Funding Education Beyond High School

January 1, 2008

Funding Education
Beyond High School
The Guide to Federal Student Aid
2008–09
Useful Web Sites
Student Aid on the Web
www.FederalStudentAid.ed.gov
Click on Students, Parents and Counselors
At this Web site you can| Find information on federal student fi nancial
aid and access sources of nonfederal aid.| Use FAFSA4caster to get an early estimate of
your eligibility for federal student aid, and an
early start in the fi nancial aid process. When
you’re ready to apply for aid, much of the
information you enter in FAFSA4caster
will populate the FAFSA on the Web.| Apply online using FAFSA on the Web (the
online version of the Free Application
for Federal Student Aid or FAFSA).| Obtain a Federal Student Aid PIN to sign your
FAFSA on the Web.| Look up the status of your federal student loan.| Use “MyFSA” to create a personalized folder
to record your interests, career and college
searches and any relevant personal information.
Track your progress in the college planning
and application process. Store information in
“MyFSA” to prepopulate fi elds on the
FAFSA on the Web.| Get information to help you decide on a career
and locate schools offering majors in that fi eld.
Then apply to various schools online without
leaving the site.
Free Help Completing the FAFSA
www.FederalStudentAid.ed.gov/completefafsa
The William D. Ford Federal Direct
Loan Program (Direct Loan)
U.S. Department of Education as lender
www.ed.gov/offi ces/OSFAP/DirectLoan/index.html
Use this Web site to fi nd out more information on the Direct Loan
Program, such as repayment options and interactive calculators.
Direct Loan Servicing Online
www.dl.ed.gov
Use this Web site to make online payments, view account balance,
change billing options, enroll in electronic services, and much more.
U.S. Department of Labor’s Occupational
Outlook Handbook (information on various
www.bls.gov/oco
Frequently Requested
Telephone Numbers
Federal Student Aid
Information Center (FSAIC)
1-800-4-FED-AID (1-800-433-3243)
TTY users can call 1-800-730-8913
Callers in locations without access to 1-800 numbers
may call 319-337-5665 (this is not a toll-free number).
The FSAIC staff can answer your federal student
aid questions and can give you all the
help you need—FREE—including:| information about federal student
aid programs,| help completing the FAFSA,| help in making corrections to your Student
Aid Report (SAR), which contains your
application results,| information about the process of determining
fi nancial need and awarding aid, and| information about your federal student loans.
You can also use an automated response system at this number
to fi nd out if your FAFSA application has been processed and
to request a copy of your SAR. You can also write to the Federal
Student Aid Information Center:
Federal Student Aid Information Center
P.O. Box 84
Washington, DC 20044-0084
Direct Loan borrower services
1-800-848-0979 | TTY users can call 1-800-848-0983
Direct Consolidation Loan information
1-800-557-7392 | TTY users can call 1-800-557-7395
Inspector General Hotline
To report student aid fraud (including identity theft),
waste or abuse of U.S. Department of Education funds
1-800-MIS-USED (1-800-647-8733)
E-mail: oig.hotline@ed.gov
Web site: www.ed.gov/misused
Useful Web Sites
Useful Web Sites Frequently Requested
Telephone Numbers
www.FederalStudentAid.ed.gov/completefafsa
Use this Web site to fi nd out more information on the Direct Loan
Program, such as repayment options and interactive calculators.
Use this Web site to make online payments, view account balance,
change billing options, enroll in electronic services, and much more.
waste or abuse of U.S. Department of Education funds
U.S. Department of Education as lender
www.ed.gov/offi ces/OSFAP/DirectLoan/index.html
www.dl.ed.gov
careers and their earning potential)
www.bls.gov/oco
TTY users can call
Callers in locations without access to 1-800 numbers
may call 319-337-5665 (this is not a toll-free number).
The FSAIC staff can answer your federal student
aid questions and can give you all the
help you need—FREE—including:| information about federal student
aid programs,| help completing the FAFSA,| help in making corrections to your Student
Aid Report (SAR), which contains your
application results,| information about the process of determining
fi nancial need and awarding aid, and| information about your federal student loans.
You can also use an automated response system at this number
to fi nd out if your FAFSA application has been processed and
to request a copy of your SAR. You can also write to the Federal
Student Aid Information Center:
Frequently Requested
Telephone Numbers
1-800-4-FED-AID (1-800-433-3243)
FFFFrrrreeeequeeeenttttllllyyyy Reeeequeeeesssstttteeeed
TTTTeeeelllleeeephoneeee Numbeeeerrrrssss
1-800-730-8913
If you paid for a copy of this FREE publication, please write
to the following address and give us the name and address
of the organization that charged you.
Federal Student Aid Information Center
P.O. Box 84
Washington, DC 20044-0084
Washington, DC 20044-0084
Funding Education
Beyond High School
| e Guide to Federal Student Aid | 2008–09
U.S. Department of Education Federal Student Aid
U.S. Department of Education
Margaret Spellings
Secretary
Federal Student Aid
Lawrence Warder
Acting Chief Operating Offi cer
Student Aid Awareness and Applicant Services
Jennifer Douglas
General Manager
November 2007
Th is guide is in the public domain. Authorization to reproduce
it in whole or in part is granted. While permission to reprint
this publication is not necessary, the citation should be: U.S.
Department of Education, Federal Student Aid, Students
Channel, Funding Education Beyond High School: Th e Guide
to Federal Student Aid 2008–09, Washington, D.C., 2007
To order copies of this guide, write to:
U.S. Department of Education
P. O. Box 1398
Jessup, MD 20794-1398
or fax your request to:
301-470-1244
or e-mail your request to:
orders@FSApubs.org
or call in your request toll-free:
1-800-394-7084 or 1-877-433-7827 (1-877-4-ED-PUBS). If
877 service is not yet available in your area, call 1-800-872-5327
(1-800-USA-LEARN). Th ose who use a telecommunications
device for the deaf (TDD) or a teletypewriter (TTY), should
call 1-800-437-0833.
or order online at www.FSAPubs.org
Th is guide is also available on the Federal Student Aid Web
site at www.FederalStudentAid.ed.gov
On request, this publication is available in alternate formats,
such as Braille, large print, or CD. For more information, please
contact the Federal Student Aid Information Center at
1-800-433-3243 (1-800-4-FED-AID). TTY users (for the
hearing-impaired) should call 1-800-730-8913.
Th is guide contains Web site addresses for information created
and maintained by outside organizations. Th is information is
provided for the reader’s convenience. Th e U.S. Department of
Education is not responsible for controlling or guaranteeing the
accuracy, relevance, timeliness or completeness of this outside
information. Further, the inclusion of information or Web site
addresses does not refl ect the importance of the organization,
nor is it intended to endorse any views expressed, or products
or services off ered.
All Web site addresses included in this publication were accurate
at press time.
Th e information in this guide was compiled in summer 2007. For any changes
to the federal student aid programs since then, visit www.FederalStudentAid.ed.gov
and click on “Students, Parents and Counselors.” Any new information will
appear in the “Announcements” section.
The Guide iii
Mission of Federal Student Aid
Federal Student Aid’s core mission is to ensure that all
eligible individuals benefi t from federal fi nancial assistance
—grants, loans and work-study programs—for education
beyond high school. The programs we administer
comprise the nation’s largest source of student aid. During
the 2007–08 school year alone, we provided approximately
$83 billion in new aid to nearly 10 million postsecondary
students and their families. Our staff of 1,100 is based in
10 cities in addition to our Washington headquarters.
You have many postsecondary education options from
which to choose. But whether you decide to attend a fouryear
college or university, community college or technical
school, the knowledge you gain will be of value to you for
the rest of your life, no matter where you go or what you do.
A postsecondary education gives you more opportunities.
