Kettering University participates in the Federal Direct Stafford Loan Programs. Students and/or Parents borrow directly from the federal government.
Eligibility
Federal Direct Stafford Loans are for undergraduate, graduate and professional degree students, enrolled at least half-time, who meet the general requirements to receive federal aid.
There are two types of Stafford Loans: subsidized and unsubsidized. The subsidized loan is need-based. (Financial need is determined by the difference between the Cost of Attendance and your Expected Family Contribution.) Students borrowing the subsidized loan do not pay interest on the loan while they are enrolled at least half-time. The U.S. Department of Education pays interest while the borrower is in school and during grace and deferment periods. Repayment begins six months after student ceases at least half-time enrollment.
Unsubsidized loans are non-need-based. Students are not required to demonstrate financial need to borrow an unsubsidized loan. Students borrowing unsubsidized loans must pay interest while they are enrolled in school.
Applying for a Federal Direct Loan
You must complete the Free Application for Federal Student Aid (FAFSA). The financial aid office will determine your eligibility, and the amount you are eligible for will appear on your Financial Aid Award Letter. You can accept your loan by completing the Request for a Direct Federal Loan Form. You must fulfill certain conditions before loan funds can be credited to your account. These include, but may not be limited to:
- For First Time Borrowers - Completion of a Loan Entrance Interview – An Entrance Interview is actually a counseling session which is designed to help you better understand your obligation as a borrower and provides other useful information on the loan process. Entrance Interviews are required for all first time borrowers.
- Signing the Master Promissory Note – You must complete a Master Promissory Note (MPN) at https://studentloans.gov using your federal Personal Identification Number (PIN). The same PIN used to complete your online FAFSA is used to sign your MPN.
Federal Direct Student Loan Limits
The chart below lists the maximum annual subsidized and unsubsidized combine amounts a student may borrow in the Federal Direct Loan program. The annual maximum amount may be awarded to you as a combination of subsidized and unsubsidized. You must pay the interest on the portion that is unsubsidized while in school, and during any grace or in-school deferment periods, unless you elect to have the interest added to the principal. This is called capitalization. Having the interest capitalized will mean larger payments when you begin repayment.
Award Amounts
Stafford Loan limits effective July 1, 2009 depend on year in school and dependency status.
| Year/Classification | Base Amount | Additional Unsubsidized Loan Amt. | Total |
| Dependent Students* | |||
| Freshman | $3,500 | $2,000 | $5,500 |
| Sophomore | $4,500 | $2,000 | $6,500 |
| Junior or Senior | $5,500 | $2,000 | $7,500 |
| Independent Students* | |||
| Freshman | $3,500 | $6,000 | $9,500 |
| Sophomore | $4,500 | $6,000 | $10,500 |
| Junior or Senior | $5,500 | $7,000 | $12,500 |
| Graduate Students | $8,500 | $12,000 | $20,500 |
*Dependent students whose parents are denied a PLUS loan should refer to the independent chart.
Federal PLUS Loan
The Federal Direct PLUS loan is available to parents of dependent students. The maximum amount that may be borrowed is calculated by subtracting other aid from the cost of attendance. Plus loan borrowers are subject to a credit check to determine credit worthiness. A 2.5% origination fee is deducted from the loan amount. Applications for the Direct Plus loan are available at www.studentloans.gov.
Interest Rates
For Stafford Loans disbursed between July 1, 2011, and June 30, 2012, the interest rate is fixed at 3.4% for undergraduate Subsidized Stafford Loans (only) and fixed at 6.8% for Unsubsidized Stafford Loans and all graduate/professional Stafford Loans. The borrower will be assessed a fee of .5% of the amount borrowed in government fees.
Loan Repayment
Borrower Grace Periods
After you graduate, leave school, or drop below half-time enrollment, you have a period of time before you have to begin repayment. This "grace period" will be
Six months for a Federal Stafford Loan (Direct Loan Program or Federal Family Education Loan (FFEL) Program).
PLUS Borrowers - The repayment period for a Direct PLUS Loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. However, a graduate student PLUS Loan borrower (as well as a parent PLUS borrower who is also a student) can defer repayment while the borrower is enrolled at least half-time, and, for PLUS loans first disbursed on or after July 1, 2008, for an additional six months after the borrower is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the borrower during the deferment.
Parent PLUS Loan borrowers whose loans were first disbursed on or after July 1, 2008, may choose to have repayment deferred while the student for whom the parent borrowed is enrolled at least half-time and for an additional six months after that student is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the parent during the deferment.
Sample Loan Repayment
You can use the following chart as a reference to estimate your monthly loan repayment amount assuming that your borrow the Federal Direct Subsidized and Unsubsidized Stafford Loan for all 4 ½ years you are enrolled at Kettering University as a dependent student using the Standard Repayment Plan. You should use this as a reference only; for more specific repayment examples go to the U.S. Department of Education's Direct Loan Program
|
|
Grace Period |
Repayment Term |
Interest Rate |
Principal Amount Borrowed |
Estimated Monthly Payment |
Estimated Total Principal & Interest Payment |
|
Federal Direct Subsidized Stafford Loan |
6 months |
10 years |
6.8% |
$21,750 |
$250.30 |
$30,036 |
|
Federal Direct Unsubsidized Stafford Loan |
6 months |
10 years
|
6.8% |
$9,000 |
$103.57 |
$12428.40 |