Federal Direct Stafford Loan

Eligibility (Eligibility Chart)

Eligible students filing the Free Application for Federal Student Aid (FAFSA) will be considered for a student William D. Ford Federal Direct Stafford Loan. The U.S. Department of Education is the lender. Upon verification of eligibility, completion of a Master Promissory Note and Entrance Counseling (if you are a first-time borrower), the loan funds will be credited to your student Bursar account.

You must be enrolled at least half-time each term of the loan period to be eligible to receive a student William D. Ford Federal Direct Stafford Loan. Half-time is defined as five or more credit hours for graduate students.

Two Types

Subsidized Loans

  • This loan is available to students who demonstrate financial need.
  • For a subsidized loan, the federal government pays the interest: while you are in school for at least 6 credit hours, for the first six months after you leave school (referred to as the grace period) and during a period of deferment (postponement of loan repayment).
  • The amount of your subsidized loan cannot exceed financial need or the annual loan limit set by the federal government, whichever is the lesser amount.

Unsubsidized Loans

  • This loan does not require students to demonstrate financial need.
  • The federal government does not pay the interest on an unsubsidized loan.
  • The amount is determined by the following equation:
     

Cost of Attendance
minus Federal Pell Grant, if eligible
minus Subsidized Loan, if eligible
minus any other financial aid received by the student
= Amount of unsubsidized loan (up to the annual limit)

Loan Limits

The amount you can borrow may be limited by factors such as other financial aid you may receive. The loans are for educational purposes and can never exceed the cost of your attendance less any other aid.

Year in School Dependent Student Independent Student
First Year (0-29 credits earned) $5,500—No more than $3,500 of this amount may be in subsidized loans. $9,500—No more than $3,500 of this amount may be in subsidized loans.
Second Year (30 or more credits earned) $6,500—No more than $4,500 of this amount may be in subsidized loans. $10,500—No more than $4,500 of this amount may be in subsidized loans.
Undergraduate Aggregate (Lifetime) Borrowering Limits $31,000—No more than $23,000 of this amount may be in subsidized loans. $57,500—No more than $23,000 of this amount may be in subsidized loans.

NOTE: The amounts shown in the chart are the maximum for one academic year. However, the amount offered may be less depending on the other financial aid that you receive during the same academic year.

Promissory Note

In order for loan funds to disburse to your student Bursar account, you must complete a Federal Direct Loan Master Promissory Note (MPN). To complete an MPN, you will need your FSA ID obtained from the U.S. Department of Education. (Your FSA ID is the same username and password you used to complete your Free Application for Federal Student Aid (FAFSA) online. If you did not complete your FAFSA online, do not have a FSA ID, or have misplaced your FSA ID, visit the U.S. Department of Education's FSA ID site.) You will also need your social security number, driver's license, and two references with different U.S. addresses.

Entrance Counseling

If you are a first-year borrower with the William D. Ford Federal Direct Stafford Loan program, you will need to complete entrance counseling. To complete online entrance counseling, you will need your FSA ID obtained from the U.S. Department of Education. (Your FSA ID is the same username and password you used to complete your Free Application for Federal Student Aid (FAFSA) online. If you did not complete a FAFSA online, do not have a FSA ID, or have misplaced your FSA ID, visit the U.S. Department of Education's FSA ID site.)

Entrance counseling must be completed before your loan will disburse to your account.

Disbursements

Once we have received notification from the Direct Loan Servicing Center that you completed the promissory note and entrance counseling session, we will update your account with these documents. It may take as long as 72 hours for us to receive notification after you have completed the documents online. The loan money will be directly applied to your student account as long as you meet the general eligibility requirements for federal financial aid and you are enrolled for at least six credit hours. Loan money will pay for tuition and fees. If you authorize the loan to pay toward books, the loan money will also allow for book charges. If there is any remaining loan money after these charges are paid, a refund check will be generated by the Bursars office and mailed to the address on file with Registration & Student Records.

Federal law requires that all Direct Loans be disbursed in at least two installments. Students receiving a loan for the entire academic year will be set up to receive a check with excess loan funds, if any, in each term. Students receiving a loan for just one term will still receive their loans in two disbursements. The second disbursement will not be made before half of the term is over. In addition, Sinclair does not disburse Direct Loan funds to new borrowers until after 30 days have elapsed from the beginning of the term.

**If you are new to Sinclair and new to student loan program, your first disbursement will not be applied to your student account until the 31st day of the term. Sinclair will provide temporary funds to help provisionally pay tuition, fees and, if authorized, books. When we receive the federal loan money, the temporary funds will be removed, and any remaining loan money will be refunded to you. If you withdraw from all of your classes before the 31st day or are enrolled in less than 6 credit hours for which you established attendance at the time the loan is scheduled to disburse, the loan disbursement will be canceled, and you will owe Sinclair for any temporary funds that were used.

Changing your loan amounts

Although your signature on the eMPN allows us to make multiple loans to you under a single promissory note, you are not required to accept the loan amount that we award you. You should notify us immediately in writing if you want to borrow a lesser amount than what was awarded. In addition, you may cancel all or a portion of your loan(s) after the funds have been credited to your student account by notifying the Financial Aid & Scholarships office in writing (finaid@sinclair.edu) within 30 days after the date of the disbursement notice.

Exit Counseling

Prior to graduating or leaving college, Federal Direct Stafford Loan student borrowers are required to complete an Exit Counseling session. This Exit Counseling session has been created to make sure that you understand your rights and responsibilities as a federal student loan borrower.

Borrower's Responsibilities—Repayment

You are required to begin making payments on your Federal Direct Stafford Loans after you graduate, leave school, or drop below half-time enrollment. Plan ahead for repayment and budget wisely. You have a six month grace before you must begin repayment. The Federal Direct Stafford Loan Program offers loan repayment plans designed to meet the needs of almost every borrower and allows you to choose which repayment plan is best for you. Federal Direct Stafford Loan borrowers may choose between the standard, extended, graduated, income contingent, and income-based repayment plans.

Your loan will be originated with the Direct Loan Servicing Center (1-800-848-0979), which, in addition to information on repayment plans, provides repayment calculators to help you determine how much you pay and how long it will take to repay your loan based on the plan chosen. Calculations are estimates and the values may not reflect the actual amount computed by the Direct Loan Servicing Center.

Approximately 7-10 business days after the first disbursement of your loan, your loan is assigned to a loan servicer who will then send you information regarding your loan. Repayment of your loan is managed by your loan servicer. To review your loans and to obtain your loan servicer contact information, you may access www.nslds.ed.gov. You will need to login using your FSA ID.

If You Already Have a Student Loan

If you already have a student loan that was made through the Direct Stafford Loan Program along with a FSA ID, you can get your most recent account information from www.nslds.ed.gov.

Deferment/Forbearance

If you have a problem making your monthly loan payments, you may be able to postpone your payments through a deferment or forbearance request. Deferments are also an option if you are returning to school after an absence. You may also be eligible to have your Federal Direct Stafford Loan or Federal Perkins Loan forgiven (see listing of forgiveness programs).

If you have exhausted your deferment and forbearance options, and/or want to avoid a default, you may also want to consider a loan consolidation. A Direct Consolidation Loan allows you to combine one or more of your federal education loans into a new loan that offers several advantages. For more information, see Direct Consolidation Loans.

Student Loan Code of Conduct

The guiding principles for ensuring the integrity of the student aid process and the ethical conduct of employees in regard to student loan practices are provided in Sinclair's Student Loan Code of Conduct.