Federal Stafford Loan

General Information
Stafford Loans are federal loans offered to eligible students regardless of need. Students must be enrolled at least half-time (based on the standards for full-time in each division).

Students who have financial need will be offered a subsidized Stafford Loan. Students will not be charged any interest before they begin repayment or during authorized periods of deferment, during which time the federal government is paying the interest on behalf of the borrower. Interest is charged during the repayment period.

Students who do not have financial need may qualify for an unsubsidized Stafford Loan. Interest on the unsubsidized Stafford will begin to accrue when the loan is disbursed and be capitalized to the principal balance when the repayment period begins.

Annual and Aggregate Stafford Loan Limits 2008 - 2009
Students may borrow a combination of subsidized and unsubsidized Federal Stafford Loans each year.

Additional unsubsidized Stafford loan limits applicable to undergraduate students are increased for loans first disbursed on or after July 1, 2008. Subsidized limits (up to base amount) are unchanged. For students enrolled as regular students in eligible programs, annual Stafford loan limits are as follows:

Undergraduate Dependent Students: $31,000 (no more than $23,000 of which can be subsidized)
Undergraduate Independent Students: $57,500 (no more than $23,000 of which can be subsidized)
Graduate and Professional Students: currently $138,500 (no more than $65,500 of which can be subsidized)

Interest on the Stafford Loan
Interest rates for Federal Stafford Loans disbursed after July 1, 2006 which are Unsubsidized and/or for graduate level study will be a fixed rate of 6.8%.

Interest rates for Federal Stafford Loans disbursed after July 1, 2008 which are Subsidized at the undergraduate level will be a fixed rate.

"Over a four-year period beginning July 1, 2008, the interest rate on subsidized Stafford Loans made to undergraduate students will be reduced. The applicable interest rates for loans made during this period are as follows:

These changes apply to subsidized Stafford loans first disbursed on or after July 1 of each year through June 30 of the next year. This change does not affect any prior loans made to borrowers; the terms and interest rates of those loans remain the same. These reduced interest rates apply only to subsidized loans; any unsubsidized Stafford Loan for the same undergraduate borrower would continue to be made at the current fixed interest rate of 6.8 percent."
Source: http://www.studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp?tab=funding

Interest rates for all Federal Stafford Loans disbursed 7/1/2006-6/30/2008 is a fixed rate of 6.8%.

Stafford Loans disbursed 7/1/1998-6/30/2006 have a variable interest rate based on the final auction of the 90-day Treasury Bill in May plus a spread.

Fees on the Stafford Loan
Stafford Loans disbursed 7/1/2008-6/30/2009 may be assessed fees of up to 2% (up to 1% origination plus up to 1% guaranty/default).

Stafford loan origination fees will be totally phased out by 2010. The 1% maximum guaranty/ default fee will remain in place. The maximum Stafford loan origination fees are:

Selecting a Stafford Loan lender
Please visit "Learn about your Stafford Lender" for more information.

Receiving the Stafford Loan
Federal Stafford loans must be disbursed in two installments. Students who are enrolled for the entire academic year will receive their first disbursement in August and their second disbursement in January. All of our streamlined lenders are sending Stafford Loan funds to Tulane via electronic funds transfer (EFT). Funds are automatically credited to accounts after students confirm their registration for the semester. Student can check their student account on-line through the Accounts Receivable website. Non-streamlined lenders may disburse funds by means of a paper check sent to the Bursar's Office. Checks are made co-payable to the student and Tulane. After confirming their registrations for the semester, students can pick up their loan checks and sign them over to Tulane to pay any outstanding charges on their Accounts Receivable balance.

Repayment of the Stafford Loan
Once a student graduates, leaves school, or drops below half-time enrollment, they will have six months before they being repayment. This is called the "grace period". During the grace period, students will not have to make any payments on the outstanding principal balance, but students with unsubsidized loans will be charged the interest. Once a student leaves school or drops below half-time enrollment, their lender will send the student information about repayment and most important, the date repayment begins. Students are responsible for beginning payment on time, regardless of if they receive this information. Students may discuss the following repayment plans with their lender:

The Standard Repayment Plan requires a student to pay a fixed amount each month - at least $50. A Graduate Repayment Plan allows a student's monthly payments to be lower at first and then increase over time. Each of the payments must at least equal the interest accrued on the loan between scheduled payments.

An Income Sensitive Repayment Plan bases a student's monthly payment on the student's yearly income and loan amount. As a student's income rises or falls, so does the monthly loan payments. Each of the payments must at least equal the interest accrued on the loan between scheduled payments.
The Extended Repayment Plan has been available to new borrowers who received their first loan on or after October 7, 1998 and who have Stafford Loan amounts totaling more than $30,000. The Extended Repayment Plan allows a student's payment to be fixed or graduated over a period of up to 25 years.

