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The Federal Stafford Unsubsidized 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. Many students combine subsidized loans
with unsubsidized loans to borrow the maximum
amount permitted each year. 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.
Federal Stafford Unsubsidized Loan is awarded
as a "final option" after consideration
of financial need. This is not a need-based
loan. Anyone, regardless of having a financial
need or not, may be eligible for a Federal Stafford
Unsubsidized Loan. The amount of 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.
Federal Stafford Unsubsidized loans have annual
maximum limits that vary depending on your year
in school and whether you are classified as
a dependent or independent student by definition
of the program. They also have cumulative maximum
limits that cap the total amount you can borrow
overall.
TERMS:
| 1. |
The interest
rate on a Federal Stafford Unsubsidized
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. |
Interest is accruing (or
accumulating) while you are in school. You
will be given a choice of paying your interest
while in school or deferring payment until
you leave school. If you choose to make
interest payments, you may reduce your payments
and the overall cost of your loan. |
| 5. |
If you do not make interest
payments, the interest on the loan accrues
and will be added to your principal balance
(called "capitalization") at the
time you enter repayment. |
| 6. |
A TIP. When you fill out
your Master Promissory Note, choose to defer
interest payments whether you intend to
pay or not. Then, you can make the payments
if you want to but you would not have to
make the interest payments. |
| 7. |
Repayment begins six months
after you graduate, withdraw, or drop below
half-time attendance and you may have up
to ten years to repay. The minimum payment
amount is $50 per loan. |
| 8. |
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 Unsubsidized
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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