What is the difference between a subsidized and an unsubsidized Stafford loan?
The Federal Government pays the interest for subsidized loans while the student is in college or while the loan is in deferment. Interest begins accruing for unsubsidized loans as soon as the loan is taken out.
How much can I borrow?
For both types of loans, the maximums are $3,500 for freshman, $4,500 for sophomores, $5,500 for juniors and seniors, and $8,500 for graduate students. Undergraduates may borrow an additional $2,000 in unsubsidized Stafford loan after they have exhausted their initial subsidized/unsubsidized eligibility. Graduate students can apply for an additional unsubsidized loan for up to $12,000. You cannot take out subsidized loans in excess of your financial need (the difference between the cost of attending Drew and our estimate of your contribution to your or your child's education). You cannot take out unsubsidized loans in excess of your cost of attendance.
What are the interest rates?
In the 2009-2010 academic year the origination fee is 0.5%. Some lenders may elect to cover this fee. Higher Education Student Assistance Agency is covering the default fee of 1% charged to your Stafford loan. Stafford loans taken out during the period of July 1, 2009 to June 30, 2010 have a fixed interest rate of 5.6% for subsidized loans and 6.8% for unsubsidized loans during the in-school, grace, and deferment and repayment periods.
When are the payments due?
Repayment begins six months after leaving college, payments are made monthly, and you have ten years to repay the loan. Payments are made to the lender.
How do I apply?
- Fill out a FAFSA and indicate you are interested in a Stafford loan. Your FAFSA is your loan application.
- Once Drew receives your FAFSA and other required financial aid forms, your financial aid counselor will determine your eligibility for Stafford loan funds and will award them to you accordingly.
- A Financial Aid Award Agreement will be sent to you. Be sure to sign and date the top, indicate in the columns at the bottom the amount of the loan funds you want or do not want, then return this form to the Office of Financial Assistance at Drew.
- Once we receive your Financial Aid Award Agreement, you will be sent information from Higher Educations Student Assistance Authority of New Jersey (HESAA) on how to apply for your Stafford Loan. You will be directed to a website where you may choose your lender from Drew’s Suggested Lender List. If you choose not to borrow from a lender on our Suggest Lender List, additional information will be provided on how to choose an alternate lender.
- HESAA will also provide you with instructions how to electronically fill out your master promissory note. Students only need to fill this form out once in ten years, so they will not be required to complete it again while at Drew. After you've filled out a Master Promissory Note, in subsequent years, you only need to continue filling out the FAFSA form and returning the Financial Aid Award Agreement to Drew to receive Stafford loan funds.
- The lender will transmit your funds electronically to Drew's business office, who will then credit the funds to your account.
- If you have a credit on your account after receiving loan funds, and are not on any payment plan, the business office can usually mail you a check for the credit on your account 7-10 days after you call them with your request (973-408-3114).
Drew University uses the open platform loan processing system, ELM. This program is simply the electronic format which allows Drew University to process your loan from any lender of your choosing in a swift and efficient manner.