Th ose who receive education credentials beyond a high
school diploma have more jobs to choose from and earn
much more than those who do not pursue an education
beyond high school. For example, according to the U.S.
Census Bureau, a person with a bachelor’s degree earns
almost double what someone with only a high school
diploma earns.
Pursuing education beyond high school is an opportunity
you should not deny yourself simply because you
are not sure it’s for you. Many students don’t know what
career path to follow. But exposure to different academic
subjects, people and points of view helps you decide what
career you would like to pursue. After high school, you
get to study what you are interested in and, when you
graduate, you will get paid for your knowledge.
So go for it, and let us help you make it happen.
Federal Student Aid, an offi ce of the U.S. Department of Education, plays
a central and essential role in the nation’s postsecondary education community.

The Guide v
A Message to Our Readers
This guide,
Funding Education Beyond
High School: The Guide to Federal
Student Aid, will help you through
the process of applying for federal
financial aid.
The cost of education beyond high school continues
to rise. At Federal Student Aid, we offer financial aid
programs that help millions of students manage the
cost of education each year.
Education is your most important first step
toward success.
Education creates opportunities. No qualified student
should be denied an education because the cost is too
high. So, if you’re considering education beyond high
school and wondering how you will pay, this guide can
help. There’s money available—but you need to apply
to be eligible.
We tell you exactly how in this guide. In fact, the guide
will tell you most everything you need to know about
federal student assistance programs—grants, loans,
work-study and more. It leads you step by step through
the process—including completing the required
application. So rest easy; the guide explains everything
in simple, direct terms.
We’re Federal Student Aid—
your expert source of aid.
Our team at Federal Student Aid is committed to
making sure that all eligible students can benefit
from financial help for education beyond high school.
There may be a good deal more of this help on hand than
you think. Last year alone, we provided nearly $83 billion
in the form of grants, work-study and low-interest loans.
About 10 million students benefited from this aid. Many
of them could not have managed the rising cost of education
without our help.
Chances are you know someone who took advantage of
one or more of our federal student assistance programs. It’s
very possible that you can make this happen for yourself or
a family member. The key: Start here, today, and go further.
Start with us. We’re here to help…
at www.FederalStudentAid.ed.gov
You’ll find lots of useful information at our Web
site. There you can find the online version of this
and other publications, apply for federal student
aid online and have just about any question on
federal student aid answered. This year, you’ll also
find a brand new product—FAFSA4caster. We
believe it’s important to notify students of their
aid eligibility early. FAFSA4caster helps prospective
students and their parents to prepare financially
for a postsecondary education by estimating their
federal student aid eligibility. See page 3 for more
information on FAFSA4caster.
Our office publishes many other print publications that
you will find helpful (see page 41). All of them can be
ordered free at 1-800-4-FED-AID (1-800-433-3243)
or go to www.FederalStudentAid.ed.gov/pubs. So
take advantage of federal grant, work-study and loan
programs as well as aid available from your state and
the school you plan to attend. These resources might
just give you the boost you need to make community
college, university or trade school a reality. So get
started, we’re here to help as you go forward.
— The Federal Student Aid Team
U.S. Department of Education
The Guide vi
What’s Inside the Guide
Mission of Federal Student Aid_ _________________________________ iii
A Message to Our Readers___________________________________________ v
Federal Student Aid
at a Glance
Considering Education
Beyond High School____________________________________________________ x
Federal Student Aid Summary Chart________________________________ xi
What is federal student aid?___________________________________________xii
How do I apply for federal student aid?___________________________xii
Who gets federal student aid?_______________________________________ xiii
Process Summary Chart_________________________________________________ xiii
FAFSA4caster_______________________________________________________________ xiii
A
What You Should Know
Before You Apply
Education After High School_____________________________________ xiv
Earnings in 2005 by Educational Attainment
of the Population 25 Years and Over_________________________________ 1
What questions should I ask when considering
a college or career school?__________________________________________________ 1
Where can I find this information?_______________________________________ 1
Take the next steps._ _________________________________________________________ 2
What kind of information should I get from
a school?________________________________________________________________________ 2
Find out about financial aid at the school.______________________________ 2
Find out the school’s refund policy._ _____________________________________ 2
Find out the school’s return-of-aid policy.______________________________ 2
Find out the school’s completion and
transfer-out rates.____________________________________________________________ 2
FAFSA4caster______________________________________________________________ 3
What is FAFSA4caster?______________________________________________________ 3
Who should use FAFSA4caster?___________________________________________ 3
What are other benefits?____________________________________________________ 3
How do I get started?________________________________________________________ 3
What information does FAFSA4caster provide?_______________________ 3
Reducing the Cost of Education___________________________________ 3
Lower-cost schools___________________________________________________________ 3
State Higher Education Agency_ __________________________________________ 3
Work or volunteer opportunities_ ________________________________________ 4
Tax breaks______________________________________________________________________ 4
Hope or Lifetime Learning tax credit____________________________________ 4
Am I Eligible?_ ____________________________________________________________ 4
Basic requirements___________________________________________________________ 4
Financial need_ _______________________________________________________________ 4
Education requirements____________________________________________________ 4
Legal and other requirements_____________________________________________ 4
“Match” requirements_______________________________________________________ 5
Financial need and Expected Family
Contribution (EFC)__________________________________________________________ 5
I think I have some special circumstances in
my family. Are these considered in determining
my financial needs?__________________________________________________________ 5
What Type of Federal Student Aid Might I Get?___________ 6
There are three types of federal student aid_ ___________________________ 6
Grants_________________________________________________________________________ 6
There are four types of federal student aid grants_____________________ 6
What is a Federal Pell Grant?______________________________________________ 6
What is a Federal Supplemental Educational
Opportunity Grant (FSEOG)? _____________________________________________ 6
What’s the difference between Federal Pell Grants
and FSEOGs?__________________________________________________________________ 6
What is an Academic Competitiveness
Grant (ACG)?__________________________________________________________________ 6
What is a National Science and Mathematics Access
to Retain Talent Grant (National SMART Grant)?_ ___________________ 7
What is the difference between the ACG and
the National SMART Grant?_ ______________________________________________ 7
How much financial aid can I get?________________________________________ 7
How will I be paid?___________________________________________________________ 8
How often will I receive funds?____________________________________________ 8
Can I receive a grant if I’m enrolled less
than half-time?________________________________________________________________ 8
The Guide vii
What’s Inside The Guide
Work-Study_________________________________________________________________ 8
What is the Federal Work-Study (FWS) Program?____________________ 8
What kinds of jobs are there?______________________________________________ 8
Are Federal Work-Study jobs on campus or off campus?____________ 8
How much can I earn?_______________________________________________________ 8
How will I be paid?__________________________________________________________ 8
Can I work as many hours as I want?_____________________________________ 8
Loans_ _________________________________________________________________________ 8
Types of loans_ ________________________________________________________________ 8
Student Loan Comparison Chart______________________________________ 9
What are the differences in these loan programs?_ _________________ 10
How do I apply for a Perkins or Stafford Loan?______________________ 10
How much can I borrow?_________________________________________________ 10
Maximum Annual Loan Limits Chart—Subsidized
and Unsubsidized Direct and FFEL Stafford Loans ____________ 11
Other than interest, are there any fees or charges
required to get these loans?______________________________________________ 11
How will I be paid?_________________________________________________________ 11
Can I cancel my student loan if I change my mind,
even if I have signed the promissory note agreeing
to the terms of the loan?_ _________________________________________________ 12
PLUS Loans_______________________________________________________________ 12
How do parents and graduate and professional
degree students apply for a PLUS Loan?______________________________ 12
What are the eligibility requirements for
PLUS Loans?_________________________________________________________________ 12
Are there any other requirements?_____________________________________ 12
Stafford and PLUS Loan Summary_____________________________________ 13
Do we need to find a lender?_____________________________________________ 13
How much can a parent or graduate and
professional degree student borrow under
the PLUS Loan program?_________________________________________________ 13
If a parent obtains a PLUS Loan to help pay for
a dependent student’s education, who receives
the loan money—the parent or the student?_________________________ 13
Can a borrower cancel a PLUS Loan even after
signing the promissory note and agreeing to the
terms of the loan?_ _________________________________________________________ 14
Other than interest, are there any fees or charges
to get a PLUS Loan?________________________________________________________ 14
More Federal Student Aid Information_ ____________________ 14
Other Financial Aid Sources______________________________________ 14
Financial aid office_________________________________________________________ 14
State Higher Education Agency_ ________________________________________ 14
AmeriCorps_________________________________________________________________ 14
Robert C. Byrd Honors Scholarship Program
(Byrd Program)_____________________________________________________________ 14
Public libraries and the Internet________________________________________ 14
Businesses and labor organizations____________________________________ 14
Organizations, foundations, etc.________________________________________ 14
U.S. Armed Forces_________________________________________________________ 14
U.S. Department of Veterans Affairs___________________________________ 14
Internal Revenue Service (IRS)__________________________________________ 15
www.students.gov__________________________________________________________ 15
It’s a Jungle Out There …
Be Careful_ __________________________________________________________ 15
Scholarship scams_____________________________________________________ 15
What about scholarship
search services?_____________________________________________________________ 15
How can I tell if these search services
are scams? Are there any signs I should look for?___________________ 15
Identity Theft_ ___________________________________________________________ 15
What is identity theft?_____________________________________________________ 15
How can this happen?_ ____________________________________________________ 15
What happens if someone steals my identity
and gets a student loan in my name?___________________________________ 16
How can I avoid identity theft?__________________________________________ 16
B
Start Here …
How Do I Apply?
