Financial Aid Step 1

Intro

Stafford Entrance Topic 1 of 6: Applying for a Federal Stafford Loan

It’s important to understand the types of loans available, the terms of each loan, and your responsibility for repaying the loans. Take note of your rights and responsibilities listed on the confirmation page, provided at the end of this loan counseling session. Your Master Promissory Note (MPN) also contains your Rights and Responsibilities.
The MPN:

You may be required to sign a new MPN if your school does not use the multi-year feature or you switch lenders. If you transfer to a school that uses the multi-year feature, you generally are not required to sign a new MPN. If you would feel more comfortable completing and signing a new MPN each time you borrow, you may do so. Using the single-year feature, you will sign one MPN for every loan that you obtain.
The multi-year feature of the MPN will be revoked after the earliest of the following dates:

The date your lender receives your written notice that no further loans may be distributed under the note;

12 months after the date you sign the MPN if there have been no disbursements during this 12 month period; or

10 years from the date you sign the MPN.

Your lender may also revoke the terms of the MPN in situations such as bankruptcy. Your school or lender may require that you confirm the loan package or each loan disbursement.

Choosing a Lender

When borrowing a Federal Stafford Loan, you have the right to choose your lender. If your school has a list of lenders they recommend, be sure to ask what benefits these lenders offer. You ARE allowed to choose a lender that is not included on the school’s list.

Fast Loan Facts

Generally speaking, your school will certify you for the maximum amount of loan money for which you are eligible, unless you request less. You may decline a portion or all of a loan or reject a loan type if you do not want it.

Your award letter probably will list your loan amount. More than likely, you’ll receive your student loan funds in more than one disbursement throughout the loan period, even if you’re only attending one semester.

If you are a first-year undergraduate and a first-time borrower, there may be a 30-day waiting period after classes begin before your loan funds can be released.

You must continue to complete the Free Application for Federal Student Aid (FAFSA) each year as well as meet the Stafford Loan eligibility requirements as long as you continue to attend school.

IIEI Financial Aid Home
Step 1 - Stafford Entrance Topic 1 of 6: Applying for a Federal Stafford Loan
Step 2 - Stafford Entrance Topic 2 of 6: Loan Types
Step 3 - Stafford Entrance Topic 3 of 6: Understanding Student Loan Borrowing
Step 4 - Stafford Entrance Topic 4 of 6: Repayment of Your Student Loan
Step 5 - Stafford Entrance Topic 5 of 6: Solutions for Loan Repayment Problems
Step 6 - Stafford Entrance Topic 6 of 6: Delinquency and Default
Step 7 - Review what you’ve read and take the Financial Aid Entrance Quiz