Terms and Conditions of the Federal Stafford Loan
There are two kinds of Federal Stafford Loans, subsidized and unsubsidized. A subsidized loan is awarded to students who have financial need and the federal government pays the interest on the loan while the student is enrolled at least half time. An unsubsidized loan may be offered regardless of need. The student is responsible for paying the interest (or choosing to capitalize the interest while enrolled at least half-time) on an unsubsidized loan. You may receive a combination of subsidized and unsubsidized Federal Stafford Loans. Unfortunately, beginning fall 2012, per new federal regulations, graduate students will no longer be able to borrow subsidized Stafford Loans.
For Tulane School of Public Health & Tropical Medicine students, the annual amount of a Federal Stafford Loan unsubsidized cannot exceed $33,000. For Tulane School of Medicine students, the annual amount of Federal Stafford Loan cannot exceed $40,500.
For graduate and professional health professions students the combination of subsidized and unsubsidized cannot exceed $224,000 for undergraduate and graduate study with no more than $65,500 in subsidized loans.
Origination Fee and Default Fee
An origination fee of one percent can be deducted from the face value of the loan by the Department of Education.
Beginning on July 1, 2013, the interest rate for each academic year can be described as variable-fixed. The fixed interest rate for loans borrowed between 07/01/13 and 6/30/14 is 5.41%. In June of each year, the interest rate for the following academic year is determined by the government. Loans taken out that year will have an interest rate that is fixed for the life of that loan (meaning until the loan is paid off). The next year, the process is repeated and the interest rate for that year is determined.
For loans borrowed from July 1, 2006 to June 30, 2013, the interest rate on these loan Federal Stafford Loans was fixed at 6.80%.
The interest rate information in this paragraph applies to Stafford Loans made between July 1, 1998 to June 30, 2006. The Stafford Loan interest rate is an annual variable rate: 91 day Treasury bill + 1.70% during in-school, grace and deferment periods and + 2.30% during repayment (adjusted annually on July 1); interest rate is capped at 8.25%. The interest rate from July 1, 2006 to June 30, 2007 was 6.54% while in school and 7.14% during repayment. The interest rate from July 1, 2007 to June 30, 2008 was 6.62% while in school and 7.22% during repayment. The interest rate from July 1, 2008 to June 30, 2009 was 3.61% while in school and 4.21% during repayment. The interest rate from July 1, 2009 to June 30, 2010 is 1.88% while in school and 2.48% during repayment.
Payments of Interest While Enrolled
Subsidized: the federal government pays Interest as long as you remain enrolled at least half time in a degree seeking program.
Unsubsidized: You are responsible for payment of interest while enrolled. However, you may elect to capitalize interest and add it to the principal upon repayment.
You are entitled to a 6-month grace period before repayment, beginning at the time you cease to be enrolled at least half time.
Repayment begins 6 months after you cease to be enrolled at least halftime. Length of the repayment period is set by the lender not to exceed 10 years. The minimum monthly payment is $50. You may prepay all or part of a loan at any time without penalty.
A deferment period is a time during which repayment of principal is postponed. For subsidized loans, the federal government continues to pay the interest during periods of deferment. Refer to the loan promissory not for details on deferment provisions.
Disbursements of Loan Funds
Federal regulations require at least two loan disbursements per enrollment period. The first disbursement usually occurs at the start of the enrollment period and the second disbursement at the mid-point of the enrollment period. For Public Health students enrolled for a full traditional academic year, this equates to equal disbursements at the start of each semester. Medical students also receive two equal disbursements during their academic year. You must be enrolled, attending classes, and making satisfactory academic progress at the time funds are disbursed. Universities are prohibited from making subsequent disbursements of a Federal Stafford Loan if you drop below half time or withdraw before the end of the semester/term.
We are required to return to the government any portion of a disbursement that exceeds the amount of assistance for which you are eligible, taking into account any changes that have occurred since the loan was recommended.
Health Sciences Financial Aid, Tulane University, New Orleans, LA 70112 504-988-6135 firstname.lastname@example.org