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Federal Student Loans

Loans are a means to an end. You’ll likely discover that the education secured by that loan was worth every penny … and then some.

Even though they’ll need to be repaid, with interest, federal student loans are often the most affordable loans available to you, with fixed interest rates and deferred principal and interest payments until after you graduate.

Federal William D. Ford Direct Stafford Loan
Federal Direct Stafford Loans are fixed-rate student loans for undergraduate and graduate students attending college at least half time. Stafford Loans are made available to U.S. citizens or permanent residents who complete the FAFSA. Repayment of principal and interest begins six months after you cease to be enrolled for at least six credits per term.

Subsidized Stafford Loan: You need to demonstrate financial need to obtain this loan. For loans disbursed after July 1, 2013, interest is paid by the federal government while you’re enrolled at least half time. Graduate students are no longer eligible to receive subsidized Stafford Loans as of July 1, 2012.  

Unsubsidized Stafford Loan: You don’t need to demonstrate financial need to receive this loan. Interest accrues while you’re in school (once the loan is disbursed), as well as grace and deferment periods. You’ll be sent quarterly statements and will have the option of paying the interest as it accrues while you’re in school. If you don’t pay the interest as it accrues, the unpaid interest will be capitalized (added to the principal balance) at repayment, in your grace period or after deferment.

Interest Rate
Interest rates are determined by Congress. The current fixed interest rate for undergraduate loans disbursed between July 1, 2013, and June 30, 2014, is fixed at 3.86%.

Graduate students are only eligible for unsubsidized Stafford Loans and the graduate interest rate is 5.41%.

Loan Fees
Fees range from 1.051% to 1.072% based on when the loan was first disbursed to the school for the 2013-14 academic year. Loan fees will be deducted proportionately from each loan disbursement. This fee is retained by the government to help reduce the cost of the loan.

Repayment begins six months after student graduates or ceases to be enrolled at least half time.

Stafford Loan requirements
You’re obligated to complete the following loan requirements before receiving a federal Stafford Loan:

  • Entrance loan counseling: Entrance counseling will explain the direct loan process and describe your rights and responsibilities as a borrower. All first-time direct loan borrowers must complete entrance counseling before their loans can be disbursed. You can complete entrance counseling online.
  • Master Promissory Note (MPN): The Master Promissory Note is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. It explains the terms and conditions of your loan(s). Once you complete the MPN, you won’t have to complete another direct loan promissory note for the duration of your St. Norbert College education. You can complete the MPN online.
Before you (or once you notify that you will) withdraw, graduate or drop below half-time attendance (regardless if you plan to transfer to another school), regulations require that Stafford Loan borrowers complete exit loan counseling.

Annual and aggregate loan limits for undergraduate students
The combination of subsidized and unsubsidized federal Stafford Loans for a borrower may not exceed the annual and aggregate limits for loans under the federal Stafford Loan program.

Loan limits for subsidized and/or unsubsidized Stafford Loans are:

Year Dependent Undergraduate Students (except students whose parent are unable to obtain PLUS Loans) Independent Undergraduate Students (and dependent students whose parents are unable to obtain PLUS Loans) Graduate and Professional Degree Student
First year
$5,500 – no more than $3,500 of this amount may be in subsidized loans. $9,500 – No more than $3,500 of this amount may be in subsidized loans. $20,500 (unsubsidized only)
Second year $6,500 – no more than $4,500 of this amount may be in subsidized loans. $10,500 – No more than $4,500 of this amount may be in subsidized loans.
$20,500 (unsubsidized only)
Third and beyond (each year)
$7,500 – No more than $5,500 of this amount may be in subsidized loans.
$12,500 – No more than $5,500 of this amount may be in subsidized loans.
$20,500 (unsubsidized only)
Maximum total debt from Stafford Loans when you graduate
(aggregate loan limits)
$31,000 – No more than $23,000 of this amount may be in subsidized loans. $57,500 – No more than $23,000 of this amount may be in subsidized loans. $138,500 – No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes Stafford Loans received for undergraduate study.

**These annual loan limit amounts are the maximum yearly amounts you can borrow in both subsidized and unsubsidized loans. You can have one type of loan or a combination of both depending on your financial need. Because you can’t borrow more than your cost of attendance minus any other financial aid you’ll receive, you may receive less than the annual maximum amounts. Also, the annual loan limits assume that your program of study is at least a full academic year. If the remaining portion of your program of study is less than a full academic year, your loans will be prorated.

Federal Perkins Loan
If you complete the FAFSA and are enrolled for at least six credits per term, you’ll be considered for this federal loan. Funds from this program, when available, are loaned to the neediest students, as determined by the needs analysis. If you’re eligible for a Perkins Loan, the loan amount you’re eligible for will appear on your award notification. Loan limits are $2,000 annually, $15,000 aggregate for undergraduates. Entrance counseling and master promissory notes are required for first-time Perkins Loan borrowers at St. Norbert College. Interest is at a fixed rate of 5 percent. Payments and interest are deferred until nine months after you graduate or fall below half-time enrollment.