Federal Stafford Loans
What Is The Federal Stafford Loan?
The FFEL (Federal Family Educational Loan) Stafford
Loan Program enables students to obtain long-term, low interest
loans through banks, credit unions and other lending institutions.
These loans are federally insured and guaranteed by state or national
guaranty agencies. The California state guaranty is EDFUND. We will automatically offer you a Federal Stafford Loan if you qualify. You are not required to accept the loan and we will not process the loan unless you accept it by following the instructions provided in your TITAN Online award summary.
What Are The Eligibility Requirements?
Your eligibility is based upon a review of your data as submitted
on your Free Application for Federal Student Aid (FAFSA) and on
other supporting documents, if required. You must be enrolled
or accepted for enrollment in a degree, certificate or professional
program. Your enrollment status must be at least half-time, (the
equivalent of 6 units), and you must be a citizen or eligible
non-citizen (permanent resident) of the United States.
What Kinds Of Stafford
Loans Are Available?
A subsidized Federal Stafford Loan is based on financial need.
Interest is paid by the federal government until 6 months after you graduate or drop below half-time enrollment. Repayment
of principal and interest begins at the end of the 6-month grace
Unsubsidized Federal Stafford Loans are available for dependent students
who do not qualify, in whole or in part, for subsidized Stafford
Loans. Unsubsidized Federal Stafford Loans are available for most students who do not demonstrate sufficient need to qualify for the annual subsidized loan maximum. Independent students may borrow unsubsidized loan to supplement their subsidized loan eligibility. See "Loan Maximums" . The federal government does not pay the interest
on your behalf, which is 6.890. You are obligated to pay for all the interest
that accrues on your unsubsidized loan during the time you are
enrolled in school, during the grace period, and during any periods
of deferment or repayment. If you choose to defer payment of the
interest, your lender will add the interest to your loan. This
process is called "capitalization". We recommend that you pay the interest each month to reduce the cost of the loan. When interest is
capitalized, your principal balance will be increased by the amount
of interest you have not paid. The interest rate and repayment
terms are the same as for the subsidized Federal Stafford Loan.
Federal Stafford Loans are subject to a 3% origination fee and
a loan insurance fee of up to 1%. Both fees are deducted from
your loan prior to disbursement. Some lenders waive the origination fees.
Understand your Rights and Responsibilities
Before you decide whether to take out an educational loan through
the Federal Stafford Loan Program, it is important for you to
understand your rights and responsibilities as a borrower. By
law, educational institutions must provide pre-loan counseling
to prospective Stafford borrowers.
What Does It Mean to Accept A Student
To receive a student loan, you must sign a "Promissory Note"
which is a promise to repay the loan according to specified terms.
Repayment begins six months after you cease to be enrolled at
least half-time (the equivalent of 6 units). The six months are
a "grace period" to allow you to obtain employment and
make preparations to begin repayment. If you do not repay your
student loan on time, your loan may go into default which has
serious and lasting consequences including a damaged credit rating,
denial of financial aid and garnishment of federal and state tax
refunds or wages.
What If I Request A Reduced Amount And Later I Determine I Need Additional Funds?
Simply contact CSUF to request an increase in your loan amount. We will transmit your loan request to EdFund for guarantee and you will not need to sign a new promissory note.
Do I Have To Reapply For The Loan Each Year?
Yes. Each year when you file your Free Application for Federal Student Aid (FAFSA), we must determine your eligibility for Subsidized and/or Unsubsidized Stafford Loan and send you an award notification. This process gives you the opportunity to evaluate your loan needs and manage your educational borrowing. When you accept a new loan, CSUF obtains the guaranty from EdFund and the loan is added to your serial MPN.
Normally, a single award is issued each year. However, if your eligibility changes for any reason, CSUF will issue a revised award. If you qualify for additional loan, you will need to accept this new loan which represents additional eligibility. If you wish to request additional loan funds, meet with one of our staff who will assist you in determining remaining loan eligibility.
Do I Have To Accept A Loan?
Do not accept a loan if you can meet your educational expenses without a loan. Even after you accept a loan, you may at any time reconsider your decision and decline part or all of the loan. Visit the Office of Financial Aid to discuss your situation with a staff member.