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Always keep a record of all previous loans, including promissory notes and disclosure statements.
How Do I Apply
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. These loans are made by a lender, such as a bank, credit union, or savings and loan association; are insured by a state or non-profit guarantee agency; and are reinsured by the federal government.
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Borrowers must be enrolled in at least six credit hours at the time of disbursement in order to remain eligible for the loan.
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Subsidized Federal Stafford Loans: (The federal government pays interest on the borrower's behalf.)
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while s/he is in school
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in her/his grace period
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during authorized periods of deferment of repayment
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Unsubsidized Federal Stafford Loans:
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are available to students who do not qualify, in whole or in part, for subsidized Stafford loans
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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
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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
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the borrower is responsible for paying interest during her/his grace period and during authorized periods of deferment of repayment
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Interest Rates:
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The interest rates for loans disbursed after July 1, 2006 are 6.8% in school, 3.37% in repayment and 8.5% for PLUS loans.
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A borrower may possibly receive both subsidized and unsubsidized Federal Stafford 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 Stafford program, an unsubsidized Stafford 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.
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Borrowing limits for full time enrollment will be as follows:
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Dependent Undergraduates:
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$3,500 freshmen
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$4,500 sophomores
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$5,500 juniors, seniors and fifth-year students
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Independent/Graduate and Professional Students:
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$3,500 - any subsidized elig. + $4,000 = $7,500 freshmen
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$4,500 - any subsidized elig. + $4,000 = $8,500 sophomores
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$5,500 - any subsidized elig. + $5,000 = $10,500 juniors & seniors
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$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 does not require a student to complete the FAFSA before applying for a PLUS Loan. However, if a student completes a FAFSA, subsidized loan eligibility the following conditions should be considered.
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Students should be sure that the parent information on file with the registrar is current, since that information may be used to determine whether the PLUS borrower listed on the application can legally borrow on behalf of the student.
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Subsidized Stafford Loan eligibility for the student must be used when calculating PLUS eligibility, regardless of whether the student applies for the Stafford Loan.
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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?" Only students who apply by March 1st are considered for this loan.
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The student may borrow a total of up to $4,000 per year as an undergraduate up to a total of $20,000
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Once you are offered this loan, you can accept it in Banner Web and complete the necessary forms as indicated on Banner Web. The Perkins Loan Officer will contact you regarding the promissory note you will be required to sign.
Loan Disbursement
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Federal regulations require lenders to make two disbursements of all Stafford 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.
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To ensure prompt delivery of loan funds, borrowers should accept their loans well in advance to allow for processing the applications and to give the lender time to disburse the funds. First-time borrowers must sign a Master Promissory Note and submit it to their lender in order to receive the loan funds.
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FRESHMAN BORROWERS will not receive the first disbursement of a Stafford Loan until 30 days after the first day of enrollment as per Federal Regulations.
Loan Repayment
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For Stafford Subsidized loans:
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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.
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For Stafford Unsubsidized loans:
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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.
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PLUS Loans:
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Repayment typically begins 60 days after the loan is fully disbursed. Parents must check with their lenders to obtain information on repayment procedures. Certain lenders have interest only payment options while the student maintains half-time enrollment status.
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Federal Perkins Loans:
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If you have an outstanding principal or interest owing on any direct loan (Perkins/NDSL) prior to July 1, 1987, you begin paying six months after you graduate, leave school, or drop below half-time status.
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If you are a new borrower who has no previous outstanding principal or interest owing on any loan as of July 1, 1987, you begin repayment nine months after you graduate, leave school or drop below half time status.
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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.
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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.
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Certain conditions may make you eligible to apply for a deferment of your Federal Perkins Loan. These conditions include:
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at least part-time enrollment at a postsecondary school
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volunteer work in Peace Corps or ACTION Programs or comparable full-time volunteer work for a tax-exempt organization
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active duty in the U.S. armed forces, Commissioned Corps of U.S. Public Health Service or National Oceanic and Atmospheric Administration Corps
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temporarily totally disabled or you cannot work because you are caring for a temporarily totally disabled spouse or other dependent
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working at an eligible internship
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currently unemployed
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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
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Certain conditions may cancel repayment of you loan. These conditions include:
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death or a total and permanently disability
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Cancellation criteria
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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.
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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.
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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).
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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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