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Loans are disbursed by the Department of Education to the University no earlier than 10 days before the start of classes each semester.
Beginning with the 2010-2011 academic year, the Department of Education is the lender for all federal student loans (Stafford and Plus Loans) as stated in the Health Care and Education Affordability Reconciliation Act of 2010.
An amount taken off the top of the loan before the loan is disbursed (Loan Amount – Origination Fee = Amount received by school).
The Budget Control Act of 2011 eliminated the upfront origination fee rebate. If you had the rebate in previous years, please remember that the rebate must be repaid if you do not make your first 12 consecutive monthly payments on time (within six days of the due date).
Loans are split evenly between the fall and spring semesters for all students. Depending on the program, it is possible students could have their loans split into three between the summer, fall, and spring semesters.
You must get an endorser with a good credit history to co-sign your loan, appeal the denial, or decide to let the loan remain denied and your child will be offered the independent undergraduate limit in Stafford Loans.
Interest begins after the first disbursement of the loan.
Parents have the choice to select in-school deferment so that their first payment is due six months after their child drops below half-time status; otherwise, the first payment is due 60 days after the final disbursement.
Parents are only limited to the formula of Cost of Attendance minus Other Aid Received; otherwise, there is no yearly limit.
Parent Plus Loans do not currently have an aggregate limit.
Interest accrues daily starting on the day of disbursement (the day the funds are released by the Department of Education). In a typical fall and spring academic year, this means that interest begins on the first half of the loan in late August (for most programs) and on the entire loan in mid-January (for most programs).
To determine what your accruing loan interest is on a daily basis, you divide your interest rate (converted to decimal) by 365.25 (number of days in a calendar year), and this gives you the Interest Rate Factor. Then, multiply the Interest Rate Factor by your outstanding principal balance. This is the amount of interest that is accruing daily. The interest rate factor for a 7.21 percent Parent Plus Loan is 0.000197399.
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