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Federal Student Loans

Subsidized vs. Unsubsidized
Eligibility & Borrowing Limits
Interest Rates & Fees
Repayment

LOANS CANNOT BE CERTIFIED AFTER THE LAST PUBLISHED DAY OF FINALS.

The last day of the summer term is August 7, 2009.  We must have your loan documents in the office by July 27th to allow for your loan to be processed and certified .
Subsidized vs. Unsubsidized Loans

1. Federal formula when you complete your FAFSA. The loan is “subsidized” because the government pays the interest for you during the following periods:

• While you are enrolled in school at least half time.
• During the six-month grace period after you stop attending school at least half time.
• During Periods of authorized deferment.

2. The Unsubsidized Federal Stafford Loan, on the other hand, is available to all students regardless of income. Because the government does not subsidize this loan, you are responsible for all interest that accrues while you are in school, in deferment or during your grace period. You may choose to make interest payments while in school or may defer (and accumulate) the interest until repayment. The interest will be capitalized after the grace period.

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Eligibility & Borrowing Limits

To be eligible for either type of Federal Stafford loan, you must satisfy the following conditions:

1. Enrolled, will enroll, or are admitted to an eligible school at least half-time.
2. Citizen or permanent resident of the U.S., or permanent resident of an eligible trust territory.
3. Not currently in default, or do not owe a refund on any Title IV programs: Federal Pell, SEOG, Work-Study, subsidized Stafford, unsubsidized Stafford, SLS, Consolidation Loan.
4. Maintaining satisfactory academic progress.
5. Have satisfied all Selective Service Act requirements.

The annual limits for Subsidized Federal Stafford loans are:

The proceeds from both subsidized and unsubsidized Federal Stafford loans are sent to Brewton-Parker College electronically. In most cases, at least two payments will be made. The U.S. Department of Education requires new borrowers to wait until 30 days after the first day of the enrollment period to receive the first payment. This is done so you won't have to repay the loan if you don't begin classes or if you withdraw during the first month of school.

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Interest Rates & Fees

Stafford loans have a fixed interest rate of 6.8% for loans with a fist disbursement after July 1, 2006.  (Previously, Stafford loans had variable interest rates, based on 91-day T-bill rate + 1.7% during school with an additional 0.6% increase upon graduation, capped at 8.25% or less, depending on yearly adjustments.)  All lenders offer the same rate for the Stafford loan, although some give discounts for on-time and electronic payment. 

The College Cost Reduction and Access Act of 2007 reduced the interest rates on subsidized Stafford loans for undergraduate students beginning July 1, 2008.  These reductions are available only to undergraduate students and only for subsidized Stafford loans, not unsubsidized Stafford loans.  More student and PLUS loan interest information can be found through this link:  earates052808

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Repayment

The principal repayment period for the Federal Stafford loan begins automatically six months after you drop below half-time attendance and lasts for up to 10 years. (If you owe $30,000 or more on your Stafford loans and you took out your first loan on or after October 7, 1998, you may take up to 25 years to repay them.) You must repay the loan even if you are unable to find a job in your field, believe your school owes you a refund or are displeased with your education and don't complete the program.

Many loan companies have repayment incentive programs. These are rewards that are set up for students who make payments on time.

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