizing the interest at repayment. If you choose to pay the interest as it accumulates, you will repay less in the long run.
You may receive a subsidized and unsubsidized Stafford Loan for the same enrollment period; however, your maximum loan eligibility may not exceed federally regulated limits.
If your financial aid award includes a Federal Student Stafford Loan, then follow the instructions/timeline below in order to assure that the loan is properly processed and certified. Failure to follow these guidelines will result in the delay of disbursement of your loan funds.
Federal Stafford Loan Processing Timeline
|
Month |
Actions Taken |
| April and May |
Award Offers are made, including loan eligibility. |
| June | Student completes a Stafford Certification Form |
| July | Loans are sent to the lender by Georgia Tech. By mid-month, |
| August | Funds are requested from lenders for students who are enrolled at least half-time. Funds are disbursed to eligible students. |
Choosing a Lender for your Stafford Student Loan
Selecting a lender for your Stafford Student Loan is an important decision. Reasons for selecting a particular lender vary from person to person. Some choose a lender based upon name recognition, immediate benefits or the long term advantage of savings during repayment. Many students and/or their parents already have a banking relationship with a specific bank/lender and want to choose that institution for their student/parent loans. Georgia Tech participates in the Federal Family Educational Loan Programs (Stafford Subsidized and Unsubsidized Student Loans; the Parent PLUS Program and the Grad PLUS program) so that you can have a choice of lender.
We strongly encourage you to ask questions and carefully consider the following as you make your selection:
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Will my loan be “sold”? Will the lender I chose service my loan throughout the repayment process?
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Does my lender have a proven track record of providing efficient and timely service? Will my loan funds be sent electronically to Georgia Tech?
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What, if any, fees will be charged for processing my loan?
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Does my lender offer any interest rate reductions as a reward for making my payments on time?
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Are the lender’s web site/services easy to use?
The Office of Scholarships and Financial Aid will process your loan with any participating lender you choose. The Institute does not receive any financial incentives nor do any of our personnel receive financial benefits and/or inducements from any lender. We do have a responsibility to make the student loan process as efficient as possible and to strive diligently to give our students the best advice. We do make the following recommendations:
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If you have borrowed a student loan previously, and you are satisfied with that lender’s service, then we encourage you to stay with the same lender throughout your college career. Multiple loans from multiple lenders could require you to make multiple repayments at the same time.
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Entering freshmen, incoming transfer and graduate students and/or any student that has not borrowed a Stafford Student Loan previously through Georgia Tech, must notify us of your lender preference before we can finalize your student loan. You will indicate your lender choice when you complete the Stafford Certification Form.
Requesting a Federal Stafford Loan
Students wishing to borrow from the Stafford Loan program should fill out a Free Application for Federal Student Aid (FAFSA) and a Georgia Tech Application for Scholarships and Financial Aid. When completing the Georgia Tech Application for Scholarships and Financial Aid, check the boxes indicating your desire to borrow. Once both applications are complete, the OSFA will determine eligibility and award either the subsidized Stafford Loan, the unsubsidized Stafford Loan, or a combination of the two.
Certifying Your Federal Stafford Loan
The Georgia Tech OSFA will transfer an electronic loan application to the lender you selected on your Stafford Certification Form. The student's financial aid file must be complete before we send your loan application to the lender, and if the student's file was selected for Verification, you must complete our requirements before your loan is certified.
Before you can receive the funds from your Stafford Loan, you must complete an online counseling session required by federal regulations. It is very important that you know and understand your rights and responsibilities as a student borrower. Please contact our office if you have any questions. Students may click here to be directed to the Entrance Counseling page. You do not have to wait to complete this form and we strongly encourage you to complete this requirement as soon as possible to avoid disbursement delays and/or problems.
The MPN allows students using only one lender to complete only one Federal Stafford Loan promissory note during their entire attendance at Georgia Tech. After the lender receives the electronic loan application, a Master Promissory Note will be generated and mailed to the student borrower. The borrower should verify the information, complete any blank items, sign (ink) and date the promissory note. Keep the borrower copy for your records and carefully follow the instructions for submitting the completed note to the appropriate address. Many lenders provide an electronic (e-sign) option that can be used instead of the paper form.
