Learn About Your Lender Parent PLUS Loans Federal Stafford Loans

Student Financial Services

The Federal Stafford Loan Program

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Federal Stafford Loans

General Information
Stafford Loans are federal loans offered to eligible students regardless of need. Students must be enrolled at least halftime (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. The federal government subsidizes the interest during this time.

Students who do not have financial need can qualify for an unsubsidized Stafford Loan. With an unsubsidized loan, students will be charged the interest on the loan while they are in school or they can choose to capitalize the interest and have it added to their principal balance.

Annual and Aggregate Loan Limits
Students may borrow a combination of subsidized and unsubsidized Federal Stafford Loans each year. The annual loan limits for students in 2007-2008 are as follows:

• $3,500 for the freshmen year
• $4,500 for the sophomore year
• $5,500 for the remaining undergraduate years
• $20,500 for graduate level (of which $8,500 is the maximum amount that can be subsidized)

The aggregate loan limit for dependent undergraduate students is $23,000.
The annual loan limits for independent undergraduate students, dependent students whose parents have been denied for a PLUS loan are as follows:

• $7,500 for the freshmen year (only $3,500 of this amount may be subsidized)
• $8,500 for the sophomore year (only $4,500 of this amount may be subsidized)
• $10,500 for the remaining undergraduate years (only $5,500 of this amount may be subsidized)

The aggregate loan limit for independent students or dependent students whose parents have been denied for a PLUS loan is $46,000 (only $23,000 of this amount may be subsidized).

The aggregate loan limit for graduate students is $138,500 (only $65,500 of this amount may be subsidized).

Interest on the Stafford Loan for the 2007-2008 Academic Year
On February 8, 2006 President Bush signed the Deficit Reduction Act which set the interest rates for the Federal Stafford and Federal PLUS loan programs. Interest rates for Stafford loans disbursed on or after July 1, 2006 will be at a fixed interest rate:
6.80 percent fixed rate

• For Stafford loans disbursed July 1, 1998 through June 30, 2006 the interest rate is variable.  This rate is based on the final auction of 90-day Treasury Bills held prior to June 1. 

Selecting a Stafford Loan lender
Please visit our “Learn about your Lender” section of our loan website.

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 Warner Southern via electronic funds transfer (EFT).

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. You payment depends of the amount of funds borrowed.

• 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.

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. The financial aid office has literature available for informational purposes only. To request information send an email to financialaid@warner.edu (this is an email address). Students and parents should refer to Publications 970 at www.irs.gov or a qualified 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 has 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, and 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 Financial Aid Office.
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 Loan Clearinghouse Loan Locator – The Loan Locator allows students to track their student loans and obtain lender contact information.
• Website – You may view your most recent loan activity through ASA (American Student Assistance).
 
LIMIT YOUR LEVEL OF BORROWING

Choices and Adjustments
Whether you've been in school recently, or away from school for a while, 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:

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 college 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 Lake Wales 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 Warner 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.

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