Types of Federal Student Aid Available

Federal Grant Programs

Pell Grant – Undergraduate Students Only
A Federal Pell Grant, unlike a loan, does not have to be repaid. Pell grants are awarded to students who demonstrate financial need and who have not yet earned a bachelors or professional degree. The maximum award for the 2011-2012 award year (July 1, 2011 to June 30, 2012) is $5,550. The maximum award for the 2012-2013 award year (July 1, 2012 to June 30, 2013) will be $5,550. The maximum can change each award year and depends on program funding.

The Pell Grant amount awarded will depend on:

Estimated Family Contribution (EFC)
Cost of Attendance
Enrollment Status

Federal Supplemental Educational Opportunity Grant (FSEOG)
The Federal Supplemental Educational Opportunity Grant (FSEOG) program is for undergraduates who demonstrate exceptional financial need. Pell Grant recipients with the lowest expected family contributions (EFCs) will be considered first for a FSEOG. Just like Pell Grants, the FSEOG does not have to be repaid.

Federal Direct Loan Program

Direct Stafford Loans, from the William D. Ford Federal Direct Loan (Direct Loan) Program, are low-interest loans for eligible students to help cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school. Eligible students borrow directly from the U.S. Department of Education (the Department) at participating schools.

In addition, there are several benefits in using the Direct Loan Program:

A guaranteed source of funding for student loans.
The option of an income- contingent repayment plan or an income-based repayment plan when you enter repayment. This means you will have the option of ensuring that your loan repayment amount will always be affordable based on what your income will allow.
Students in the Direct Loan program who enter into public service jobs can have any remaining balance on their loans forgiven after ten years of public service work. (While this option does not exist in the FFEL program, students who borrowed in that program can consolidate their loans into the DL program in order to take advantage of this forgiveness program.)
Most lenders offer benefits during repayment after a student makes payments from 2 to 4 years. Very few students end up receiving those benefits. In DL, students earn benefits after only 1 year.
Should a student make payments late under DL, the late fees charged are less than the late fees charged in the FFEL Program.

Federal Direct Loans

A Federal Direct Subsidized Stafford Loan is awarded on the basis of the student's financial need and other specific eligibility requirements. The federal government does not charge interest on these loans while borrowers are enrolled at least half-time, during a six-month grace period, or during authorized periods of deferment.
A Federal Direct Unsubsidized Stafford Loan is not based on the student's financial need, but students must also meet specific eligibility requirements. Interest is charged throughout the life of the loan. The borrower may choose to pay the interest charged on the loan or allow the interest to be capitalized (added to the loan principal).

What are the current interest rates?

Direct Subsidized Loans:

Undergraduate Students - If the first disbursement is between July 1, 2010 and before June 30, 2011, the interest rate on your loan is fixed at 4.5%. If the first disbursement is between July 1, 2011 and before July 1, 2012, the interest rate on your loan is fixed at 3.4%. If the first disbursement is on or after July 1, 2012 the interest rate on your loan is fixed at 6.8%.
Graduate Students - The interest rate is fixed at 6.8% for all borrowers.

Direct Unsubsidized Loans:

Undergraduate Students – The interest rate is fixed at 6.8% for all borrowers.
Graduate Students - The interest rate is fixed at 6.8% for all borrowers.

Direct Loan Resource Center

In order to receive federal student loans, you must complete certain requirements. The Department of Education has created a website (www.studentloans.gov) to manage borrower requirements and provide valuable information regarding federal student loans. The three items listed below are required from all borrowers.

Entrance Interview
To ensure that you understand your rights and responsibilities as a student loan borrower, the Federal Government requires you to participate in loan counseling before receiving a Direct Loan, if you have not previously received a Direct Loan, Federal Family Education Loan or Supplemental Loans to Students (SLS) Loan.
Sign Master Promissory Note (MPN)
The Master Promissory Note, commonly referred to as MPN, is a document that must be signed in order to receive a federal student loan. The signed MPN binds you to the federal government as a promise to repay the student loan you intend to take out to help cover your educational expenses. The MPN provides valuable information about the rights and responsibilities you have as a borrower.
Exit Interview
Prior to graduating or leaving school, Direct Loan borrowers must complete exit counseling. The Direct Loan Exit Counseling will explain your rights and responsibilities as a Direct Loan Borrower. Your Federal PIN is required in order to complete the Exit Interview because your personal loan information will be provided.

Federal Stafford Loans

Stafford loans are Federal Student Loans made directly available to college and university students and are used to supplement personal and family resources, scholarships and grants. They may be subsidized by the U.S. Government or may be unsubsidized depending on the student's financial need.

Subsidized Stafford Loans

Based on need
Interest paid by the federal government while you are in school
Must be enrolled at least half-time

Unsubsidized Stafford Loans

Non-need based
Available to independent students only (with the exception of dependent students whose parents have been denied a PLUS Loan)
Interest is paid by the student; may be paid during school, or deferred until after
Must be enrolled at least half-time

Annual Stafford Loan Limits – Effective July 1, 2011

Year/Classification	Base Amount	Additional Unsubsidized Loan Amount	Total
Dependent Students
Freshman	$3,500	$2,000	$5,500
Sophomore	$4,500	$2,000	$6,500
Junior or Senior	$5,500	$2,000	$7,500
Independent Students
Freshman	$3,500	$6,000	$9,500
Sophomore	$4,500	$6,000	$10,500
Junior or Senior	$5,500	$7,000	$12,500
Graduate Students	$8,500	$12,000	$20,500

Note: It is important to note that even if a student is financing their education on their own, dependency status is still determined by the school.

Parent Loan for Undergraduate Students – Undergraduate Students Only

Federal PLUS loans enable parents with good credit histories to borrow money to pay the educational expenses of their children. Each child must be a dependent undergraduate student enrolled at least half time in an approved college or university. The primary benefit of PLUS Loans is that it allows parents to borrow federally guaranteed low interest loans to help pay for their child's education. The loans are not based on need, but when combined with other resources cannot exceed the student's cost of education. The interest rate on the Direct PLUS Loan is fixed at 7.9 percent as of July 1, 2006 and deferments apply only to the loan principal, not interest.

Graduate PLUS Loans Graduate Students Only

Graduate and professional degree students are now eligible to borrow under the PLUS loan program. A graduate PLUS loan is a non-need credit based loan similar to a private student loan, but with the benefit of having a fixed interest rate and federal guarantee. The graduate PLUS loan allows graduate students to borrow up to their total cost of attendance minus any other aid. This is a credit based loan and currently has a fixed interest rate of 7.9 percent in the Direct Loan program.