Federal Direct Stafford Loan Program
These federally guaranteed Stafford Student Loans are available to students who apply for financial aid by completing the Free Application for Federal Student Aid (FAFSA). The University of Maine at Presque Isle is a direct lending institution with loans available through the William D. Ford Federal Direct Loan Program. A student may be eligible for a Federal Subsidized or Unsubsidized Stafford Loan. The “subsidized” loan is need-based and the government pays the interest on the loan while the student is in school or in deferment. The “unsubsidized” loan in non-need based and the student is responsible for the interest while in school and during deferment periods. All Direct Loan borrowers are charged a minimal loan service fee determined by the Department of Education.
Students are notified of their Stafford Loan eligibility through their award letters generated by the Student Financial Services Office.
Annual Stafford Loan Limits
Federal regulations specify the maximum Federal Stafford Loan amount any student can borrow each academic year, depending upon grade level. Actual eligibility is specified on the University of Maine Award Notification and may be less than the annual maximum:
Effective July 1, 2008
|Grade Level and Dependency||Credit Hours Earned||Maximum Subsidized Stafford||Maximum Stafford (subsidized and unsubsidized)|
|Dependent first-year||less than 24||$3,500||$5,500|
|Dependent sophomore||24 -53||$4,500||$6,500|
|Dependent junior or senior||54 and above||$5,500||$7,500|
|Independent first-year||less than 24||$3,500||$9,500|
|Independent junior or senior||54 and above||$5,500||$12,500|
NOTE: Dependent students whose parents are denied a Federal PLUS Loan are eligible for the independent student limits if there is a valid PLUS Loan denial (dated within the last year) on file in the Student Financial Services office.
In order to have the initial loan disbursement, students are required to complete a loan entrance counseling session. In addition, the students must complete the Master Promissory Note. Loans will automatically be disbursed in subsequent semesters. Before leaving school, students must complete a loan exit counseling session. Information on all of these items can be found at http://www.studentloans.gov.
The Perkins Loan is a federally funded, 5% fixed-interest loan for undergraduate and graduates attending school on a least a half-time basis. Eligibility is based on need. Undergraduates are limited to borrowing $4,000 for each year of undergraduate study with a maximum of $20,000 for four years. Graduate students may borrow up to $40,000 including undergraduate loans. The actual amount of a Perkins Loan will depend on the extent of the students’ financial need and funds available for loans. Interest does not begin to accrue until 9 months after you graduate, leave school or drop below half-time status. A student’s monthly repayment amount will depend upon size of the debt and the length of the repayment period. Cancellation of the loan amount plus interest is granted under certain conditions.
In order to disburse the loan, students are required to complete the loan disclosure. The master promissory note is then mailed to the first time borrower. Students must repeat the loan disclosure every borrowing year thereafter. Before leaving school, students must do the loan exit at https://www.mycampusloan.com.
Federal Direct PLUS Loans
Federal PLUS Loans enable parents with good credit histories to borrow for the educational expenses of each child who is a dependent undergraduate student enrolled at least half-time. The variable interest rate is adjusted each year but will never exceed 9%.
The yearly limit on the PLUS Loan is equal to the student’s cost of attendance minus any other financial aid received. Parents pay a small origination fee, deducted proportionately each time a loan payment is made. There is no grace period for these loans; interest begins to accumulate at the time the first disbursement is made. Generally, parents must begin repaying both principal and interest 60 days after the date of the final loan disbursement.
For information regarding other loans available to meet your remaining financial need, please contact the Student Financial Services Office.