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Federal Direct Stafford Loans

Effective July 1, 2009, Saint Joseph College will begin processing all our first time borrowers in the Federal Stafford Loan Program through the Federal Direct Loan program. The rates and fees are the same for the Federal Stafford Loan in Direct Lending as in the FFELP with private lenders. However, because the Direct Loan program is guaranteed by the federal government, we are assured of continued funding. It also allows for control in disbursement and return of proceeds.

Stafford Loans are the primary loans available and offered to each student who completes a FAFSA. The Federal Direct Stafford Loans are funded by the federal government.

Stafford Loans come in two types; Subsidized and Unsubsidized. Subsidized Loans are need-based and available to students with demonstrated financial need. If you are awarded a Federal Subsidized Stafford Loan, the government will pay the interest while you are in school.

If you are awarded a Federal Unsubsidized Stafford Loan, you pay all the interest, although you can have the payments deferred until after graduation. However, the deferred interest is added to the principal which makes the loan more expensive over time.

Maximum Annual Loan Limits

Year	*Dependent Undergraduate Student	Independent Undergraduate Student
First	$3,500 subsidized plus $2,000 in unsubsidized loans	$9,500 - No more than $3,500 of this amount may be in subsidized loans.
Second	$4,500 subsidized plus $2,000 in unsubsidized loans	$10,500 - No more than $4,500 of this amount may be in subsidized loans.
Third and Beyond	$5,500 subsidized plus $2,000 in unsubsidized loans	$12,500 - No more than $5,500 of this amount may be in subsidized loans.

*Dependent Students whose parents are denied a PLUS Loan are eligible for Independent Loan Limits

Direct Loan Stafford Loan Interest Rates and fees for the 2009-2010 academic year are:

Subsidized Stafford Loan - 5.6%, 1.5% Interest begins to accrue at the time of repayment.
Unsubsidized Stafford Loan - 6.8%, 1.5% Interest accrues during in school and grace periods.

There are 2 steps to applying for the Federal Direct Stafford Loan.

Before you begin: You will need your FAFSA PIN* issued by the U. S. Department of Education. This is the same PIN you used to electronically sign your FAFSA. You will also need the name, address and phone numbers of two adult references (living in the United States) with different addresses.
*If you have lost or forgotten your FAFSA PIN, visit www.pin.ed.gov.

STEP 1: Electronically sign your Federal Direct Stafford Loan Master Promissory Note (MPN). Follow the instructions here.

If you would prefer to work with another lender or as a transfer student have borrowed in the past and would like to continue working with that lender, please contact our office for further instruction.

STEP 2: Complete your Federal Direct Stafford Loan Entrance Interview online. This interview is a federal requirement and will inform you of your rights and responsibilities as a borrower under the Federal Stafford Loan program. Click on the link below and follow the instructions.
Entrance Interview Counseling

Once you have completed this process your Master Promissory Note will be valid for your entire career at Saint Joseph College.

For more detailed information about the Federal Direct Stafford Loans click here.

PLUS Loans

Direct Parent PLUS Loan - The federal Parent Loan for Undergraduate Students (PLUS) is a loan borrowed by a parent from the US government. The loan has a fixed interest rate of 7.9% and a 1% net origination fee after 1.5% upfront rebate. Fees are deducted from the loan when disbursed to the school. In most cases, repayment of the loan begins immediately after the loan has disbursed, however it may be possible to postpone payment.For more detail and application information for the William D. Ford Federal Direct Loan Program click here.

Federal FELP PLUS Loan - The federal Parent Loan for Undergraduate Students (PLUS) is a loan borrowed by a parent from private lenders. The loan has a fixed interest rate of 8.5 and up to 4% in fees depending on the lender.

PLUS FELP Lenders for your consideration.

For more detailed information regarding PLUS loans click here.

To confirm a student's eligibility to receive any Title IV federal funding a completed 2009-10 Free Application for Federal Student Aid (FAFSA) must be on file with the institution.

Alternative Loans

Also known as Private Education Loans, Alternative loan products are not backed by the federal government. They usually have variable interest rates based on Prime or LIBOR and rely on a credit review to calculate the initial rate of interest. Typically the student is the borrower and often a co-borrower is required to pass credit or receive a favorable interest rate. Interest accrues from disbursement. These loans may not be included in a federal consolidation.

Alternative Education Loans for Your Consideration

Click here to download our list of recommended alternative loan lenders. (PDF: 2pp., 132K)

Or compare alternative loan lenders online at Simple Tuition.

Note: All Alternative Education Loans are credit worthy loans and the lender may suggest a co-borrower. Credit checks are valid for 180 days prior to fund disbursements.

Credit Union Student Loan Program

If you have been unable to get funding through traditional student loan programs, you may be eligible for a loan through a Connecticut Credit Union through a program created by Governor Jodi Rell. Visit the Credit Union League of CT for participating credit unions.

Financial Aid Code of Conduct

Please click here to download our Code of Conduct. (PDF: 5pp., 29K)

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November 18, 2009