In the Federal Direct Loan program, the US Department of Education will supply the loan funds and service the loans after disbursement. 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.

 

Subsidized Stafford Loans — the federal government pays the interest while the student is in school for at least half time. These loans are based on need.

 

Unsubsidized Stafford Loans — the interest is not paid for by the government while the student is in school. The interest begins when the loan is issued and will accrue while the student is in school. To minimize the interest debt, it is advisable to pay the interest while going to school.

 

Current interest rates and other helpful information about Direct Stafford loans

 

The 3-year cohort default rate for 2014 was published September 2017.

The national average: 11.5%

UT Martin: 9.2%

 

Loan Limits

 

The combination of loan(s) and any other aid may not exceed the cost of attendance for the term of the loan. Students are limited to the loan amounts they can borrow in an aid year (fall/spring/summer) and through all their undergraduate and graduate years.

 

Borrowing limits for full time enrollment is as follows:

 

Dependent Undergraduates:

• Freshmen: $3,500 subsidized/$2,000 unsubsidized ($5500 total)
• Sophomores: $4,500 subsidized/$2,000 Unsubsidized ($6500 total)
• Juniors & Seniors: $5,500 subsidized/$2,000 Unsubsidized ($7500 total)
• Lifetime or Aggregate limit: $31,000 (maximum subsidized is $23,000)

Independent Undergraduates:

• Freshmen: $3,500 subsidized/$6,000 unsubsidized ($9500 total)
• Sophomores: $4,500 subsidized/$6,000 Unsubsidized ($10,500 total)
• Juniors & Seniors: $5,500 subsidized/$7,000 Unsubsidized ($12,500 total)
• Lifetime or Aggregate limit: $57,500 (maximum subsidized is $23,000)

Graduate Students:

• $20,500 unsubsidized
• Lifetime or Aggregate limit: $138,000 (maximum subsidized is $65,000) and includes the debt incurred as undergraduate.

**The Federal Perkins Program has been discontinued, beginning Oct. 1, 2017. Perkins loans for 2017-18 must have their first disbursement occur prior to Oct. 1, 2017 to be eligible for the 2nd disbursement in Spring.

 

PLUS (Parent Loans for Undergraduate Students) loans enable parents to borrow the student's cost of attendance minus other aid for each dependent student who is enrolled at least half-time. This loan is in the parent's name and must be applied for by the parent at www.studentloans.gov. UT Martin requires the student to complete the FAFSA before certifying a PLUS loan. The PLUS loan cannot exceed the difference in the student's estimated cost of attendance and what they are already receiving. We will adjust the amount accordingly.

 

If PLUS is Denied: If a parent is denied by the Department of Education for a PLUS loan, the school will be notified and the student will become eligible for an additional unsubsidized loan at the independent student level. We will send notification of that eligibility to the student and they will need to complete an additional form to request those additional loan amounts.

Grad PLUS loans are loans that are additional loans that are available for graduate students only. They are usually only used after a student has used their maximum eligibility for Stafford loans. They are applied for at www.studentloans.gov. Credit decisions will be sent to UT Martin and we will evaluate your eligibility to receive the loan before putting it on your account. Be sure you have completed a FAFSA and have accepted all the Stafford loan that you are eligible for first.

• Federal regulations require that UT Martin make two disbursements of Stafford and PLUS Loans. First-time Freshmen must wait 30 days after classes begin to receive their first disbursement. All other students will receive their first disbursements on or about the first day of the loan period. The second disbursement will 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.
• Summer loans are disbursed in two disbursements. The disbursement dates are the start of Maymester and around the third week of June. You must be attending or have been attending 6 credit hours at the time of disbursement for the loan to disburse as scheduled. If your 6th credit hour is in a session that begins after the disbursement dates, your loan will fully disburse at the beginning of the session in which your 6th credit hour occurs. For clarification on when your summer loan will actually disburse, please contact the financial aid office.

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 Perkins 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.