
How to Apply for a Stafford Student Loan
What You Must Do
In short, to borrow a Stafford Student Loan, you must complete
a loan application on-line. You can complete a Stafford Student
Loan application on-line by visiting the website of any participating
lender.
Here is a more detailed explanation of the steps involved:
- The student and his parents complete a Free Application for
Federal Student Aid (FAFSA).
- The student selects a lender and completes a Stafford Master
Promissory Note (MPN) on-line through the Lender's website (see
below).
- The College is notified by the Lender that the student has
completed his MPN on-line and the College certifies the appropriate
loan amount.
- The student must attend a "Loan Entrance Counseling
Session" offered by the Financial Aid Office at the beginning
of the school year.
- The Lender processes the loan amount that was certified by
the College.
- The Lender deducts any fees and sends a loan disbursement
check to Thomas Aquinas College (half each semester).
- The College verifies student's status and asks student to
endorse the check for loan proceeds.
- The loan check is posted to the student's account for payment
of tuition, room and board.
Recommended Lender List
Thomas Aquinas College does not have a "preferred lender
list" but many families ask us for lender recommendations,
so we have compiled a "recommended lender list" to assist
you in applying for a Stafford Student Loan. You are welcome to
use any lender that participates in the Federal Family
Education Loan Program. You are not limited to the lenders listed
on our recommended lender list.
When considering a method and criteria for recommending lenders,
we decided the most important consideration is stability,
that is, an assurance that the lender is likely to be in business
not only this year, but also for the remainder of your college
years. Credit markets are very shaky in today's economy. Many
small banks are exiting the Federal Family Education Loan Program.
We recommend that you select one of the larger lenders so you
are not faced with borrowing from one lender this year and another
lender next year. Having multiple lenders can make it difficult
later, when you are in repayment.
Our recommended lender list contains the seven largest FFELP
lenders, determined by loan volume in 2007 (the most recent data
available). We included all lenders that had more than $1 billion
in loan volume per year and that have no regional or institutional
limitations. The loan volume of these lenders is an indication
they provide high quality service. If you should have a quality
of service issue with any of these lenders, we would appreciate
hearing from you.
As a Catholic college, we have incorporated into our recommended
lender list a rating that indicates whether or not the lender
supports a culture of life. We based that determination
on the lenders response to the question of whether their
corporation contributes to Planned Parenthood.
Thomas Aquinas College's Recommended Lender List
|
Ranked by National FFELP Volume*
|
| |
Lender Name
Website
|
National Loan
Volume* |
Lender
Code
|
2009-10
Interest
Rates for Sub/Unsub
Loans |
2009-10
Fees |
0.25% Interest Rate Reduction
For
Automatic Payments? |
Corporate
Pro-Life
Standing |
| 1 |
Sallie Mae
salliemae.com
|
$9,002,313,480 |
802218 |
5.6% / 6.8% |
Origination 0.5%
Default 1.0%
|
Yes |
Good |
| 2 |
Bank of America
bankofamerica.com
|
$3,261,557,376 |
824421 |
5.6% / 6.8% |
Origination 0.5%
Default 1.0%
|
Yes |
Poor
|
| 3 |
Chase Education Finance
chasestudentloans.com
|
$3,064,653,064 |
803000 |
5.6% / 6.8% |
Origination 0.5%
Default 1.0%
|
Yes |
Poor |
| 4 |
Wells Fargo Education Financial Services
wellsfargo.com/student
|
$2,954,783,938 |
807176 |
5.6% / 6.8% |
Origination
0.5%
Default 1.0% |
Yes |
Poor |
| 5 |
Wachovia Education Finance Inc.
wachovia.com/educationloans
(As of 01-01-09 Wachovia Education
Finance is wholly owned by Wells Fargo Bank, but Wachovia
continues to originate loans under the Wachovia brand.)
|
$2,934,467,940 |
830005 |
5.6% / 6.8% |
Origination
0.5%
Default 1.0% |
No |
Poor |
| 6 |
U.S. Bank
usbank.com/staffordapp
|
$1,332,534,098 |
815678 |
5.6% / 6.8% |
Origination 0.5%
Default 1.0%
|
Yes |
U.S.