Complete Your FAFSA. Receive Your SAR._ _______________ 18
Getting Your Federal Student Aid PIN_______________________ 19
What is a Federal Student Aid PIN and what is it used for?_______ 19
Should I get a PIN if I’m not applying online?_______________________ 19
Repaying Your Student Loan
The Guide viii
What’s Inside the Guide
How and when should I get a PIN?_ ____________________________________ 19
How do I sign my application? What if I don’t have a PIN?_ ______ 19
I submitted my FAFSA but did not sign with a PIN.
Will I get one automatically?_____________________________________________ 19
What if I have questions about the PIN?_ _____________________________ 20
Can I get a PIN from the Federal
Student Aid Information Center?_______________________________________ 20
Completing the FAFSA______________________________________________ 20
What information do I need to complete
a FAFSA accurately?_ ______________________________________________________ 20
Process for new applicants_ ______________________________________________ 20
Can I apply online?_________________________________________________________ 20
Why should I apply online?_ _____________________________________________ 21
What if I decide I want a paper FAFSA?_______________________________ 21
Then what should I do?___________________________________________________ 21
Dependency Status_________________________________________________________ 21
I am considered a dependent student; however,
I have no contact with my parents. What do I do
about reporting my parents’ income?__________________________________ 22
If I am a dependent student, whose information do
I report if my parents are divorced or separated?___________________ 22
Do I report stepparents’ information?_________________________________ 22
Do I need to fill out a FAFSA
every year I apply for aid?_ _______________________________________________ 22
What if I need help filling out my FAFSA?____________________________ 23
How do the schools I’m interested in attending
get my FAFSA information?_____________________________________________ 23
What if I want to add or change schools later?_______________________ 23
The Student Aid Report (SAR)
and Why It’s Important_ ____________________________________________ 23
After you apply for federal student aid
you’ll receive your FAFSA results in your SAR_______________________ 23
What do I do with my SAR?______________________________________________ 23
If you need to make corrections to your SAR_ _______________________ 23
Once my SAR is accurate and complete, how
do I find out if I’m eligible for federal student
aid and how much I’ll receive?_ _________________________________________ 24
C
Repaying
Your Student Loan
What You Need to Know as a Borrower________________________26
Borrower’s Responsibilities_______________________________________ 27
Think about how much you’re borrowing_______________________________ 27
Signing a promissory note means you
agree to repay the loan_ ___________________________________________________ 27
Make payments regardless of receiving
billing notices_______________________________________________________________ 27
Continue to pay while waiting for deferment
or forbearance approval_ _________________________________________________ 27
Notify your lender or loan servicing agency
when you …_ ________________________________________________________________ 27
Receive entrance and exit counseling__________________________________ 27
Borrower’s Rights______________________________________________________ 28
What you need to know about your loan______________________________ 28
Before you leave school_ __________________________________________________ 28
Grace period_________________________________________________________________ 28
Loan repayment schedule______________________________28
Sale of loan___________________________________________________________________ 28
Loan Repayment_______________________________________________________ 29
When do I start paying back my student loans?_ ____________________ 29
How much time do I have to repay my
student loans?_______________________________________________________________ 29
When do parents and graduate and professional degree
students begin repaying a PLUS Loan?________________________________ 29
How much will I have to repay and how often
do I make payments?______________________________________________________ 29
Do I have repayment options?___________________________________________ 29
Examples of Typical Perkins Loan
Repayments Chart________________________________________________________ 30
How do parents or graduate and professional
degree students repay their PLUS Loan?______________________________ 30
Are there tax incentives while paying back
student loans?_______________________________________________________________ 30
Examples of Typical Direct and FFEL
Stafford Loan Repayments____________________________________________ 31
C
The Guide ix
What’s Inside The Guide
Postponing Loan Repayment
(Deferment and Forbearance)___________________________________ 31
What is deferment?_ _______________________________________________________ 31
How do I qualify for a deferment?______________________________________ 31
Can my parents or graduate and professional
degree students defer repayment of their PLUS Loan?_____________ 31
Is there deferment for active military service?_______________________ 31
Loan Deferment Summary Chart____________________________________ 32
What is forbearance?______________________________________________________ 32
Applying for deferment or forbearance_ ______________________________ 32
Are there circumstances when I must be granted
a mandatory forbearance?________________________________________________ 32
Consolidating Your Loans_ ________________________________________ 33
What is loan consolidation?______________________________________________ 33
What kinds of loans can be consolidated?_ ___________________________ 33
When can I consolidate my loans?______________________________________ 33
How do I get a consolidation loan
and where can I get more information?_ ______________________________ 33
What’s the interest rate on a consolidation loan?____________________ 33
Are there any disadvantages to getting
a consolidation loan? _ ____________________________________________________ 33
Loan Discharge or Cancellation_________________________________ 34
Is it ever possible to have my federal student
loan discharged or canceled?_ ___________________________________________ 34
What qualifies my loan for discharge?_________________________________ 34
What qualifies my loan for cancellation?______________________________ 34
How do I find out if I can get a discharge or cancellation?_ _______ 34
Perkins Loan Discharge and Cancellation
Summary Chart____________________________________________________________ 34
Stafford and PLUS Loan Discharge and
Cancellation Summary Chart_________________________________________ 35
Important Terms_ _____________________________________________________36
State Higher Education Agencies___________________________39
Other Federal Student Aid Publications_______________ 41
The Guide x
PREPARE APPLY RECEIVE REPAY
W hatever type of school beyond high school you
attend—whether it’s university, trade school or
community college—you have to be thinking about
how you’re going to pay for it. The cost of education
continues to rise. But if you’re determined to achieve
the success that education beyond high school can
bring, the investment is worth it. But that doesn’t
mean managing these costs isn’t a challenge.
Federal Student Aid can help. We assist more than
10 million students each year with grants, lowinterest
loans and work-study programs. That’s what
this guide is about: steering you step by step through
the process of applying for and receiving aid and
repaying student loans.
