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Stafford Loan

Please read this important notice about changes in federal loans at MSU.

How to apply for Stafford loan

  • File the Free Application for Federal Student Aid (FAFSA). Most students who apply will qualify for a subsidized or unsubsidized Stafford.
  • Summer semester Stafford requires the FAFSA AND an MSU summer aid application.

Actions YOU must take to receive your Stafford Loan funds

  • Your enrollment level must be at least half-time.
  • You must accept your loan in StuInfo/eFinaid.
  • You must complete a Stafford Master Promissory Note (MPN).
    • For fall, spring, summer 2007-2008:
      • If you already have an acceptable MPN on file you do not need to complete another one.
      • If you do NOT have an acceptable MPN on file you must complete one before you can receive your loan money.
      • If you choose one of MSU's suggested lenders, you may complete the Stafford Master Promissory Note (MPN) online in StuInfo/eFinaid.
      • If you choose a different lender you should follow their instructions for completing a MPN. You need to complete only one multi-year MPN unless you change lenders or go from undergrad to graduate student.
    • For fall/spring/summer 2008-2009:

Difference between subsidized and unsubsidized Stafford

  • SUBSIDIZED
    The federal government pays the interest on a subsidized loan while you are in school at least half-time, so the student has no interest payable or accruing while in school. After the student drops below half-time or leaves school, there is a one-time grace period of six months.
  • UNSUBSIDIZED
    Interest does accrue on an unsubsidized Stafford while you are in school. You may choose to pay interest while in school in order to avoid "paying interest on interest" (capitalizing interest).

Interest rates

  • Loans borrowed prior to July 1, 2006 have variable interest rates with a cap of 8.25%.
  • Under Direct Loans, the Stafford interest rate will be a fixed 6.0% for undergrad subsidized, and 6.8% for undergrad unsubsidized and graduate sub and unsub. Loans originated under the Federal Family Education Loan Program (FFELP) may have different rates. (Contact your lender.)

Loan origination fees

Stafford Loans have a standard origination fee of 1.5% of the loan amount. Beginning July 1, 2008 the new standard origination fee will be 1%.

Repayment and consolidation

When you near graduation (or drop below half-time) you will be given information on loan repayment and consolidation. This is referred to Exit Counseling or Exit Interview. More information on loan repayment…

 

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