Student Loans

Undergraduate Student Loans

Undergraduate student loans are simple to obtain. First you decide which school best suits you. The most important fit is that the institute of higher education offer the program you wish to take. Secondly is in a location you can get to, and thirdly the environment at the school is one that you feel you will excel in. Often two very different schools offer the same program and they are both easy to get to for you, but one you may find you feel more comfortable in than another. Take some time to walk around the campus and find a place you fit in. Once you decide on your school, apply. When you have been accepted you will need to immediately go on-line and fill out your FAFSA form at the United States Government website. Do not use any website that charges you to fill out a FAFSA. When your FAFSA application is accepted and approved you will need to go to your student loan office, or visit their website and apply for your Stafford Loans.

Stafford loans are subsidized and unsubsidized, most undergraduate student loans will have a portion of each. Subsidized loans you do not pay the interest on while you are in school or in your grace period before your repayment period. Unsubsidized student loans accrue interest while you are in school and in your grace period. The interest is just rolled into the undergraduate student loan amount.

The maximum amount a freshman in school can borrow between both unsubsidized and subsidized Stafford loans is $5,500 if the student is a first year dependent student and only $3,500 of that amount can be in subsidized loans if the student is an independent student. Sophomore students can borrow up to $6,500, but only $4,500 of that amount may be in subsidized loans if they are dependent undergraduate students. Independent undergraduate students may borrow up to $10,500 and no more than $4,500 of that amount may be in subsidized loans.

Undergraduate students do not often think in terms of limits with Stafford loans, but if they are going to continue on to Junior and Senior year, there is a lifetime limit of $31,000 for dependent students of which $23,000 may be subsidized, while undergraduate independent students may borrow up to $57,000 in a lifetime and of that $57,000 only $23,000 may be in subsidized loans. Total loan limits are referred to as aggregate loan limits.

After your loan is approved you will sign a master promissory note. This paper states that you solemnly swear to repay your loan and the interest that accrues on your unsubsidized loan. You may not have to sign a new master promissory note for every loan; the one you sign to begin with may cover you for all of the subsequent undergraduate student loans. After all of your paper work has gone through your borrowed monies will be paid to the school in two installments. Each installment will be for half of the loan amount. The institution you attend will use the money first for tuition and fees, then room and board if applicable, and then other school charges. If there is any money left, the financial aid office will let you know and disburse the extra funds to you b y check if you wish. If you do not wish the funds be given to you there is a paper to fill out in the financial aid office that will direct them to hold onto the extra undergraduate student loan money until later in case you need it.

After your money is in place, attend school and do your best. Do not worry about your loans and let them affect your academic performance in school. College is a fun place to be where learning is the most important thing.

*FYI – If you are in the military and you had student loans before joining, while e you are in the military there is an act that can cap your interest rate at 6% during your military service. You would contact your lender to request this, as it does not happen automatically.