Now is the time to take action. You may qualify for
more financial aid than you think. But you won’t
know until you follow the steps we describe here.
Investing a little time now could pay off in a brighter
future. Start right here.
Federal Student Aid
At a Glance
Considering Education
Beyond High School
The Guide xi
Federal Student Aid Summary Chart
Federal Student Aid Program Type of Aid Program Details Annual Award Limits
Federal Pell Grant Grant: does not have to be repaid Available almost exclusively to undergraduates; all eligible
students will receive the Federal Pell Grant amount they
qualify for.
$400 to $4,310 for 2007–08
Federal Supplemental
Educational Opportunity
Grant (FSEOG)
Grant: does not have to be repaid For undergraduates with exceptional fi nancial need; priority
is given to Federal Pell Grant recipients; funds depend on
availability at school.
$100 to $4,000
Academic
Competitiveness Grant (ACG)
Grant: does not have to be repaid For undergraduates receiving Pell Grants who are U.S.
citizens enrolled full-time in their fi rst or second
academic year* of study.
For fi rst academic year* students who have completed a
rigorous secondary school program of study, graduated
from high school after Jan. 1, 2006, and have not been
previously enrolled in an undergraduate program.
First academic year* students:
up to $750
For second academic year* students who have completed a
rigorous secondary school program of study, graduated
from high school after Jan. 1, 2005, and have at least a
3.0 cumulative GPA at the completion of their fi rst year
of postsecondary study.
Second academic year* students:
up to $1,300
National Science and
Mathematics Access
to Retain Talent Grant
(National SMART Grant)
Grant: does not have to be repaid For undergraduates receiving Pell Grants, who are U.S.
citizens enrolled full-time in their third or fourth academic
year* of an eligible degree program majoring in physical,
life, or computer sciences, engineering, technology, mathematics
or a critical-need foreign language and have at
least a 3.0 cumulative GPA.
Up to $4,000 for each of the
third and fourth academic years*
Federal Work-Study (FWS) Money is earned while attending
school; does not have to be repaid
For undergraduate and graduate students; jobs can be on
campus or off campus; students are paid at least federal
minimum wage.
No annual minimum or
maximum award amounts
Federal Perkins Loan Loan: must be repaid Interest charged on this loan is 5 percent for both
undergraduate and graduate students; payment is
owed to the school that made the loan.
$4,000 maximum for undergraduate students;
$6,000 maximum for graduate and professional
degree students; no minimum award amount
Subsidized Direct or
FFEL Stafford Loan
Loan: must be repaid Subsidized: U.S. Department of Education pays interest
while borrower is in school and during grace and deferment
periods; you must be at least a half-time* student
and have fi nancial need.
$3,500 to $8,500,
depending on grade level
Unsubsidized Direct
or FFEL Stafford Loan
Loan: must be repaid Unsubsidized: Borrower is responsible for interest during
life of the loan; you must be at least a half-time* student;
fi nancial need is not a requirement.
$3,500 to $20,500 (less any subsidized amounts
received for the same period), depending on grade
level and dependency status
Direct or FFEL PLUS Loan Loan: must be repaid Available to parents of dependent undergraduate students
and graduate and professional students enrolled at least
half-time.* Financial need is not a requirement.
Maximum amount is cost of attendance* minus any
other fi nancial aid the student receives; no minimum
award amount
PLUS Loans are unsubsidized: Borrower is responsible for
interest during the life of the loan.
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll fi nd a description of them under “Important Terms,” beginning on page 36.
Most student fi nancial aid comes from the federal government
programs you’ll read about here. Th e U.S. Department of Education’s
offi ce of Federal Student Aid administers these programs. For
other sources of student fi nancial aid, see page 14.
Applying for federal student aid is FREE; that’s why our application
is called the Free Application for Federal Student Aid
(FAFSA). If you need help completing the FAFSA, that help is
free too. You don’t have to pay anyone for help and you should be
aware of scams and services that will search for fi nancial aid for
you for a fee. Th e College Scholarship Fraud Protection Act protects
you from this type of fraud. We tell you how to protect yourself
from scams on page 15.
PREPARE APPLY RECEIVE REPAY
Federal Student Aid at a Glance
Th e information in this guide was compiled in summer 2007. For any changes to the federal student aid programs since then, visit
www.FederalStudentAid.ed.gov and click on “Students, Parents and Counselors.” Any new information will appear in the “Announcements” section.
Do you need help paying for college or for a career or vocational school? Th is section is a quick reference to our federal student aid
programs and how to apply for this aid. Th e rest of this publication provides more detail of what you need to know.
The Guide xii
STEP STEP
STEP STEP
STEP STEP
STEP STEP
Get free information and help from
your school counselor, the financial aid
office at the college or career school
you plan to attend, or the U.S. Department
of Education, Federal Student Aid
at www.FederalStudentAid.ed.gov
or 1-800-4-FED-AID (1-800-433-3243).
Free help is available any time during
the application process. You should
never have to pay for help.
Collect the documents needed to
apply, including income tax returns
and W-2 forms (and other records of
income). A full list of what you need
is at www.fafsa.ed.gov. Tax return
not completed at the time you
apply? Estimate the tax information,
apply, and correct information later.
Federal Student Aid will send you a
Student Aid Report (SAR)—which is a
summary of the information from your
FAFSA. Review your SAR, and if
necessary, make changes or corrections
and submit your SAR for reprocessing.
Your complete, correct SAR will contain
your Expected Family Contribution
(EFC)—the number used to determine
your federal student aid eligibility.
Get a Federal Student Aid PIN, a
personal identification number. A
PIN lets you apply, “sign” your
online Free Applicationfor Federal
Student Aid (FAFSA), make
corrections to your application
information, and more—all
online. Apply for a PIN at
www.pin.ed.gov.
All students: Contact the financial aid office if you
have any questions about the aid being offered.
First-time applicants: Review award letters from
schools and compare the aid being offered. Decide
which school to attend based on a combination of
(a) how well the school suits your needs (programs
of study and academics) and (b) its affordability
after all aid is taken into account.
If you are selected for verification,
your school’s financial aid
office will ask you to submit tax
returns and other documents,
as appropriate. Be sure to meet
the school’s deadlines, or you will
not receive federal student aid.
Complete the FAFSA between
Jan.1, 2008 and June 30, 2009
(no exceptions to either date!).
BUT, apply as soon as possible
on or after Jan.1 to meet school
and state aid deadlines (see note
at bottom of page). Apply online
(the faster and easier way) by
going to www.fafsa.ed.gov.
Whether you’re selected for
verification or not, make
sure the financial aid office
at the school has all the
information needed to
determine your eligibility.
What is federal student aid?
Federal student aid is financial assistance through the U.S.
Department of Education available to eligible students enrolled in
an eligible programs* as regular students* at schools participating in
our federal student aid programs.
Federal student aid covers school expenses such as tuition and fees,
room and board, books and supplies and transportation. This aid can
also help you pay for a computer and dependent child-care expenses.
(Note that accepting any Title IV student financial aid does not
commit the student to military or other government service.)
Federal Student Aid At A Glance
Note: You also might be able to get financial aid from your state government, your school or a private scholarship. Research nonfederal
aid early (ideally, start in the spring of your junior year of high school). Be sure to meet all application deadlines!
Federal Student Aid at a Glance
How Do I Apply For Federal Student Aid?
PREPARE APPLY RECEIVE REPAY
The Guide xiii
There are three categories of federal student aid: grants, workstudy
and loans. (See chart on page xi for an overview of these
programs.) Check with your school to find out which programs
your school participates in.
Who gets federal student aid?
Eligibility for most federal student aid programs is based
on financial need and several other factors. Your eligibility is
determined by the information you provide on the FAFSA.
