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Am I eligible for this loan?
You must be enrolled at least half time in an
eligible program of study.
How much can I borrow with this loan program?
If you are an independent undergraduate student
or a dependent student
whose parents are unable to get a PLUS loan, you can
borrow up to:
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$6,625
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if you are a first-year student enrolled in a program of study that
is at least a full academic year (if you combine subsidized and
unsubsidized loans, no more than $2,625 may be in subsidized loans).
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$7,500
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if you have completed your first year of study and the remainder
of your program is at least a full academic year (if you combine
subsidized and unsubsidized loans, no more than $3,500 may be in
subsidized loans).
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$10,500
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if you have completed two years of study and the remainder of
your program is at least a full academic year (if you combine
subsidized and unsubsidized loans, no more than $5,500 may be in
subsidized loans).
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As an independent undergraduate student, you
can have a total outstanding
debt of $46,000 (with no more than $23,000 in subsidized loans). Check
with your financial aid office to
determine eligibility.
How can I get this loan?
You first must complete the Free Application for
Federal Student Aid (FAFSA)
or Renewal FAFSA. After the FAFSA is processed, your school will
review
the results and inform you about your loan
eligibility. Next you must complete
the Master Promissory Note (available from a lender,
guarantor, or financial
aid office), which is the promissory note for your loan.
When will I get my money?
In most cases, your loan will be disbursed in two
installments. Your loan
money will be used to pay your tuition and fees. If loan money remains, your
school will credit your account or pay you
directly. Lenders send funds
directly to your school.
Can I cancel the loan?
Yes. Your school must notify you in writing
whenever it credits your account
with your loan proceeds. This notification must be sent to you
no earlier than
30 days before and no later than 30 days after the school credits your
account. You may cancel all or a portion of your loan if you
inform your school
within 14 days after the date that your school sends you this notice or by the
first day of the payment period, whichever is
later. Your school can tell you
the first day of your payment period.
What is the interest rate of this loan?
The interest rate on your loan could change each
year of repayment but by
law, it will never be more than 8.25 percent. You will be charged
interest from
the day the loan is disbursed until it is repaid in full. You can choose to pay
the interest during this period, or it can be added to
the principal balance
through a process called capitalization.
Are there any special fees I will pay?
Many guarantors no longer charge a guarantee
fee for education loans but if
they do, this fee could be up to 1 percent of the loan amount.
Additionally,
your lender may charge an origination fee up to 3 percent of the loan
amount.
Guarantee and origination fees, if charged, are deducted from the loan funds
before they are sent to the school.
What are my repayment options?
The normal repayment term for this loan is 10
years. You may be able to
extend repayment by deferring or consolidating your loans. You can choose one of the following plans:
-The Standard Repayment Plan requires you to pay a fixed amount
each month-- at least $50 or the interest that has accrued.
-The Graduated Repayment Plan sets your payments lower at first
and then increases them over time. Each of your payments must equal
the interest accrued on the loan between scheduled
payments.
-The Income-Sensitive Repayment Plan bases your monthly
payment on your yearly income and your loan amount. Payments may
change as your income rises or falls.
-The Extended Repayment Plan is for borrowers with FFELP loans
totaling more than $30,000. This plan offers a choice of fixed or
graduated payments over a period of up to 25
years.
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