FEDERAL STAFFORD AND PLUS LOAN AVAILABILITY
There has been considerable publicity recently regarding lenders who are no longer participating in the Federal Stafford Loan (student) and PLUS Loan (parent) programs. We have been assured by a number of national lenders that our families will not have any difficulty in obtaining Stafford and PLUS Loans for 2008-2009. (As always, potential PLUS Loan borrowers must be judged credit-worthy in order to obtain funding.)
Click here for a discussion of "Facts and Myths" regarding the student loan "credit crunch" prepared by the National Association of Student Financial Aid Administrators (NASFAA).
Student loans are self-help awards which must be repaid.
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 and a Carnegie Mellon 2008-2009 Financial Aid Application. There is no separate application for this loan program. 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 over the summer. 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.
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%. 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 combines) based upon your year of study:
first-year students: $3,500
sophomores: $4,500
juniors, seniors and fifth-year students: $5,500
The maximum is $23,000 for undergraduate study.
A Federal PLUS Loan is a non-need based loan given by a private lender (e.g., bank, credit union or other financial institution) to creditworthy parent(s).The interest rate is fixed at 8.5%. Many lenders offer additional borrower benefits that reduce the interest rate considerably. Interest starts to accrue at disbursement, however full repayment of principal and interest begins 60 days after the last disbursement for the loan period. The maximum repayment period is 10 years.
A complete list of Carnegie Mellon's recommended lending partners, including borrower benefits, will be available online at the end of May 2008. Regardless of our recommended lenders, we will process any loan from any lender, federal or alternative.