Program Description

The Federal Stafford Loan Program is the best financing option for a student to pursue and should be considered before any private alternative educational loan options.  The loan is available to students regardless of the level of financial need.

Subsidized Loan

This federal educational loan is available to students who demonstrate financial need. It is available to students accepted/enrolled on at least a half time basis in an undergraduate degree program.

Unsubsidized Loan

This federal loan was established by the federal government for students who are not eligible or have limited eligibility for the subsidized Federal Stafford Loan. Students may borrow under the same terms as the subsidized Federal Stafford Loan program with one exception: the government does not pay the interest on an unsubsidized loan (note: see difference in interest rate below).  The student either pays all interest that accrues on this loan during the time of enrollment, grace period and repayment, or may capitalize the interest during the period of enrollment.

Lender List

You may select any lender or guarantor that participates in the Federal Stafford Loan program.  However, listed below are participating lenders who have a proven commitment to the Federal Stafford Loan program and who have consistently demonstrated superior customer service.

Chase Bank (JP Morgan Chase Bank N.A.)

Citizens Bank

PNC Bank

Wachovia Education Finance

Wells Fargo Bank

Loan Amounts (effective July 1, 2008)

There is a $23,000 total borrowing limit for Dependent Undergraduate students and a $57,500 limit for Independent Undergraduate students of which no more than $23,000 may be in subsidized loans. Graduate students may borrow a total of $138,500, however, no more than $65,500 of this amount may be in subsidized loans.

Disbursements

Stafford loans are normally disbursed two times per year, usually at the beginning of each term for loans that will be disbursed over two terms (academic year). Disbursements will be made through electronic funds transfer (EFT) or as a copayable check. All first time Stafford loan borrowers at Villanova University must complete an entrance interview and an MPN (Master Promissory Note) prior to the disbursement of any funds. You may complete the interview at:

And for the MPN:

Fees

Most of the lenders do not have an origination fee or an insurance fee. Some other lenders not using AES as the loan guarantee agency could charge up to 1% origination fees and a 1% default fee.

Interest

The accruing interest while in school is paid by the Federal government during your in-school, deferment and grace periods for subsidized borrowers. The interest during these periods is the responsibility of the borrower for unsubsidized loans. Interest will be billed quarterly and it is recommended that unsubsidized borrowers pay the interest at this time. Otherwise unpaid interest will be capitalized for unsubsidized borrowers at the end of the grace period.

Interest Rates

Over a four-year period beginning July 1, 2008, the interest rate on subsidized Stafford Loans made to undergraduate students will be reduced. The applicable interest rates for loans made during this period are as follows:

These changes apply to subsidized Stafford loans first disbursed on or after July 1 of each year through June 30 of the next year. This change does not affect any prior loans made to borrowers; the terms and interest rates of those loans remain the same. These reduced interest rates apply only to subsidized loans; any unsubsidized Stafford Loan for the same undergraduate borrower would continue to be made at the current fixed interest rate of 6.8 percent.

Grace Period

Six months after graduating, withdrawing or dropping below half-time enrollment.

Term of Loan

Repayment may extend up to 10 years, or may be extended up to 30 years through loan consolidation. A minimum payment of $50 per month is required while in repayment.

Repayment

Begins after the grace period. May be delayed by deferment options available to borrowers.

Deadlines

There are no specific deadlines, but it's a good idea to complete the Federal Stafford and Federal PLUS application processes before 6/30/2008 if applying for aid for the 2008-2009 academic year. Applying for the loan late may delay your funds and possibly cause you to incur University late fees, if your bills are not paid timely.

Notes

The Federal Stafford Loan is an educational loan available to students accepted/enrolled on at least a half time basis in an undergraduate or graduate degree program. Students must complete a Master Promissory Note from their lender or State Higher Education Assistance Agency. They must also file the VU application and an initial FAFSA or the Renewal FAFSA. Eligibility for a Federal Stafford Loan is based on cost of education, amount of other financial aid being received, as well as an expected family contribution towards educational costs.

Pre-Certification Process for Entering Students

1. Student completes the aid application process. This includes: submitting the FAFSA, the Villanova University Institutional Financial Aid Application, tax forms, and W-2's/1099 or 1099R by February 7th.
2. The Office of Financial Assistance will review the results of the aid application and determine the amount of Federal Stafford Loan Eligibility.
3. Each aid applicant will receive a notice of aid eligibility from the Office of Financial Assistance. Included in the notice will be the amount of Federal Stafford Student Loan that the student will be eligible to receive.
4. Students should go to www.aessuccess.org.  Under the heading “Student Loans,” click on Federal Stafford Loans and then “Apply Now.”  You will be able to select a Federal Stafford Loan lender and complete the Master Promissory Note (MPN) with either an electronic signature (E-sign) or print out an MPN and sign it on paper.
5. Stafford Loan proceeds will be transmitted via Electronic Fund Transfer (EFT) and credited to the student account at the beginning of the academic year.
6. First time borrowers at Villanova University (Freshmen/Transfers/Graduate Students) must complete Entrance Counseling.  If you have not already done so, log on to www.aessuccess.org and click on “Entrance and Exit Counseling.”