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General Loan Information     Federal Direct Loans    Other Loans


Federal Subsidized Loan

Federal Subsidized Loans are need-based; therefore, students must demonstrate financial need to be eligible. These loans are called "subsidized" because the government pays the interest while you are in school. If you take out one of these loans, the federal government pays the interest while you are either in school or in any other declared deferment status. First year students (0 to 31 credit hours) may borrow up to $3500. Second year students (32 to 63 credit hours) may borrow up to $4500. Third and Fourth year students (64 or more credit hours) may borrow up to $5,500. Graduates are not eligible to borrow subsidized loans.

Federal Unsubsidized Loan

Federal Unsubsidized Loans are also available to help you meet your cost of education. These loans are non need-based loans; therefore, students are responsible for paying the interest while attending school and during any other declared deferment periods. The interest is compounded quarterly. First and second year Independent students may borrow up to $4,000 per academic year. Third and fourth year Independent students may borrow up to $5,000 per academic year. Graduates may borrow up to $20,500 per academic year.

Proration

Loan applicants who expect to graduate during the current academic year or who are enrolled for less than one year will have their loans prorated. Please contact the Financial Aid Office if you have any questions regarding this issue.

How to apply?

Before applying for a Stafford loan, students must first apply for Federal Financial Aid by completing the Free Application for Federal Student Aid (FAFSA). This application determines eligibility for loans. See the "How to Apply" section in this guide for further information. Once the institutional FAFSA (file) is complete, students may apply for a Stafford loan. This procedure must be followed even though students feel they may not be eligible for a grant.

Where and when will you be paid?
  • All Stafford Loan recipients receive their loan amounts in one or two disbursements.
  • Electronic Fund Transfers are done every Wednesday and credited to student accounts. Refund checks are generally available the same week, however distribution of refund checks is subject to change during holidays. Check with the WNMU business office for refund disbursement schedules.
  • Students who drop below half-time (6 credit hours) during a term in which funds were received will have all subsequent disbursements canceled and the six-month grace period will begin. At the end of that grace period, students must begin to repay on their loans.
Repaying Your Loan

The chart below shows estimated monthly payments and total interest charges for 8.25 percent loans of varying amounts, with typical repayment periods. Your rate may be lower depending on the market T-Bill rate. Minimum payments generally start at $50 a month.

Examples of Fixed Repayment Plans

Total Loan Amount # of Payments Monthly Payments Interest Charges Total Repaid
$2,600 65 $50.00 $628.42 $3,228.42
$4,000 120 $50.00 $1,827.30 $5,827.30
$7,500 120 $91.99 $3,538.80 $11,038.80
$10,000 120 $122.65 $4,718.00 $14,718.00
$15,000 120 $183.98 $7,077.60 $22,077.60

Source of graph: National Council of Higher Education Loan Programs, Inc. (NCHELP), 1992

It is extremely important to retain the Notice of Loan Guarantee (NOG); it details the interest rate, the type of loan you have, total amount borrowed (provided that all loans have been processed through the same guarantee agency), and your projected monthly payment. The interest on your Stafford loan is a variable interest rate, which means that it changes with the market from year to year. These loans are made by the US Department of Education and they are guaranteed by a guarantee agency and insured by the federal government.

Repayment of loans: There are graduated repayments, fixed repayments, and income-sensitive repayments. Another repayment option is loan consolidation. Students who have taken out more than one student loan may be able to pay them all back using one repayment plan. Interest rates may change since consolidation of loans is based on a weighted average rounded up to the nearest whole percent. Only Stafford and Educational Loans for Students are eligible for consolidation. Contact your loan service provider for more information.
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