Basic eligibility requirements:| Demonstrate financial need (except for certain loans; see
pages 9 and 10).| Be a U.S. citizen or eligible noncitizen* (for most programs)
with a valid Social Security number (SSN).| Be working toward a degree or certificate in an eligible
program.*| Show, by one of the following means, that you’re
qualified to obtain a postsecondary education:
4 Have a high school diploma or a General
Educational Development (GED) certificate.*
4 Pass an approved ability-to-benefit* (ATB) test (if you
don’t have a diploma or GED, a school can administer a
test to determine whether you can benefit from the
education offered at that school).
4 Meet other standards that your state establishes
and that we have approved.
4 Complete a high school education in a homeschool
setting approved under state law.| Register (if you haven’t already) with the Selective
Service, if you’re a male between the ages of 18 and 25.| Maintain satisfactory academic progress* once in
school. (See the complete list of eligibility requirements
on pages 4 and 5.)
FAFSA4caster
If you’re not attending college this fall, but would like to find
out how much federal student aid you might be eligible for,
the FAFSA4caster is for you. This new product is for those who
want to get an early start on the financial aid process. You can
access FAFSA4caster at www.FederalStudentAid.ed.gov. For
more information on FAFSA4caster, see page 3.
The graphic at the lower left and right of each page provides a key to the primary topic
—based on the Prepare-Apply-Receive-Repay cycle—covered in the text on that page.
Federal Student Aid at a Glance
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
PREPARE APPLY RECEIVE REPAY
This guide gives you information
about federal student
aid programs, as well as
other means of paying for
your education after high
school. Take what we say to
heart … and then take the
next step.
This step is where many deserving
students falter, either
because they assume they
won’t qualify, or because the
FAFSA may seem complex
and difficult to complete.
In the case of the FAFSA, the
improved online version
streamlines the application
process considerably. It’s a
good idea to apply. You may
be surprised by the amount
of aid for which you qualify.
We will inform you and
your selected schools about
your Expected Family
Contribution (EFC). Then
they (or your student loan
provider) will tell you how
much—and what sorts of—
aid you qualify for.
If your aid is in the form
of a loan or loans, this guide
will fill you in on the repayment
process.
Process Summary Chart
PREPARE APPLY RECEIVE REPAY
What You Should Know
Before You Apply
A
O ur Federal Student Aid team is committed to making
sure that all eligible students can benefit from financial
assistance for education beyond high school. Congress
authorizes billions of taxpayer dollars for this purpose
every year.
The amount and type of federal aid we provide doesn’t
always depend solely on financial need. Once students
apply for aid, many are surprised by the amount of aid
they receive. So a good rule of thumb is: Don’t assume
you’re not eligible. Take the time to complete and submit
the Free Application for Federal Student Aid—the FAFSA
(more on that later).
The U.S. Department of Education, Federal Student Aid
offers a variety of student financial aid programs, which
are described in this guide along with other sources you can
turn to for financial help in completing your education.
Remember: the more you know about how to make
your ambitions real, the closer you are to fulfilling them.
It’s up to you to make it happen.
Education After High School
The Guide 1
Education beyond high school is a big investment of time, money
and eff ort. You’ll need to fi gure out how to pay for your education
but all the eff ort you put into it will be worth it. Over a working
life, a person with a bachelor’s degree will earn almost twice as
much as someone with just a high school diploma. More education
equates to higher earnings. Th is is most noticeable at higher
education levels (see statistics below). Th e more education you
have, the more you earn. So invest in your education; the payoff
lasts a lifetime.
*Year round full-time workers
Source: U.S. Census Bureau, Current Population Survey,
2006 Annual Social and Economic Supplement
Th e diff erence between income levels becomes even more
apparent in graph format.
Source: U.S. Census Bureau, Current Population Survey,
2006 Annual Social and Economic Supplement
Remember to carefully evaluate all relevant aspects of the
schools you’re considering. Just because a school participates
in our federal student aid programs doesn’t mean we’ve endorsed
the quality of education the school off ers. We don’t approve a
school’s curricula, policies or administrative practices, except
as they relate to how the school administers our federal student
aid programs.
When we refer to “school” in this guide,
we mean a two-year or four-year public
or private college or university, or a career
or trade school.
What questions should I ask when considering
a college or career school?| Does the school off er the courses and type
of program I want?| Do I meet the admissions requirements?| Does the school off er a high quality education?| Does the school participate in federal student
aid programs?| Does the school off er services I need and
activities I’m interested in?
Where can I fi nd this information?| Read the school’s catalog or introductory materials.| Talk with students who currently attend or attended
the school you’re considering to get their opinion of
the school.| Check the school’s Web site.| Visit the reference section of your local library.| Talk to high school counselors and your state higher
education agency. (See the section “State Higher
Education Agencies” on page 39 for a list of agencies
and their phone numbers.)| Check to see if any complaints about the school have
been fi led with the local Better Business Bureau or
the consumer protection division of the state attorney
general’s offi ce. Search for Better Business Bureau offi ces
at www.bbb.org.
You’re paying for a high-quality education. Make sure you get it.
A
PREPARE APPLY RECEIVE REPAY
$140,000
Income
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
H.S. A.A. B.A. M.A. Ph.D. Professional
Degree
Education Level
Earnings in 2005 by Educational Attainment of
the Population 25 Years and Over*
Education Level 2005 Annual Income (U.S. dollars)
High School Diploma $38,344
Associate Degree $47,159
Bachelor’s Degree $67,156
Master’s Degree $81,281
Ph.D. $107,808
Professional Degree $140,551
The Guide 2
Take the next steps.
Before enrolling, make appointments to visit the colleges or career
schools you’re considering. Bring a list of questions to ask school
representatives. Your education is a major investment, so find out
as much information as you can before you enroll.
What kind of information should I get from
a school?| Find out if the school participates in federal student
aid programs.| Ask about the school’s accreditation,* licensing and
campus security.| Find out the school’s loan default* rate (the percentage
of students who attended the school, took out federal
student loans and failed to repay their loans on time).
You might not be able to get aid from some of our
programs at a school that has a high default* rate.| Find out the school’s job placement rates (the percentage
of students who are placed in jobs relevant to their
courses of study).
If the school advertises its job placement rates, it must
also publish:| the most recent employment statistics,| graduation statistics, and| any other information necessary to back up
its claims.
This information must be made available at the time you apply
for admission to the school.
Make sure you get the information you need and check out all
of your options as you prepare for education after high school.
It’s never too early to get started pursuing a career, so don’t wait
until the last minute to get started! Know what to expect from
the schools you’re considering.
Find out about financial aid at the school.
You have the right to receive the following information
from the school:| The location, hours and counseling procedures
for the school’s financial aid office.| The financial aid assistance available, including
federal, state, local, private and institutional
financial aid programs.| The procedures and deadlines for submitting
applications for each available financial
aid program.| The school’s criteria for selecting financial
aid recipients.| The school’s process for determining your
financial need.| The school’s process for determining the type
and amount of assistance in your financial
aid package.*| The method and timing of financial aid payments
made to you.| The school’s basis for determining whether you’re
making satisfactory academic progress,* and what
happens if you’re not. (Whether you continue to
receive federal student aid depends, in part, on
whether you make satisfactory academic progress.*)| If you’re offered a Federal Work-Study job, the nature
of the job, the hours you must work, your duties, the
pay and the method and timing of payment to you.
Find out the school’s refund policy.
If you enroll but never begin classes, you should get most
of your money back. If you begin attending classes but leave
before completing your course work, you might be able to
get some of your money back.
Find out the school’s return-of-aid policy.
If you receive federal student aid from any program mentioned
in this publication (except for Federal Work-Study), and you
withdraw from school, some of that money might have to be
given back to the source by you or by your school. Even if you
don’t finish your course work, you’ll have to repay the loan funds
you received, minus any student loan funds your school has
returned to your lender.
