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The Federal Stafford Loan is available through the Federal Family Educational Loan Program (FFELP) to help both undergraduate and graduate students pay for their education. There are two types of Stafford Loans - subsidized and unsubsidized.

Eligibility for subsidized loans is based on financial need as determined by federal guidelines. A loan is called "subsidized" because the government pays interest for the student during:

• At least half-time enrollment in school

• The six-month grace period after the student ceases attendance on at least a half-time basis.

This type of loan is available to students regardless of income or need. With an unsubsidized loan, you are responsible for all interest that accrues during in school, grace and deferment periods. You may choose to pay the interest portion only while in school, which would keep your loan balance at principal. If you choose to defer such payments, the interest will be capitalized, resulting in an increase in both total debt and the amount of monthly payments.

• If the interest rates rise above the current federally mandated cap (8.25%), you do not pay additional interest.

• It carries low origination and guarantee fees. Many other loans have significantly higher fees.

• Repayment of the loan does not begin until you graduate or drop below half-time status.

• In case of economic hardship, payments may be deferred, extended, or reduced.

• The loan is forgiven in case of permanent disability or death.

Loans are issued for a single academic year, and both eligibility and amount are determined annually throughout your academic career.

• After completing your (FAFSA) Free Application for Federal Student Aid, you will receive a Student Aid Report (SAR) documenting your financial resources and expected family contribution towards educational costs. (An electronic copy will be sent to our office.) You must complete a loan request or complete a paper loan request form which is available in the ASUN Financial Aid Office.

• From the information obtained in the SAR and other supporting documents, we will generate and send you a Financial Aid Award letter documenting the financial aid available to you including Stafford Loan eligibility. The student may accept all or a part of the aid by signing and returning a copy of the Financial Aid Award letter to the ASUN Financial Aid Office. We cannot begin processing your loan until this document is received.

• If the student is a first time loan borrower, the student must complete Loan Entrance Counseling on the Web. Once the Financial Aid Award letter has been signed and returned and the Loan Entrance Counseling has been completed, you will receive an email from SLGFA prompting you to go to opennet.salliemae.com to complete an (MPN) Master Promissory Note.

• If a student has had loans in the past and wants to remain with the same lender, it will not be necessary for you to sign another MPN for at least 10 years.

• Once the guarantee agency approves your loan, you will receive a Notice of Guarantee and Disclosure Statement (one document). This is your notice of approval, and it contains essential information about the terms and conditions of your loan. It also tells you the amount of your loan and an estimated date for the arrival of funds. It explains the possible actions that can be taken against the student if they do not repay the loan. Students should read the form carefully.

• Disbursements of Funds - A check or Electronic Funds Transfer (EFT) will be sent directly to our school. The amount of the proceeds will be the loan amount less the fees. The loan funds will be sent in one or two disbursements. You will pick up your loan funds at the ASUN Business Office. If you are not using a preferred lender, your funds will be mailed to us in the form of a paper check and this process may vary.

• NOTE: schools can refuse to certify a loan application or can certify a loan for a lesser amount than the student would otherwise be eligible for, if the school documents its reason for its action and explains its reason in writing. The school's decision is final and cannot be appealed to the U.S. Dept. Of Education.

• Students who have questions about their loan, or decide that they do not need the loan, should contact the lender. This will give the student the option of canceling the loan without penalty.

• Student loans are to be used only for educational expenses at the college that completes the application. As such, the proceeds from the checks will be applied first to any outstanding debt you have at Arkansas State University-Newport. A check will be processed for any remaining funds and will be available at the Business Office.

Keep a copy of all documents in one file: a copy of each loan application, each notice of loan disclosure, and any other correspondence received about your loan or other financial aid program

Borrowing limits are based on your dependency status and year in school. You are considered independent if you:

• were born before January 1, 1984; or

• will be working on a degree beyond a bachelor's degree during the school year; or as of today, are married; or

• have children who receive more than half of their support from you; or

• have dependents (other than your children or spouse) who live with you and receive more than half of their support from you, now and through June 30, 2008 or

• are an orphan or ward of the court or were a ward of the court until age 18; or

• are a veteran of the U.S. Armed Forces

If you do not meet any of the above criteria, you are considered a dependent student for financial aid purposes.

You can never borrow more than the cost of education, less other financial aid received (special rules apply for recipients of Montgomery Chapter 30 VA benefits and Americorps benefits). Below are the maximum amounts you may borrow.

If dependent, your combined subsidized and unsubsidized Stafford annual eligibility is as follows:

	Freshman	Sophomore
Subsidized and/or Unsubsidized	$3,500	$4,500

If independent, your subsidized and unsubsidized Stafford annual eligibility is as follows:

	Freshman	Sophomore
Subsidized	$3,500	$4,500
Unsubsidized	$4,000	$4,000
Total	$7,500	$8,500

Total Indebtedness	# of Payments	Amount of Payment
$2625	65	$50
$4000	120	$50
$7500	120	$91.99
$10,000	120	$122.65
$15,000	120	$183.98

Loan Request Forms