Quiz QuestionsLoan Types
Federal Stafford Loan Borrowing Limits
A Federal Stafford Loan (FSL) is a loan given by a private lender (e.g., bank, credit union,
or other financial institution) to students. The interest rate is fixed at 6.8% for loans first disbursed on, or after July 1, 2006. The interest rate cannot exceed 8.25%.
There are two types of Federal Stafford Loans - subsidized and unsubsidized.
You may borrow up to the following annual loan limits (subsidized and unsubsidized FSL
combined) based upon your year of study: first-year students $2,625; sophomores $3,500; juniors, seniors and fifth-year students $5,500. The maximum is $23,000 for undergraduate study.
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Subsidized Federal Stafford Loan Borrowing Limits
A subsidized Federal Stafford Loan (FSL) is a loan given by a private lender (e.g., bank,
credit union or other financial institution) to students with financial need. You begin
repaying the loan six months after you either graduate or cease to be enrolled at least
half-time (18 units per semester).
The interest on a subsidized FSL is paid by the federal government while you remain enrolled
at least half-time and during your six-month grace period. You have up to 10 years to repay
your loan.
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Unsubsidized Federal Stafford Loan Borrowing Limits
An unsubsidized Federal Stafford Loan (FSL) is available to students who do not qualify, in
whole or in part, for a subsidized Federal Stafford Loan. It is not based on financial need.
The annual borrowing limits are the same as the subsidized FSL program amounts listed in the
chart on the following page.
Unlike the subsidized FSL, you are required to pay the interest that accumulates on the
unsubsidized FSL every three months while you are in school. It is possible to have the
interest capitalized (instead of paying the interest every three months, it is added back to
the principal). This will increase the amount you have to repay.
We suggest you pay the interest as it accumulates, as you'll repay less in the long run.
You may be eligible for additional unsubsidized FSL funds (beyond the FSL limits stated
above) if your parent(s) apply for a Federal PLUS Loan and are denied.
If this is the case, the maximum you may borrow annually in additional unsubsidized FSL funds
based upon your year of study is as follows: first-year students $4,000; sophomores $4,000;
juniors, seniors and fifth-year students $5,000.
The aggregate total (subsidized, unsubsidized and additional unsubsidized FSL combined) is
$46,000 for undergraduate study; however, only $23,000 of this total can be in subsidized FSL
funds.
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Federal Perkins Loan
Borrowing Limits
A Federal Perkins Loan is a low-interest (5 percent) federal loan administered by Carnegie
Mellon. Carnegie Mellon offers this loan to students who have exceptional financial need as
determined by Federal Methodology and Carnegie Mellon. You receive consideration for a
Federal Perkins Loan if you complete a FAFSA or Renewal FAFSA and a
Carnegie Mellon Financial Aid Application. There is no separate application for this loan.
Enrollment Services will automatically credit the loan to your student account (one-half in
the fall, one-half in the spring).
If you are offered a Federal Perkins Loan, Enrollment Services will notify you regarding the signing of your Perkins Master Promissory
Note during the Summer.
Signing your MPN does not guarantee future funding. Future funding will be based on need (obtained from future FAFSAs) and fund availability. Signing this MPN may also affect future eligibility for other forms of financial assistance.
Repayment of both principal and interest does not begin until nine months after you graduate
or are no longer enrolled at least half-time (18 units per semester). No interest accrues on
the loan until you begin repayment. You have up to 10 years to repay your loan.
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Federal Stafford Loan Eligibility
To qualify for a Federal Stafford Loan Program a student must first submit the Free Application
for Federal Student Aid (FASFA) and a Master Promissory Note (MPN). The student must be enrolled
at least half-time in a degree seeking program.
To retain eligibility for future semesters, a student must maintain satisfactory academic
progress. Male students who are at least 18 years of age must be registered with the Selective
Service Commission. Students must be citizens or permanent residents of the United States.
Students cannot be in default of any loan programs nor owe any refunds of federal grants.
Students in default may have their eligibility restored if they have made satisfactory
arrangements with the holder of the loan to repay it. Transfer and graduate students must submit
to The HUB an official Financial Aid Transcript that documents their financial aid record at all
previous institutions attended.
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Federal Stafford Loan Levels
The amount a student may borrow per academic year is determined in part by the number of credits
a student has earned. Please refer to this limits chart to determine your possible eligibility.
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Loan Interest Rates
Interest rates on Federal Perkins Loans are fixed at 5%.
The interest rate based on current regulations for new Federal Stafford Loans first disbursed on, or after July 1, 2006, will now be a fixed rate of 6.8 %. The interest rate for new Federal Parent Plus loans will now be at a fixed rate of 8.5%.
The interest rate for Federal Stafford Loans and Plus loans first disbursed prior to July 1, 2006 (Between July 1, 1998 and June 30, 2006) will remain variable, and will continue to be set annually, on July 1. The interest rate on Federal Stafford Loans cannot exceed 8.25%. The interest rate on a Federal Plus Loans cannot exceed 9%.
Students should contact their lenders to receive current information on
interest rates. In addition to the interest charges, students must pay an "origination fee" and
"insurance premium" of approximately 1 to 4 percent of the amount of the loan. The lender deducts
this amount from the value of the loan.
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Loan Repayment
Repayment of the Federal Stafford Loan begins when a student either graduates, withdraws, or
enrolls less than half-time and has used the allowable grace period - usually six consecutive
months (nine months for Federal Perkins Loans). Students are obligated to repay the full amount
of the loan even if they do not graduate, are unable to obtain employment, or are dissatisfied
with the services received at Carnegie Mellon University. You must make payments on your loan
even if you do not receive a bill or repayment notice. Billing statements (or coupon books) are
sent to you as a convenience, but you are obligated to make payments even if you do not receive
any notice.
Repayment Calculator
Federal Perkins Loan Repayment Schedule
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Withdrawal And Refunds If you withdraw from school before the end
of a semester, a refund calculation will be performed complying with Federal requirements. If you
do not complete a term, you may not be entitled to retain the full amount of aid you received
originally. Student Financial Aid (SFA) programs are refunded in the following order:
Unsubsidized Federal Stafford Loans, Subsidized Federal Stafford Loans, Federal PLUS Loans,
Federal Perkins Loan, Federal Pell Grant, Federal Supplemental Educational Opportunity Grant,
other Title IV Aid Programs, other federal, state, private, or institutional aid, and the
student.
You must complete the following question
in order to progress to the next page of information
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QUIZ QUESTION:
I will be responsible for repaying my loan even if I do not graduate, am not satisfied with
my education, or do not get a bill. False
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