Federal Stafford Loans are available as subsidized or unsubsidized
loans. To qualify for a subsidized loan, the student must
demonstrate financial need. The federal government pays the
interest on the subsidized loan while the student is enrolled;
the student begins repaying the loan principal and paying
interest six months after ceasing to be enrolled. A student
may qualify for an unsubsidized loan regardless of need. The
student is responsible for paying interest on the unsubsidized
loan while enrolled. Interest payments begin accruing 60 days
after the loan is disbursed. As with the subsidized loan,
repayment on the loan principal begins six months after the
student ceases to be enrolled. Payments on interest and principal
of an unsubsidized loan may be deferred, but interest will
accrue and compound. The federal processor requires that a
student first apply for a subsidized loan before applying
for an unsubsidized loan.
A student may borrow up to $8,500 annually through the
basic Federal Stafford Loan program. A graduate student
may be eligible for a supplemental, unsubsidized loan (in
addition to a basic subsidized or unsubsidized loan) for
an amount up to $10,000 annually over and above the $8,500
eligibility level of the basic Stafford program, provided
that the total amount of assistance does not exceed the
cost of the graduate program. An origination fee of 3 percent
(and possibly a 1 percent loan warranty fee) are deducted
from the proceeds of all loans.
The procedures for filing for a loan will be explained
when the student is notified about eligibility. As with
all financial aid requests, the student must submit the
FAFSA to the federal processor. (Even though an unsubsidized
loan does not require analysis of need, the student must
still submit the FAFSA.)
Loans are disbursed in two equal payments, one each semester.
Electronic disbursements are credited to a student’s
account when they are received. Check disbursements are
sent to the Student Accounts Office in Annandale-on-Hudson;
the Student Accounts Office forwards the check to the Associate
Dean for Academic Programs. The student must sign a loan
check before the loan can be credited to a personal account.
If the check is not signed within a designated period, the
Student Accounts Office is obliged to return it to the lender
for cancellation. In such a case, the student becomes responsible
for the entire account balance and is charged a $100 penalty
fee for late payment and duplication of the loan disbursement
procedure.
The amount of a loan typically includes an allowance for
expenses in addition to program fees. If the loans create
a credit balance in the student’s account after the
amount due the program has been paid, the amount is refunded
directly to the student within 14 days of the date on which
the balance was created or within 14 days of the first day
of classes of the payment period, whichever is later. The
student should not expect to receive this refund before
the end of the 14-day processing period; hand checks are
not issued. A student who chooses to leave the excess funds
in the account as a credit toward a future term’s
fees must send written notice of this choice to the Student
Accounts Office.
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