Find out the school’s completion and
transfer-out rates.
If many students withdraw from a school, it might indicate
a problem with the school. A school is required to disclose to
current and prospective students the percentage of students
who complete the school’s programs and the percentage of
students who transfer out.
DID YOU KNOW …
You can create a FREE, personalized student
account folder at our Web site Student Aid on the
Web at www.FederalStudentAid.ed.gov. Just click
on the “MyFSA” icon at the “Students, Parents and
Counselors” option and follow the instructions.
Your personal account will allow you to do online
college and scholarship searches and populate your
FAFSA with information you enter for your account.
It’s entirely free.
What You Should Know Before You Apply
PREPARE APPLY RECEIVE REPAY
The Guide 3
FAFSA4caster
What is FAFSA4caster?
FAFSA4caster is an online tool to help students and families
prepare financially for college before officially applying for
federal student aid. It provides an estimate of federal student aid
eligibility by instantly calculating an estimated Expected Family
Contribution*—the indicator used to estimate a family’s or a
student’s ability to contribute toward the cost of an education after
high school. FAFSA4caster determines what type of federal aid
(grants, work-study and loans) the student is eligible to receive
and provides an estimated award amount for each.
Who should use FAFSA4caster?
FAFSA4caster is not just for high school juniors. Parents of
younger students can use it to receive early estimates, create
scenarios based on future earnings, and establish college savings
strategies. Students considering going back to college can also
use FAFSA4caster to get an idea of how much federal aid they may
qualify to receive.
The benefit of using FAFSA4caster goes beyond early estimates.
Some of the data entered in FAFSA4caster will populate FAFSA on
the Web when the student officially applies for federal student aid.
Note: To apply for aid, students must use FAFSA on the Web
at www.fafsa.ed.gov.
What are other benefits?
FAFSA4caster also:| Reduces the time it will take to complete the online application,
FAFSA on Web| Helps users become familiar with the student aid lifecycle| Conducts a data match with the Social Security Administration;
this gives students the opportunity to resolve issues
prior to applying for federal student aid. If a Social Security
number match fails, students will be notified to have the
issue resolved before officially applying for aid.| Automatically generates and e-mails the Federal Student
Aid PIN for the student to use when applying for federal
student aid at FAFSA on the Web.
How do I get started?
You can access FAFSA4caster at www.FederalStudentAid.ed.gov.
Remember that the Free Application for Federal Student Aid
(FAFSA) or FAFSA on the Web, the online version, is the application
used to apply for federal student aid. But if you’re not ready
to file the FAFSA, you can submit a FAFSA4caster to receive an
early estimate of your student aid eligibility. You’ll need:| Your Social Security number;| To create a password, used to secure data and allow you to
retrieve your saved or submitted FAFSA4caster;| To refer to your and your parents’, if you’re a dependent
student, W-2 forms, bank statements and business and
mortgage information; and| Your Alien Registration number (if not a U.S. citizen).
What information does FAFSA4caster provide?
When you submit your FAFSA4caster, you will be able to see what
college might cost depending on the type of school you plan to attend.
If you plan to attend school full-time at a four-year public school,
it shows the types of federal student aid that might help cover that
cost, listing your estimated award amount for the Federal Pell Grant
Program and providing examples of award packages showing in-state
and out-of-state costs. Finally, FAFSA4caster shows any estimated
financial need that remains after the estimated aid amounts and
EFC* are taken into account.
Reducing the Cost of Education
There are other options you might consider to lower the cost of
your education after high school. The following are a few ideas to
think about.
Lower-cost schools
If you’ll be working toward a bachelor’s degree, you might consider
starting at a two-year community college and then transferring
to a four-year school. Community colleges are usually less
expensive than four-year schools. (Some four-year schools that
are partially funded by local or state taxes can be less expensive as
well.) Because attending a community college allows you to live at
home, you can save money on room and board.
If you decide to start at a community college, make sure your
community college courses will transfer to your four-year college
and that they will count toward your bachelor’s degree. Many
community colleges have “articulation agreements” with four-year
colleges under which the coursework taken at the community
college transfers into the four-year degree program. Be sure to ask
about the types of articulation agreements the community college
has, with whom, and for what programs of study. Discuss any concerns
you have about transfer courses and credits with the college
registrar at the college you’re transferring to.
State Higher Education Agency
Contact your state Higher Education Agency (see page 39) about
any aid program or scholarship sponsored by your state.
A
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
PREPARE APPLY RECEIVE REPAY
The Guide 4
Work or volunteer opportunities
You can work part-time to pay part of your costs. Be sure your
work and school schedules don’t conflict and that you save enough
time for studying.
Tax breaks
Certain borrowers can take a tax deduction for the interest actually
paid on student loans. This benefit applies to all loans used to
pay for postsecondary education school expenses. The maximum
deduction is $2,500 a year.
Hope or Lifetime Learning tax credit
You or your parents might also qualify for one or both of these tax
credits. See page 15 for additional information about tax credits,
deductions and the Internal Revenue Service.
DID YOU KNOW …
Nearly half of all undergraduates or their parents
had their taxes reduced by an average of $600
by claiming education tax benefits under the Hope
and/or Lifetime Learning tax credits.
Am I Eligible?
Basic requirements
To receive aid from the federal student aid programs discussed
in this guide, you must meet certain criteria.
Financial need
Except for some loan programs, you must show that you have financial
need, according to our requirements. See “Financial Need
and Expected Family Contribution* (EFC)” on page 5.
Education requirements| You must demonstrate by one of the following means
that you are qualified to enroll in postsecondary education:
4 Have a high school diploma or a General Educational
Development (GED) certificate.*
4 Pass an approved ability-to-benefit* (ATB) test. If you
don’t have a diploma or GED, you can take an approved
ATB test to determine whether you can benefit from the
education offered at that school.
4 Meet other standards your state established and that we
have approved.
4 Complete a high school education in a homeschool setting
approved under state law.| You must be enrolled or accepted for enrollment as a regular
student* working toward a degree or certificate in an
eligible program*.| You must meet satisfactory academic progress* standards set
by the postsecondary school you are or will be attending.
You might be able to receive aid for correspondence or telecommunications
courses as long as they are part of a recognized
certificate or degree program.
Legal and other requirements| You must be a U.S. citizen or eligible noncitizen.*| You must have a valid Social Security number (SSN)
(unless you’re from the Republic of the Marshall Islands, the
Federated States of Micronesia or the Republic of Palau). If
you don’t have an SSN, you can find out more about applying
for one at www.ssa.gov or by calling 1-800-772-1213.
TTY users can call 1-800-325-0778.| When you apply for federal student aid you sign a statement
that certifies that you will use federal student aid for
educational purposes only. You also certify that you are
not in default* on a federal student loan and do not owe a
refund on a federal student grant (which could happen if
you withdraw from school, for example).| You must comply with Selective Service registration.* If
you’re a male aged 18 through 25 and you have not registered
you can, at the same time you complete your FAFSA,
give the Selective Service System permission to register
you by means of the FAFSA. You can also register online at
www.sss.gov or call 1-847-688-6888. TTY users can call
1-847-688-2567.
Drug Conviction?
Everyone must answer Question 31 on the FAFSA, “Have
you been convicted for the possession or sale of illegal drugs
for an offense that occurred while you were receiving federal
student aid (such as grants, loans, and work-study)?”| Generally, if you have been convicted for the possession or
sale of illegal drugs for an offense that occurred while you
were receiving federal student aid, you will be ineligible
for a period of time based on the type and number of
convictions. If you answer “Yes” to this question, it is very
important that you complete and submit the FAFSA to
determine your eligibility. If you are submitting a paper
FAFSA, you will be mailed a worksheet to assist you in determining
whether your conviction affects your eligibility
for federal student aid. If you are applying using FAFSA
on the Web at www.fafsa.ed.gov, you will be provided the
electronic version of the same worksheet during your online
session. If you need assistance or have any questions
on how to answer Question 31, call 1-800-4-FED-AID
(1-800-433-3243) for help from the Federal Student Aid
Information Center.
