• Borrower's Responsibilities and Rights
• Available Loans
• Loan Disbursement
• Loan Repayment

NEW! Important information about Stafford and Plus loans beginning Fall 2010:

With the passage of H.R. 4872, the Health Care and Education Affordability Reconciliation Act of 2010, the current Federal Family Educational Loan Program (FFELP) is eliminated as of July 1. 2010. In its place, college and universities will be using the Federal Direct Loan program.

What is the difference between FFELP and the Direct Loan Program?

In the FFEL program, private lenders (Sallie Mae, edAmerica, Suntrust, etc.) made the Stafford and Plus loans to students and parents. In the Federal Direct Loan program, the US Department of Education will supply the loan funds and service the loans after disbursement.

How does this affect my loans for the upcoming year?

Every student who accepts a Stafford loan for 2010-2011 MUST complete and sign a new Master Promissory Note (MPN). New borrowers need to complete Entrance Loan Counseling. This can be done electronically on Banner Self Service when you accept your loan. The MPN will be good for 10 years. We will still certify and process your loans as before and you will not notice any difference in how your loan is accepted and how your refund is processed from the Business Office.

What about the loans I’ve already taken?

This new legislation does not affect the FFELP loans that you took out in the past. You can consolidate all loans (Direct or FFELP) under the Federal Direct Loan consolidation program.

What about PLUS loans?

PLUS loans are available to qualifying parents of dependent undergraduate students who are degree seeking and enrolled at least half time. The application for a PLUS loan can be found at the same site as the MPN, which is https://studentloans.gov.

ACCEPTING LOANS

Beginning Fall 2010

• Accept your student loans in Banner Self-Service.
• Complete your Master Promissory Note and Entrance Loan Counseling

Federal Stafford Loans - A Free Application for Federal Student Aid (FAFSA) must be completed before applying for a student loan. Federal Stafford Loans are available to eligible undergraduate, graduate, or professional students and may be subsidized or unsubsidized. Repayment of principal is postponed while the student is in school and during a six-month grace period after the student leaves school or drops below half-time hours.

• Borrowers must be enrolled in at least six credit hours at the time of disbursement in order to remain eligible for the loan.
• Subsidized Federal Stafford Loans: (The federal government pays interest on the borrower's behalf.)
  • while s/he is in school
  • in her/his grace period
  • during authorized periods of deferment of repayment
• Unsubsidized Federal Stafford Loans:
  • are available to students who do not qualify, in whole or in part, for subsidized Stafford loans
  • the terms for unsubsidized loans are the same as the terms for subsidized loans, except that the federal government DOES NOT pay interest on the borrower's behalf
  • the interest may either accrue while the student is in school, and then be added to the loan balance, or the borrower may begin making interest payments after the first loan check is disbursed
  • the borrower is responsible for paying interest during her/his grace period and during authorized periods of deferment of repayment
• Interest Rates:
  • The interest rates for Subsidized loans disbursed after July 1, 2010:
  • Undergraduates = 4.5%
  • Graduates = 6.8%
  • The interest rates for Unsubsidized loan disbursed after July 1, 2010:
  • 6.8%
  • PLUS Loan interest rates disbsursed after July 1, 2010:
  • 7.9%
• A borrower may possibly receive both subsidized and unsubsidized Direct Loans, as long as the total of the two loans does not exceed the limit for the applicable grade level. If a person does not qualify for the full amount permitted under the subsidized Direct Loan program, an unsubsidized Direct Loan may be processed for the difference between the grade level maximums and the subsidized loan amount. The combination of loan(s) and any other aid may not exceed the cost of attendance for the term of the loan.
• Borrowing limits for full time enrollment will be as follows:
  • Dependent Undergraduates:
    • $3,500 freshmen + $2,000 Unsubsidized
    • $4,500 sophomores + $2,000 Unsubsidized
    • $5,500 juniors, seniors and fifth-year students + $2,000 Unsubsidized
  • Independent/Graduate and Professional Students:
    • $3,500 - any subsidized elig. + $6,000 = $9,500 freshmen
    • $4,500 - any subsidized elig. + $6,000 = $10,500 sophomores
    • $5,500 - any subsidized elig. + $7,000 = $12,500 juniors & seniors
    • $8,500 - any subsidized elig. + $12,000 = $20,500 professional & graduate students.
• These are yearly amounts which include Fall, Spring, and Summer terms.

