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Subsidized loans do not incur interest until after graduation*, while unsubsidized loans begin incurring interest upon disbursement. *Please note that subsidized loans disbursed before June 30, 2012, do not begin to incur interest until after the grace period ends.
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 date due).
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 among the summer, fall, and spring semesters.
The Budget Control Act of 2011 eliminated subsidized loans for graduate and professional students. You are still eligible for the full Stafford Loan amount, but now the entire amount is unsubsidized.
Subsidized loans are need-based loans awarded based on the results of the FAFSA. The counselors must compare the Expected Family Contribution (EFC) as determined by the FAFSA to the total Cost of Attendance (COA) and other need-based aid received to see if the student has eligibility for subsidized loans.
Yes, awards are based on that year’s FAFSA, not on what was accepted last year. Please note that awards are not guaranteed to stay the same from year to year and can vary greatly based on changes in students' need, changes in funding, and changes in regulations.
There can be several reasons for this. 1. You listed the wrong year in school on your FAFSA and were therefore awarded with the lower amount. Please correct your FAFSA and contact your counselor. 2. You have reached your aggregate limit in Stafford Loans. 3. You have reached your total Cost of Attendance.
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 6.21 percent Stafford Loan is 0.000170021.
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