What You Should Know Before You Apply
PREPARE APPLY RECEIVE REPAY
The Guide 5
Even if you’re ineligible for federal student aid because of
a drug conviction, you should still complete the FAFSA
because most schools and states use FAFSA information to
award nonfederal aid.| You have limited eligibility for federal student aid while you’re
incarcerated. Generally, you’re only eligible for a Pell Grant
and then only if you’re NOT incarcerated in a federal or
state penal institution.
“Match” requirements
When you apply for federal student aid, we verify some of your information
with certain federal agencies, including the Social Security
Administration (for verification of Social Security numbers and
U.S. citizenship status) and the Department of Homeland Security
(to verify Alien Registration numbers). If the information doesn’t
match, the discrepancy must be resolved before you can receive federal
student aid. We also check your records against our database,
the National Student Loan Data System (NSLDS),* to verify that
you haven’t defaulted on your federal student loan, haven’t received
an overpayment on a federal grant or a Federal Perkins Loan and
haven’t borrowed more than the total limit allowed. We also check
your record against Veterans Affairs if you answer that you are a
male. Most males between the ages of 18 and 25 must register with
Selective Service in order to be eligible for federal student aid.
DID YOU KNOW …
Federal Student Aid issued $83 billion in aid in
2007 (plus another $32 billion in consolidation
loans). Ten million students in 6,200 postsecondary
institutions received these loans.
Financial need and Expected Family
Contribution (EFC)
Aid for most of our programs is awarded based on financial need
(except for unsubsidized Stafford Loans and PLUS Loans). See
pages 9–10.
The EFC is a measure of your family’s financial strength and indicates
how much of your and your family’s financial resources (for dependent
students) should be available to help pay for your education. The
EFC is calculated from the information you report on the FAFSA.
Your EFC is calculated according to a formula established by law.
Your family’s income (taxable and untaxed), assets and benefits
(for example, unemployment or Social Security) are considered in
determining your EFC. Your family size and the number of family
members who will be attending a college or career school are
also considered. Your EFC will appear on the Student Aid Report*
(SAR) you receive after you file your FAFSA.
To determine your financial need for federal student aid programs
(except for an unsubsidized Stafford Loan), your school subtracts the
Expected Family Contribution (EFC) from your cost of attendance.*
Determining Your Financial Need
We use your Expected Family Contribution*
(EFC) to determine your financial need:
Cost of Attendance*
– Expected Family Contribution (EFC)
= Financial Need
The school uses federal grants and other financial aid to meet
your financial need.
Because the EFC formula must be applied to each family’s financial
information, we cannot tell you here whether you will be eligible for
federal student aid or estimate how much aid you might receive. You
can use FAFSA4caster at www.FederalStudentAid.ed.gov to get an
estimate of your financial aid award. The information you submit with
FAFSA4caster can be used to populate your FAFSA on the Web when
you’re ready to apply for aid (see page 3). But remember, to find out
exactly what you will be eligible to receive, you must apply for financial
aid. If you want to see how the EFC formula works, you can get
detailed worksheets from our Web site at www.FederalStudentAid.
ed.gov/pubs. Click on the year under “The EFC Formula” or you can
call the Federal Student Aid Information Center at 1-800-4-FED-AID
(1-800-433-3243).
After you receive your SAR, you might also receive an award letter*
from the school(s) listed on your FAFSA, especially the school(s)
that offer you admission. Contact the financial aid office at the
school(s) that sent you an award letter* if you have questions
about your student financial aid award.
I think I have some special circumstances in
my family. Are these considered in determining
my financial needs?
The EFC formula is basically the same for all applicants, but there is
some flexibility. Your financial aid administrator* can adjust the cost
of attendance* or the information used to calculate your EFC to
take into account your special circumstances. These circumstances
could include your family’s unusual medical expenses, tuition
expenses or unemployment.
The financial aid administrator* must have compelling reasons to use
professional judgment to make adjustments because of special
circumstances. You will have to provide adequate documentation
to support any adjustments. The financial aid administrator’s*
decision as to whether you have special circumstances is final and
can’t be appealed to us.
A
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
PREPARE APPLY RECEIVE REPAY
The Guide 6
What Type of Federal Student Aid
Might I Get?
There are three types of federal student aid:| Grants—financial aid that doesn’t have to be repaid (unless,
for example, you withdraw from school and owe a refund).| Work-Study—allows you to earn money for your education.| Loans—allow you to borrow money for your education.
You must repay your loans, with interest.
Grants
There are four types of federal student aid grants:| Federal Pell Grant| Federal Supplemental Educational Opportunity Grant (FSEOG)| Academic Competitiveness Grant (ACG)| National Science and Mathematics Access to Retain Talent
Grant (National SMART Grant)
Unlike loans, grants are not repaid unless, for example, you are awarded
funds incorrectly or you withdraw from school prior to the planned
end of term. All federal grants are awarded to students with financial
need. The amount of your Federal Pell Grant depends on your cost of
attendance,* expected family contribution,* enrollment status (full or
part-time) and whether you attend for a full academic year* or less. To
receive a FSEOG, ACG, or National SMART Grant, you must first be
eligible and receive a Federal Pell Grant. The amount of your FSEOG,
ACG and National SMART Grant depends on your financial need (see
Financial Need and Expected Family Contribution (EFC) on page 5).
The College Cost Reduction and Access Act, enacted on Sept. 27,
2007, makes college more affordable for many students. For the
latest information, and to see how the new law affects federal
student aid grants, visit www.FederalStudentAid.ed.gov, click
on “Students, Parents and Counselors.” You’ll find the information
you need in the “Announcements” section.
What is a Federal Pell Grant?| Pell Grants are the foundation of federal student financial
aid, to which aid from other federal and nonfederal sources
might be added.| Pell Grants are generally awarded only to undergraduate
students—those who haven’t earned a bachelor’s or graduate
degree.| In some limited cases, however, you might receive a Pell
Grant if you’re enrolled in a postbaccalaureate teacher
certificate program.| Amounts can change yearly. The maximum award for the
2007–08 award year was $4,310.
What is a Federal Supplemental Educational
Opportunity Grant (FSEOG)?| FSEOGs are awarded to undergraduate students with exceptional
financial need—those with the lowest Expected
Family Contribution* (EFC) numbers.| Federal Pell Grant recipients receive priority for FSEOG awards.| FSEOG awards range from $100 to $4,000 a year. The amount
of the award is determined by your school’s financial aid office.
What’s the difference between Federal Pell Grants
and FSEOGs?
Federal Pell Grants:| If you’re eligible for a Pell Grant you’ll receive the full amount
you qualify for—each school participating in the program
receives enough funds each year from the U.S. Department of
Education to pay the Pell amounts for all its eligible students.| The amount of other student aid you might qualify for does
not affect the amount of your Pell Grant.
FSEOGs:| Unlike Pell Grants, the amount of FSEOGs you receive
depends not only on your financial need but also on the
amount of other aid you get and the availability of funds
at your school.| Receiving other aid might reduce the amount of your
FSEOG award.| Not all schools participate in the FSEOG Program.| The school’s financial aid office decides how to award
these funds.| Each school participating in the FSEOG Program receives
a certain amount of FSEOG funds each year from the U.S.
Department of Education, Federal Student Aid. When all
of those funds have been disbursed for that award year, no
more FSEOG awards can be made for that year.
Due to limited funds, it’s important to apply early to be considered for
these funds. Not everyone who qualifies for an FSEOG might get one.
What is an Academic Competitiveness Grant (ACG)?
