Stafford Loan - General Information
Step by Step Loan Instructions - First Time Borrowers (PDF) | Returning Students (PDF)
Federal Stafford Student Loan Program
Lender List 2008-2009 - You have the option to use a lender from this list or use any other lender of your choosing. These lenders meet or exceed criteria that are valuable to our students and college and were chosen via an annual evaluation process where they were scored based on a model provided by the National Association of Financial Aid Administrators (NASFAA). You are not required to use one of these lenders - your lender is your choice.
On-line Entrance Interview - to be completed by first-time borrowers.
On-line Application & Loan request form
On-line Exit Interview - to be completed by borrowers who are graduating or leaving Hanover College.
National Student Loan Database System (NSLDS) - View your Federal Stafford Loan borrowing history in the federal loan database.
Federal Stafford Loan Program for the 2008-2009 Academic Year
A Stafford loan is a government guaranteed loan offering low interest rates and deferred payment options. There are two types of Stafford loans – subsidized and unsubsidized.
Eligibility for a Federal Stafford Loan
To be eligible, you must:
- Be a U.S. citizen or eligible non-citizen
- Have a high school diploma or GED certification
- Not be in default on any other student loans
- Be enrolled at least half time in an accredited degree program
- Complete the FAFSA (Free Application for Federal Student Aid) each year
Subsidized Federal Stafford Loans
Students that meet certain financial need criteria may qualify for a Subsidized Federal Stafford Loan. The federal government pays the interest on the subsidized loan while students are enrolled at least half time, during the six-month grace period, and when they qualify for an authorized deferment.
Unsubsidized Federal Stafford Loans
Students who do not qualify for a Subsidized Stafford Loan may be eligible for an Unsubsidized Stafford Loan. The federal government does not pay the interest on an unsubsidized loan. Students have the option of paying the interest while they are in school or they can choose to have the interest added to their principal balance through a process called capitalization.
Federal Stafford Annual Loan Limits for the 2008-2009 Academic Year
| Dependent Students | Base | Additional Unsubsidized | PLUS Loan Denial Subsidy* |
Annual Maximum Amount |
| Freshmen | $3,500 | $2,000 | $4,000 | $9,500 |
| Sophomore | $4,500 | $2,000 | $4,000 | $10,500 |
| Junior/Senior | $5,500 | $2,000 | $5,000 | $12,500 |
| *Dependent students with a parent that has been denied a PLUS loan may be eligible for the unsubsidized PLUS loan denial subsidy. Please contact us for additional details. | ||||
| Independent Students | Base | Additional Unsubsidized |
Annual Maximum Amount |
| Freshmen | $3,500 | $6,000 | $9,500 |
| Sophomore | $4,500 | $6,000 | $10,500 |
| Junior/Senior | $5,500 | $7,000 | $12,500 |
Interest Rate
Beginning with loans disbursed on or after July 1, 2008, the interest rate on all subsidized Stafford loans will be fixed at 6.00% and the interest rate for all unsubsidized Stafford loans will be fixed at 6.80%. For loans disbursed between July 1, 2006 and June 30, 2008, the interest rate on all Stafford loans was fixed at 6.8%. For loans disbursed prior to July 1, 2006, the interest rate was variable and capped at 8.25%. All lenders offer the same rate for the Stafford Loan, although some may offer interest rate reductions or credits.
Payment Terms
Your loan payments may be deferred until six months after graduation or six months after you cease to be enrolled at least half time. You typically have 10 years to pay off your Stafford loan. There are no prepayment penalties on a Stafford loan.
Fees
There may be a combined fee of up to 2.0% of the loan amount, comprised of a 1.0% origination fee and a 1% federal default fee. These fees are deducted from each loan disbursement so that you are not required to pay any up-front money to obtain the loan.
Disbursement of the Loan
- For academic year loans, the first disbursement will be paid at the beginning of fall semester and the second disbursement at the beginning of winter semester. For semester loans, the disbursement will be paid at the beginning of the semester.
- In most cases the funds will be disbursed to the school electronically (EFT). Proceeds will be applied to any outstanding educational charges including tuition, fees, room and board. The Business Office will notify the borrower when the disbursement is received. If the loan proceeds create a credit balance the borrower will need to contact the Business Office to receive a refund, to receive a book voucher or to instruct them to return loan funds to the lender.
- Some disbursements may be made by co-payable check to the borrower and Hanover College. The borrower will be contacted by the Business Office to endorse the check before the student account can be credited.
