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Stafford Loan FAQs

What is the difference between subsidized and unsubsidized Stafford loans?

Federal Subsidized Stafford Loans:
Need-based loans available to undergraduate and graduate students enrolled at least half-time. Interest does not accrue on the loan while the student is enrolled at least half-time in a degree-seeking program and for six months thereafter, at which time repayment of the principal and interest must begin. Payment is delayed if the student returns to school.

Federal Unsubsidized Stafford Loans:
Non-need-based loans available to undergraduate and graduate students enrolled at least half-time. Interest does accrue on the loan. Repayment of the interest is the student's responsibility from the date the loan is disbursed and may be paid or capitalized (added) to the principal balance of the loan. Repayment of principal does not begin until six months after the student drops below half-time. Payment is delayed if the student returns to school.

What is the interest rate?

The interest rate for undergraduate Subsidized Stafford Loans disbursed on or after July 1, 2019, is fixed at 4.53%. The interest rate for undergraduate Unsubsidized, graduate Subsidized, and graduate Unsubsidized Stafford Loans disbursed on or after July 1, 2019, is fixed at 6.08%. For more information on current and future Stafford Loan interest rates, please see "What's the interest rate?" at: Student Aid on the Web.

What is a Master Promissory Note? Do I have to complete one?

A Master Promissory Note (MPN) is the legal agreement a student signs with a lender promising to repay the loan funds. The MPN states the terms and conditions of the loan, including repayment schedule, interest rate, deferment policy and cancellations. A borrower may receive multiple loans under the same MPN. The MPN may be signed in writing or electronically. Your Federal Stafford Loan lender will mail you an MPN. Complete the MPN and return it to the lender. The MPN is good for 10 years if you are not changing lenders. If you are changing lenders or your last loan was prior to July 1, 2000, you will need to complete a new MPN with your lender. Please be advised that a Stafford Loan will not be disbursed until you have completed the MPN for your lender. To complete your Stafford MPN online please click here.

Do I need to complete a Title IV Fee Authorization Form?

All students who receive federal Title IV funds are required to complete a Title IV Fee Authorization Form. Per federal regulations, National Louis University is required to have signed authorization from you in order to use Title IV Federal Financial Aid funds (from Stafford Loans, Perkins Loans, Pell Grants, SEOG) to pay charges other than tuition, fees, room and board (if applicable), including unpaid charges remaining from previous terms within the current academic year. This authorization is valid for your entire period of enrollment at NLU and may be rescinded at any time by completing a new form.

What is the origination fee?

The origination fee is a loan fee that is deducted from your loan before it is disbursed to NLU. Please factor in an allowance for this fee when determining the loan amount to request. loan brochure

How much should I borrow?

The financial aid award letter lists the amount of tuition and fees for the period for which you have been packaged and also the financial aid that you’re eligible to receive. You can take any amount up to the amount offered to you. If you borrow over the amount of tuition and fees, the overages will be refunded to you. Please keep in mind that most of the lenders are charging an origination fee, which reduces the amount that will be disbursed to your account. loan brochure

We encourage you to borrow wisely. Remember that eventually you will have to repay the loan. Please consider carefully how much you really need to borrow and be conservative when possible.

When will I receive the loan funds?

Before receiving Federal Stafford Loan proceeds, all first-time borrowers must complete Stafford Loan Entrance Counseling and a Master Promissory Note (MPN). If your last loan was over 10 years ago, you will have to complete Stafford Entrance Counseling at NLU. Most Federal Stafford Loan funds are sent by Electronic Funds Transfer (EFT) to NLU, the proceeds are applied as a credit to your student account within 5-7 business days of your scheduled disbursement date. For traditional on-campus students funds are applied to your student account 2 weeks after the start of the term (if the loans have been certified prior to that date). For Field and Focus students, funds are scheduled for the first day of each term; please allow 5-7 business days for it to be posted to your student account.

Will I get a refund? When?

If the amount you borrow is higher than the amount of your tuition/fees, the difference will be refunded to you. Please note that refund checks are processed within 14 business days of the credit appearing on your student account. Checks are printed/mailed twice a week on Tuesdays and Thursdays. If the funds are sent to NLU by check, you will receive a letter and the paper check in the mail to endorse and return back to NLU so it can be applied to your student account. You must be enrolled at least half-time at the time of disbursement. After we receive the endorsed loan check, if the amount goes over your tuition/fees for a term, a refund check will be mailed within 14 business days. Federal PLUS Loan proceeds are disbursed in the same manner, except that refund checks are made payable to the parent borrower. Students can check their student account through the NLU e-mail portal to see if funds have been posted.

Why is my Federal Stafford loan scheduled for 2 disbursements for my one term?

As of October 1, 2002, all Federal Loans processed for a single academic term must be disbursed in multiple disbursements, one at the beginning of the loan period and one no earlier than the midpoint of the period. As a result of a recent change in the Higher Education Act, one term loans processed after February 8, 2006, for a term starting on or after February 8, 2006, will be eligible for one disbursement if the term is not longer than 4 months. This is subject to change under the Higher Education Act Reauthorization by the Federal Government.

What do I do if my parents do not qualify for a Federal PLUS loan?

If a parent (of a dependent student) applies for and is denied a Federal PLUS loan because of poor credit or low income, the student may be eligible for an additional Unsubsidized Federal Stafford Loan. Preferred lenders routinely notify NLU about loans that are denied and the additional offer of the Unsubsidized Federal Stafford Loan will be sent to the student. A student may also bring a copy of the denial notice to our office (lenders are required to send notice in writing of the denial).

How can I find out the total amount of loans that I have borrowed?

Students can view aggregate loans via The National Student Loan Data System (NSLDS) is the national database of information about loans and grants awarded to students under Title IV of the Higher Education Act (HEA) of 1965. NSLDS provides a centralized, integrated view of Title IV loans and grants during their complete life cycle, from aid approval through disbursement, repayment, delinquency, and closure. A PIN (Personal Identification Number) is required. If you have completed the FAFSA online, you already have a PIN; if not, you can apply for it on this website.

When do I have to begin repaying my loans?

Stafford Subsidized and Unsubsidized Loans have a 6-month grace period that starts the day after you graduate, leave school, or drop below half-time enrollment. Undergraduate students have to maintain at least 6 hours/term and graduate students at least 3 hours/term. You don't have to begin making payments until your grace period ends.

Failure to repay your loans is called default. If you go into default, your lender can require immediate payment including interest plus collection and late payment charges. The Internal Revenue Service may withhold any income tax refund and apply it toward payment. You will not be eligible for further financial assistance until satisfactory arrangements to repay the loan have been made. The lender will notify credit bureaus of your default status, which will affect your credit rating and future borrowing ability. You should contact your lender immediately if you have difficulty paying.

How do I defer my loans?

About 2 weeks after the start of each term, the NLU Registrar's Office reports enrollment information to the National Student Clearinghouse. Through this, your lender will be able to verify your enrollment. If you wish to expedite this process, please complete a deferment form and send it to the Registrar’s Office. Deferment forms are available from your lender, and most can be downloaded from the lender's website.

Do I have to make satisfactory academic progress in order to receive financial aid?

Yes. Federal regulations require that students maintain satisfactory academic progress in order to be eligible to receive financial aid. For detailed information on NLU’s Satisfactory Academic Progress policy, please review this Satisfactory Academic Progress guide.



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