The Stafford Loan Process:

1.     File the Free Application for Federal Student Aid (FAFSA). Every

     student that would like a Stafford Loan must first file the FAFSA.

2.     Indicate interest in student loans on the FAFSA. Question 26 on the

     FAFSA inquires about the student’s interest in student loans.

3.     Complete your file. Turn in all requested documents such as the USI Data

      Form and/or Verification Requirements. The student’s file cannot be reviewed and the Stafford Loan proceeds cannot be released without a complete file.

4.     Accept, Adjust, or Decline the offered Stafford Loan amount(s) on

     MyUSI. Instructions on how to do so may be found at

     http://www.usi.edu/finaid/MyAid.ASP.

·         Upon receipt of a student’s FAFSA, USI pre-packages the maximum amount for which the student is eligible for the academic year. Some of the factors that determine the amount of Stafford Loan a student is eligible for are:

                                                            i.    Dependent vs. Independent, as determined through the FAFSA

                                                          ii.    Enrollment Status - Note: Undergraduate students must

                                  beenrolled in at least 6 credit hours (half-time) at the time of

                                  disbursement. Graduate students must be enrolled in at least 5

                                  credit hours of graduate level coursework.

                                                         iii.   Financial Need, as determined through the FAFSA, is required for

                                  subsidized funds.

                                                         iv.   Grade Level based on the number of earned credit hours

·         USI will not process a loan that has not been accepted.

5.     The following is for first-time borrowers and first-time Direct Loan borrowers:

·         Complete Entrance Counseling. Students who are first-time borrowers through the Stafford Loan Program are required to complete entrance counseling before their loan proceeds can be released. Please complete Entrance Counseling requirements by visiting: http://www.usi.edu/finaid/entraDL.asp.

·         Sign the Master Promissory Note. Students who are first-time borrowers under the William D. Ford Direct Loan Program are required to sign a Stafford Loan Master Promissory Note before their loan proceeds can be released. Please sign the Master Promissory Note by visiting: http://www.usi.edu/finaid/mpnstaff.asp.

      * Note: The Master Promissory Note will not be available to   

      sign until at least 10 days after the student accepts the

      Stafford Loan on MyUSI. Master Promissory Notes intended

      for 2008-2009 Academic Year will not be available to sign

      until July at the earliest.

* Note: The Master Promissory Note also applies to students

who have borrowed in the past, but not since Summer of

2005. After Summer of 2005, USI became a Direct Lending School

and students who borrowed before that time will need to sign a

new Master Promissory Note.

Loan Amounts:

Disbursements

The maximum amount is the amount for which the student is eligible for the academic year. The Stafford Loan is automatically split between Fall and Spring, unless specified otherwise through a Stafford Loan Adjustment Form.

Dependent Students (Subsidized Loan Amount Depends on Need)

* A dependent student whose parent is denied a Parent PLUS Loan may be eligible to borrow additional funds under the Stafford Loan Program. A Stafford Loan Request form and verification of the Parent PLUS Loan denial will be required by our office. A USI financial aid counselor can provide information on additional eligibility.

Independent Students (Subsidized Loan Amount Depends on Need)

* Most USI Graduate Students are not eligible for the full $20,500 in two semesters based on cost of attendance.

Maximum Total Subsidized and Unsubsidized Stafford Debt (Lifetime Limit)

Subsidized vs. Unsubsidized:

Subsidized Stafford Loan

The government pays the interest on the loan while the student is in school, during the six-month grace period and during any deferment periods. Subsidized loans are awarded based on financial need and may not be used to finance the family contribution.

Unsubsidized Stafford Loan

The government does not pay the interest. The borrower is responsible for the interest on an unsubsidized loan from the date the loan is disbursed, even while the student is still in school. Students may avoid paying the interest while they are in school by capitalizing interest, which increases the loan amount. Unsubsidized loans are not based on financial need and may be used to finance the family contribution.

Interest Rates and Fees:

Stafford Loan Interest Rates    

            Origination (Processing) Fees

There is a 1% origination or processing fee deducted from your loan disbursements by the Direct Loan Program under federal guidelines. For example, $1,000 borrowed for one academic year would disburse as $990, $495 at the start of the fall semester and $495 at the start of the spring semester. Note that a 2.5% processing fee applies to your Stafford Loan. However, only 1% is deducted contingent upon the first 12 consecutive payments being on-time when repayment commences.

Graduating and Repayment:

           Graduating Students and Final Semester Loans

Loan amounts must be prorated if the loan period includes only the final semester before graduation. The number of semester hours in which the student is enrolled will be divided by 24 to arrive at the percentage which is then multiplied by the maximum annual loan amount. For example, a student taking 12 credit hours would be limited to 50% of the annual amount. Other limitations may reduce the loan further.

Exit Counseling

When a Stafford Loan borrower graduates, drops below half-time enrollment status, or leaves the University, he or she must complete student loan Exit Counseling. USI academic transcripts will be held until the Exit Counseling is completed. Students can complete Exit Counseling by visiting http://www.usi.edu/finaid/exitnew.asp.

Direct Loan Servicing
Direct Loan Servicing including contact information is available online.
Toll free: 1-800-848-0979

Return to Stafford Loan On-Line.