Bank refused to answer |
| 7 |
EdAmerica
edamerica.net
|
$1,303,749,892 |
831453 |
5.6% / 6.8% |
Origination
0.5%
Default 1.0% |
Yes |
Good |
| *This list does not include lenders
who have left the FFEL program since this data was collected
or who have regional or institutional limitations. |
The Basics About Stafford Loans
Subsidized vs. Unsubsidized Stafford Student Loans
If you qualify for a subsidized Stafford Student Loan, the federal
government (U.S. taxpayers) will pay the interest until you enter
repayment. Subsidized loan eligibility is based on financial need
as determined by the federal need analysis. (Thomas Aquinas College
uses a different need analysis to determine your eligibility for
institutional aid.) If you are not eligible for a subsidized Stafford
Student Loan, you may always apply for an unsubsidized Stafford
Student Loan. With an unsubsidized loan, interest begins to accrue
while you are in school. Interest on an unsubsidized loan may
be paid quarterly, or accrued until the borrower enters repayment.
It is possible to receive both a subsidized and an unsubsidized
Stafford Student Loan for the same period. The total of your combined
Stafford Student Loans may not exceed the annual loan limits for
your grade level.
| Maximum Annual Stafford Loan Limits* and Thomas
Aquinas College's Loan Expectations |
| |
Total Subsidized and Unsubsidized
Limits |
The College's Loan Expectation |
| 1st year |
$5,500 total, with up to $3,500 subsidized |
$3,000 |
| 2nd year |
$6,500 total, with up to $4,500 subsidized |
$3,000 |
| 3rd year |
$7,500 total, with up to $5,500 subsidized |
$4,500 |
| 4th year |
$7,500 total, with up to $5,500 subsidized |
$4,500 |
Advantages of the Stafford Loan
- Repayment is not required until six months after you leave
school or drop below half-time status.
- For loans borrowed in 2009-10, the interest rate is a fixed
5.6% for subsidized loans, 6.8% for unsubsidized loans.
- Prepayment may be made at any time without penalty.
- Payments may be deferred, extended, or reduced in cases of
economic hardship.
Loan Fees
Stafford Student Loans can have an origination fee of up to 0.5%
that is paid to the lender to offset program costs and a default
fee of up to 1.0% that is paid to the agency that insures the
loan. As a consequence, total loan fees may be as high as 1.5%.
Disbursements
Disbursements are made by check, usually in two installments,
one each semester. The College will notify you when funds are
received.
What is a Stafford "Master Promissory Note"?
The Master Promissory Note, or MPN, is a contract between you
and the lender. It's a promise to repay the loan and an agreement
to the terms and conditions of the loan. Before signing, be sure
to read the MPN carefully, along with the instructions and your
rights and responsibilities as a borrower. You only need to complete
the MPN the first time you borrow. The MPN remains active for
10 years. You will need to complete a new MPN, however, if you
change lenders, and you may need to complete a new MPN if you
transfer to a different school. Each year you must complete a
Free Application for Federal Student Aid (FAFSA) so that the College
may determine your eligibility for a Stafford loan.
Specifying Your Loan Amount
Your loan amount each year is determined by the loan amount agreed
upon in your financial aid package from Thomas Aquinas College,
as found in the "Payment Plan & Promissory Note."
You may request additional loan amounts by completing a "Loan
Adjustment Form" which is available from the Financial Aid
Office.
Repaying Your Loan
Students are required to begin repaying their Stafford Student
Loan six months after they graduate, leave school or drop below
half-time attendance. Borrowers generally have 10 years to repay
these loans. Under a level repayment plan, the monthly payment
on $15,000 in Stafford Student Loans with an interest rate of
5.6% would be $164. With an interest rate of 6.8% the monthly
payment would be $173.
For additional information about the Stafford Student Loan program,
visit www.studentaid.ed.gov, click on "Federal Student Aid
Programs" and then "Stafford Loans." Or call the
Financial Aid Office at 800-634-9797, extension 5936. We would
be happy to help you.
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