For new students entering in the Fall semester, the Master Promissory Note should be available in July.
Important: the only promissory note that is valid will be the one that is initiated with this process. Do not download other applications/notes from the Internet. Do not submit a note that was mailed to you from other lenders by direct mail. Doing so will result in a delay in receipt of your loan.
Interest Rates .
Effective July 1 2009, the interest rate for Undergraduate Subsidized Stafford Loans will be fixed at 6%. All other Stafford loans will be fixed at 6.8%.
If you have subsidized Stafford loans, the federal government pays the interest while you are in school at least half time, during a grace period, or during authorized periods of deferment.
If you have unsubsidized Stafford loans, you will be charged interest from the day the loan is disbursed until it is paid in full, including in-school, grace, and deferment periods. You may choose to pay the interest during these periods, or it may be capitalized.
Annual and Aggregate Loan Limits - Effective for the 2008-2009 Academic Year
Dependent Undergraduates |
|||
Grade Level |
Base Amount Subsidized & Unsubsidized |
Additional Unsubsidized |
Maximum Subsidized and Unsubsidized Loan Limit |
Freshmen |
$3,500 |
$2,000 |
$5,500 |
Sophomores |
$4,500 |
$2,000 |
$6,500 |
Juniors & Seniors |
$5,500 |
$2,000 |
$7,500 |
Independent Undergraduates and Dependent |
|||
Grade Level |
Base Amount Subsidized & Unsubsidized |
Additional Unsubsidized |
Maximum Subsidized and Unsubsidized Loan Limit |
Freshmen |
$3,500 |
$6,000 |
$9,500 |
Sophomores |
$4,500 |
$6,000 |
$10,500 |
Juniors & Seniors |
$5,500 |
$7,000 |
$12,500 |
Graduate and Professional Students - (Unchanged) |
|||
| Base Amount Subsidized & Unsubsidized |
Additional Unsubsidized |
Maximum Subsidized and Unsubsidized Loan Limit |
|
$8,500 |
$12,000 |
$20,500 |
|
Stafford Aggregate Loan Limits |
|||
Level |
Total Aggregate |
Subsidized Maximum |
|
Dependent Undergraduate |
$31,000 |
$23,000 |
|
Independent Undergraduate |
$57,500 |
$23,000 |
|
Graduate and Professional |
$138,500 |
$65,500 |
|
Fees
Borrowers may be charged an origination fee of 1% and a default fee of up to 1%.
Disbursements
Loan Fees Deducted
When the lender disburses a student's loan, guarantee and origination fees may be deducted from the total amount borrowed. Each lender will send a disclosure statement advising the student of the amount of "net" proceeds that have been disbursed and the applicable interest rate. In addition, Georgia Tech will estimate/credit the amount to be received when posting the loan to the student's bill.
Delivery of Funds
A majority of lenders deliver funds via Electronic Funds Transfer (EFT) directly to Georgia Tech. The net amount of the student's Federal Stafford Loan will be credited to his/her account. If the application of the net amount of the student's loan proceeds, along with any other aid applied, results in a balance due to the Institution, the student must pay the difference. If the crediting of the loan proceeds results in a credit balance on the student's account, a refund of the credit balance will be issued by the Bursar's office. See Disbursements for more information on how and when funds are delivered to students' accounts.
Repayment Terms
Under the subsidized Federal Stafford Loan, repayment begins six months after the borrower was last enrolled at least half time. Under the unsubsidized Federal Stafford Loan, repayment of interest begins within 30 days from full disbursement of the loan proceeds, and repayment of principal begins six months after the borrower was last enrolled at least half time. Borrowers may elect to pay the interest as it accrues or may capitalize interest payments (interest is added to the loan principal). The maximum repayment term for the subsidized and unsubsidized Stafford Loan is ten years with no pre-payment penalty.
Deferment and Payment Options
There are many deferment and repayment options under the Federal Stafford Loan program that have been designed to make it possible for borrowers to repay their loans even when special circumstances make repayment difficult. Details are available in the promissory note and from the lender upon request.
This website last updated on 06/27/08