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The Federal Stafford Subsidized loan is a federally
sponsored student loan available at schools
participating in the FFELP. A bank, credit union,
savings and loan association or in rare cases
the school itself can make the loan. The school's
primary role is to certify your eligibility.
A guarantor, a state agency or non-profit corporation,
insures the loan, which means you can make the
loan just on your signature. The guarantor may
charge a fee for this insurance.
This loan was created specifically for students
after high school and has many benefits not
ordinarily found in credit cards or other loan
products. You choose the lender. Keep in mind
that this is the beginning of a long-term relationship.
It is a good idea to use the same lender throughout
your college career. Multiple lenders can cause
increased monthly payments and complicate repayment.
A Federal Stafford Subsidized loan is awarded
on the basis of financial need. Eligibility
is determined in the analysis of the submitted
FASFA
(Free Application for Federal Student Aid)
data and by the school. The school will offer
you the loan in an award letter if you qualify.
TERMS:
| 1. |
The interest
rate on a Federal Stafford Subsidized loan
cannot exceed 8.25 percent. |
| 2. |
The interest rate varies
annually and is adjusted each July 1. You'll
be notified of interest rate changes throughout
the life of the loan. |
| 3. |
You may be required to pay
an origination fee (currently 1.5% of the
principal balance). This fee will be deducted
proportionately from each loan disbursement
you receive and will be paid to the Department
of Education. |
| 4. |
Repayment begins six months
after you graduate, withdraw, or drop below
half-time attendance and you have up to
10 years to repay. The minimum payment amount
is $50 per loan. |
| 5. |
Many lenders offer up-front
discounts or repayment incentives that affect
the over-all cost of the loan. You should
examine these options carefully when choosing
a lender. You may get more money up-front,
but actually pay more in the long-term. |
APPLICATION PROCESS:
Complete
the Free Application for Federal Student Aid
(FAFSA) found at http://www.fafsa.ed.gov/,
which will start the financial aid application
process at your school. Your school may also
have an institutional application you must complete.
If the school offers and you accept a Federal
Stafford Unsubsidized loan, you will receive
a Master Promissory Note that you must sign
and return as instructed.
OBTAINING YOUR LOAN MONEY
Normally, loans are disbursed in two equal disbursements,
at the beginning and middle of the academic
period. Schools disburse Stafford Subsidized
Loans in one of two ways:
- Electronic funds transfer (EFT), which allows
your lender to transfer your money directly
to a school's bank account and subsequently
to your student account.
- Paper check made payable to you and your
school and sent directly to the school for
endorsement.
Choose lender EFSI (ID #833617)
| For more information, contact
us at: |
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EFSI
P.O. Box 14445
Austin, TX 78761-4445
1-888-312-EFSI
(3374)
E-mail: customer.service@efsi.net
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