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 2009-2010. (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).
RECOMMENDED FEDERAL STAFFORD LOAN LENDERS
Our website provides a comparative list of Carnegie Mellon’s recommended lenders for the 2009-2010 academic year and explains our process for selecting recommended FFELP and Private lenders.
Students and parents have the right to select the lender of their choice and are not required to use any of our recommended lenders. Borrowers will not be penalized for selecting a lender that is not included on our recommended lender list.
Click here for a list of our recommended Federal Stafford Loan lenders.
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 for subsidized Federal Stafford Loans is 5.6% for loans first disbursed on or after July 1, 2009. The interest rate for unsubsidized loans is fixed at 6.8%.
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 $31,000 for undergraduate, dependent students (no more than $23,000 of which can be subsidized); and $57,500 for undergraduate, independent students (no more than $23,000 of which can be subsidized).
To apply for an FSL, you must complete and submit the following:
FAFSA
Carnegie Mellon Financial Aid Application
Signed copy of your parent(s)' 2008 Federal Income Tax Return or Foreign Income Tax Return1
Parental W-2 Wage and Tax Statements
Signed copy of your Federal Income Tax or Foreign Income Tax Return1
Entrance Loan Counseling Session - First-Time Borrowers
If you are required to file a Federal Income Tax Return in a country other than the United States, you must provide us with a copy of your foreign tax return and provide tax information translated into U.S. dollars on a 2008 U.S. Federal Income Tax Return. This document must be signed by you and a tax accountant.
If you are not required by the U.S. Internal Revenue Service (IRS) to file a Federal Income Tax return or to file a tax return in any other country, you are required to provide a list of employers and the source(s) of any additional income for 2008.
2First-Time Borrower: If you are a first-time borrower at Carnegie Mellon, you must complete a Stafford Loan MPN online. View our list of recommended lenders and apply directly through the website listed.
Repeat Borrower: If you previously borrowed a Federal Stafford Loan and completed an MPN, you do not need to complete another MPN for each subsequent academic year.
In most cases, your FSL funds will be electronically deposited into your student account at Carnegie Mellon on or about August 20, 2009 for the Fall 2009 semester, and on or about January 7, 2010 for the Spring 2010 semester. In some cases, you may be required to sign your FSL check in The HUB before the loan proceeds can be credited to your student account. You should subtract approximately one-half of your annual FSL from the balance due appearing on your Fall and Spring Invoices.
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.
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.
Note: Students who do not apply for financial aid but plan to borrow a Federal Unsubsidized Stafford Loan, are required to complete a FAFSA. Please contact an Assistant Director in The HUB to initiate this process.
The annual borrowing limits are the same as the subsidized FSL program:
ESTIMATED FEDERAL STAFFORD LOAN CREDITS | ||
Use this chart to estimate the amount we will credit to your student account each semester. | ||
| Class | Maximum Loan Eligibility | Estimated Semester Credits |
| First-year student | $3,500 | $1,715 |
| Sophomore | $4,500 | $2,205 |
| Junior | $5,500 | $2,695 |
| Senior | $5,500 | $2,695 |
| Fifth-year student | $5,500* | $2,695 |
| * The aggregate loan limit for Federal Stafford Loans is $31,000 for undergraduate, dependent students. If you borrow the maximum throughout your attendance, then you will be limited as a fifth-year student. | ||
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. Click HERE for more information.