Federal Plus Loans - PLUS (PARENT Loans for Undergraduate Students) loans enable parents (or legal guardians as determined by court order) to borrow the student's cost of attendance minus other aid for each dependent student who is enrolled at least half-time. UT Martin requires the student to complete the FAFSA before certifying a PLUS loan.

• Subsidized Direct Loan eligibility for the student must be used when calculating PLUS eligibility, regardless of whether the student applies for the Direct Loan.
• PLUS loans do NOT require that the student have demonstrated financial need. However, the combination of PLUS loans and any other aid may not exceed the cost of education for the term of the loan.

Federal Perkins Loans - The Federal Perkins Loan is a low interest (5%), long-term loan to help pay for your educational expenses such as tuition, fees, room and board and books. These loans are made to undergraduates through the Office of Student Financial Assistance and are awarded based on need. Persons apply by completing a Free Application for Federal Student Aid (FAFSA), and by answering "yes" to the question "are you interested in student loans?"

• The student may borrow a total of up to $4,000 per year as an undergraduate up to a total of $20,000
• Once you are offered this loan, you can accept it in Banner Self Service and complete the necessary forms as indicated.  The Perkins Loan Officer will contact you regarding the promissory note you will be required to sign.
  
  

• Federal regulations can require UT Martin to make two disbursements of Direct and PLUS Loans. The first disbursement should be made on or about the first day of the loan period. The second disbursement should be made on or after the beginning of the second semester for fall/spring loans or when one-half of the loan period has expired for all other loans.
• If you receive a loan for fall only or spring only; those loan funds will also be disbursed in 2 separate disbursements during that one semester.
• First-time borrowers must sign a Master Promissory Note and complete Entrance Loan Counseling.
  
  

• For Direct Subsidized loans:
  • Repayment begins after the grace period expires. The grace period for most borrowers is six months and begins when the student leaves school or falls below half-time hours.
• For Direct Unsubsidized loans:
  • Repayment of interest begins immediately, unless the student has chosen to have interest capitalized, which means interest will accrue on the loan until the student leaves school or falls below half-time hours. Repayment of principal and interest begins six months after the student leaves school or falls below half-time hours.
• PLUS Loans:
  • Repayment typically begins 60 days after the loan is fully disbursed. Parents must check with their lender to obtain information on repayment procedures. 
• Federal Perkins Loans:
  • Repayment begins nine months after you graduate, leave school, or drop below half-time status.
  • You may be allowed up to 10 years to repay your loan. The amount of your payment depends on the size of your debt, but usually you must pay at least $50 per month.
  • If you default on a Federal Perkins Loan and the school is unable to collect, it will harm your credit rating and the federal government may take action to recover the loan. You cannot receive further financial aid if you are in default status.
  • Certain conditions may make you eligible to apply for a deferment of your Federal Perkins Loan. These conditions include:
    • at least part-time enrollment at a postsecondary school
    • volunteer work in Peace Corps or ACTION Programs or comparable full-time volunteer work for a tax-exempt organization
    • active duty in the U.S. armed forces, Commissioned Corps of U.S. Public Health Service or National Oceanic and Atmospheric Administration Corps
    • temporarily totally disabled or you cannot work because you are caring for a temporarily totally disabled spouse or other dependent
    • working at an eligible internship
    • currently unemployed
    • mother of preschool-age children who is going to work (or back to work) at a salary of no more than $1 over the minimum wage
  • Certain conditions may cancel repayment of you loan. These conditions include:
    • death or a total and permanently disability
    • Cancellation criteria
    • Part of your loan will be canceled for each complete academic year you are a full-time teacher of handicapped children, or for each complete academic year you teach full-time in a designated elementary or secondary school that serves low-income students. In both of these cases, your entire loan will have been cancelled after the fifth consecutive year of teaching. To find out whether the school you are teaching in is a designated school, contact the treasurer's office.
    • Part of your loan will be cancelled for each year of full-time work in specified Head Start programs. After the seventh year, your entire loan will have been cancelled.
    • Up to 70 percent of your loan can be cancelled for service as a Peace Corps or VISTA volunteer--30 percent during the first two years, 40 percent during the next two years. (This deferment applies only to Perkins Loan borrowers, not to National Direct Student Loan [NDSL] borrowers).
    • If you serve as an enlisted person in certain selected specialties of the U.S. Army, the Army Reserves, the Army National Guard, the Department of Defense will, as an enlistment incentive, repay a portion of your loan. If you think you may qualify, contact your recruiting officer.

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