Students are permitted to pick a different repayment plan once a year if the lender allows this.

Federal Loan Consolidation
Loan consolidation is the combining of two or more existing loans into a single new loan. If you have multiple loans this can help make your finances easier to manage. To learn more about consolidation, click here. There are tax incentives for certain higher education expenses, including a deduction for student loan interest for certain borrowers. Students and parents should refer to Publications 970 at www.irs.gov or a qulified tax advisor for help.

Exit Interview
The Financial Aid Office requires students who have borrowed under the Federal Stafford Loan program and are graduating, leaving school, or have dropped below half-time enrollment to complete an Exit Interview session. During this session, counselors review the terms of the loan, borrower rights and responsibilities, and the consequences of default.

Students can complete the Exit Interview online at Mapping Your Future . The website forwards Exit Interview completions to our office. Students who use this option are encouraged to print out and hold onto their Exit Interview completion confirmation in case there is a problem retrieving that information.
For those students that do not have Internet access, you can complete the Exit Interview in person by coming to the Office of Financial Aid on the second floor of the Mechanical Engineering Building , Room 205.

Note: The average stafford loan indebtedness of an undergraduate full-time student at Tulane University is $16,620.

Loan Tracking Information
Students interested in verifying their student loan account balances can use one of the following online resources:

The National Student Loan Database System - NSLDS is the Department of Education's central database for student aid. It provides a centralized, integrated view of federal student loans and Pell Grants that are tracked through their entire cycle, from aid approval through closure. The National Student Clearinghouse LoanLocator allows students to track their student loans and obtain lender contact information. It may be accessed through the Enrollment Certification link on TOUR (Tulane Online University Records).
ELM Resources Student Loan Inquiry or ELMNet Loan Inquire - ELM Resources provides two services that allow students to view the most recent information on their student loan, including status in the origination process, disbursement dates and amounts.

Limit Your Level Of Borrowing: Choices and Adjustments
Whether you've been in school recently, or away from school for awhile, it is critical that you review your particular lifestyle and financial resources. Going to school may require an adjustment to your spending habits. A more frugal lifestyle may seem like a difficult sacrifice, but it should be viewed as a temporary measure that will be well worth the short- term inconvenience. For every dollar you can reduce your current borrowing, you'll experience substantial savings in loan repayments. Consider the following suggestions for reducing expenses: Housing: Share the cost of rent with a roommate(s), as it is always less expensive than living alone. Consider campus housing, if available. Get a sublet clause in your lease if you plan to leave for the summer. Telephone: If you have a problem controlling your long distance spending, ask your phone company to set your phone to only receive long distance calls. You can then budget for and purchase phone cards for use that will limit you to prepaid long distance minutes. Use e-mail. Make long distance calls during reduced rate periods. Transportation: Do NOT buy a car! Financial aid cannot cover the costs of car payments. Car-pool or use university/public transportation. Bicycle or walk whenever possible (this is also healthy). Take a higher deductible on your auto insurance. Consider dropping collision insurance coverage on older cars that are paid in full. Shopping: Watch for sales. Never buy on impulse, even if it is a good buy. Ask yourself if you really need it or do you just want it? Buy non-perishable items in bulk. Avoid vending machines, fast food, and convenience stores. Don't buy something just because you have a coupon for it. Store brands or generic products may be cheaper than the name brand with a coupon. Acquire inexpensive clothing at local second hand clothing stores and discount stores. Entertainment: Planning for recreational activities should be done within the limits of your budget. As part of a university community, you may be able to use your student status and ID for discounts at movies, plays, museums, and other cultural activities in the New Orleans area. When eating out, see if the restaurant has early bird or all-you-can-eat specials. Cancel the cable. You will probably not have much time for television anyway. Rent movies and exchange rentals with friends before they have to be returned. Use the library instead of buying books. You can also check out videos and book cassettes. Banking: Comparison shop for bank services. Look for free checking, free checks, and no-fee ATM usage. Use ATMs owned by your bank to avoid surcharges. If you cannot get a no-fee ATM at your bank, withdraw $100 instead of $50 when you need cash. Sign up with a credit union to possibly minimize your banking costs. Planning Ahead - If your resources are limited, you must plan your budget carefully. - Planning your budget wisely will reduce your debt burden in the future; the less you spend while in school, the less you will need to borrow, and the lower your loan repayments will be. - Determine the total amount you might borrow while attending Tulane and then estimate what your monthly payment would be after graduation. Compare your monthly student loan payment with the anticipated salary you expect to receive in the future so you can decide what level of student loan debt is affordable. - Making wise spending choices may determine whether or not you will be able to afford to attend school and will influence your future financial goals. - Pay off credit card debt before school begins as your budget should only include current living expenses and financial aid resources should NOT be used to pay prior credit card balances.