This grant program began in the 2006–07 award year for fulltime
undergraduate students. The maximum award for a first
academic year* eligible undergraduate student is $750; the
maximum award for a second academic year* eligible undergraduate
student is $1,300.
ACG Requirements
To receive an ACG, a student must| receive a Federal Pell Grant during the same award year;| be a U.S. citizen;
What You Should Know Before You Apply
PREPARE APPLY RECEIVE REPAY
The Guide 7| be a first- or second-year full-time undergraduate student
in a degree program at a two-year or four-year degreegranting
institution;| have completed a rigorous secondary school program of
study; and| if a first-year student—have completed secondary
school after Jan. 1, 2006, or| if a second-year student—have completed secondary school
after Jan. 1, 2005, and have at least a 3.0 grade point average as
of the end of the first academic year of undergraduate study.
For a list of recognized rigorous programs of secondary
school study in your state visit
www.ed.gov/admins/finaid/about/ac-smart/state-programs.html
What is a National Science and Mathematics Access
to Retain Talent Grant (National SMART Grant)?
This grant program is for full-time undergraduate students who are enrolled
in the third or fourth academic year* of undergraduate study. The
award is for up to $4,000 for each of the third and fourth academic years.
National SMART Grant Requirements
To receive a National SMART Grant, a student must| receive a Federal Pell Grant during the same award year;| be a U.S. citizen;| be a full-time student in his or her third or fourth academic
year* of an undergraduate degree program;| be pursuing a major in physical, life, or computer sciences,
mathematics, technology, engineering or a critical foreign
language; and| have at least a 3.0 grade point average as of the end of the
second award year and continue to maintain a 3.0 GPA that
must be checked prior to the beginning of each payment
period (e.g., semester).
For a list of National SMART Grant eligible majors, visit
ifap.ed.gov/dpcletters/GEN0706.html
What is the difference between the ACG and the
National SMART Grant?| The ACG is for undergraduate students who are enrolled in
the first or second academic year* of an eligible program* in
any field, who have completed a rigorous secondary school
program of study, and who also have at least a 3.0 cumulative
GPA for the first academic year.*| The National SMART Grant is for undergraduate students
who are enrolled in the third or fourth academic year* of
an eligible program* and pursing an eligible major with at
least a 3.0 cumulative GPA. The student does not have to
complete a rigorous secondary school program of study to
be eligible for this grant.
Note: There are additional steps you need to take to ensure you’re
considered for an ACG. Students who fill out FAFSA on the Web
are asked questions particular to the ACG. If a student is a U.S.
citizen, eligible for a Federal Pell Grant, and within the age range
to have graduated from high school after Jan. 1, 2005, these questions
appear as additional screens during the application process.
The paper FAFSA does not contain these questions. Applicants
who file the paper FAFSA, are U.S. citizens, eligible for a Federal
Pell Grant and within the age range to have graduated from high
school after Jan. 1, 2005 will receive instructions on what to do
in their Student Aid Report* (SAR). The SAR tells the student to
use FAFSA on the Web or call the Federal Student Aid Information
Center (1-800-433-3243) to provide additional information.
Because of this extra step in the paper process, we urge students
to use FAFSA on the Web.
When you receive a SAR, remember to read the comments and
respond appropriately.
How much financial aid can I get?
Pell Grant| Pell Grant award amounts can change yearly, but Pell Grant
awards for the 2007–08 award year (July 1, 2007 to June 30,
2008) ranged from $400 to $4,310.| How much grant aid you get depends on:
4 Your EFC.
4 Your cost of attendance.*
4 Whether you’re a full-time or part-time student.
4 Whether you attend school for a full academic year* or less.| You may receive only one Pell Grant in an award year.| You may not receive Pell Grant funds from more than one
school at a time.
FSEOG| You can get between $100 and $4,000 an academic year,*
depending on:
4 When you apply.
4 Your financial need.
4 The funding level of the school you’re attending.
4 The policies of your school’s financial aid office.
ACG| Up to $750 for first academic year* students.| Up to $1,300 for second academic year* students.
National SMART Grant| Up to $4,000 for each of the third and fourth
academic years.
A
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
PREPARE APPLY RECEIVE REPAY
The Guide 8
How will I be paid?
Your school will:| Credit your grant funds to your school account;| Pay you directly (usually by check);| Combine these methods; or| With your permission, credit your bank account.
How often will I receive funds?| Schools must pay you at least once per term (semester,
trimester or quarter).| Schools that don’t use formally defined, traditional terms
(e.g., semester, quarter, etc.) must pay you at least twice per
academic year.*
Can I receive a grant if I’m enrolled less than half-time?
Yes, but only for the Federal Pell Grant and the FSEOG. However, you
will not receive as much as if you were enrolled full-time. You must
be enrolled full-time for the ACG and the National SMART Grant.
Work-Study
What is the Federal Work-Study (FWS) Program?
Under the FWS Program, you can work part-time to earn money for
your education. The FWS Program:| Provides part-time employment while you are enrolled in
school.| Helps pay your educational expenses.| Is available to undergraduate and graduate students.| Is available to full-time or part-time students.| Is administered by schools participating in the FWS Program.| Encourages community service work and work related to
your course of study, whenever possible.
What kinds of jobs are there?
The FWS Program provides jobs for students demonstrating
financial need. The program encourages community service work
and work related to the student’s course of study.
Are Federal Work-Study jobs on campus
or off campus?
Both. If you work on campus, you’ll usually work for your school. If
you work off campus, your employer will usually be a private nonprofit
organization or a public agency, and the work performed
must be in the public interest.
Some schools might have agreements with private for-profit employers
for FWS jobs. These jobs must be relevant to your course of
study (to the maximum extent possible). If you attend a proprietary
school (e.g., a for-profit institution), there may be further restrictions
on the types of jobs you can be assigned.
How much can I earn?
You’ll earn at least the current federal minimum wage. However, the
amount might be higher depending on the type of work you do
and the skills required for the position.
Your total FWS award depends on:| When you apply,| Your level of financial need, and| Your school’s funding level. (We provide a certain amount
of work-study funds; when all funds have been awarded, no
additional work-study awards can be made for that year.)
How will I be paid?| Undergraduate student—by the hour.| Graduate student—by the hour or by salary, depending on
the work you do.| Your school must pay you at least once a month.| Your school must pay you directly unless you request that
the school:
4 send your payments directly to your bank account, or
4 use the money to pay for your education-related institutional
charges such as tuition, fees and room and board.
Can I work as many hours as I want?
No. The amount you earn can’t exceed your total FWS award. When
assigning work hours, your employer or financial aid administrator
will consider your class schedule and your academic progress.
Loans
Student loans, unlike grants and work-study, are borrowed money that
must be repaid, with interest, just like car loans and mortgages. You cannot
have these loans canceled because you didn’t like the education you
received, didn’t get a job in your field of study or because you’re having
financial difficulty. Loans are legal obligations, so before you take out a
student loan, think about the amount you’ll have to repay over the years.
Your Federal Student Loans: Learn the Basics and Manage Your Debt
can help you learn more about federal student loan debt. You can
access this publication at www.FederalStudentAid.ed.gov.
Types of loans:| Federal Perkins Loans are:
4 Made through participating schools to undergraduate,
graduate and professional degree students.
What You Should Know Before You Apply
PREPARE APPLY RECEIVE REPAY
The College Cost Reduction and Access Act, enacted on Sept. 27,
2007, makes college more affordable for many students. For the latest
information, and to see how the new law affects federal student
loans visit www.FederalStudentAid.ed.gov, click on “Students,
Parents and Counselors.” You’ll find the information you need in
the “Announcements” section.
The Guide 9
4 Off ered by participating schools to students who
demonstrate fi nancial need.
4 Made to students enrolled full-time or part-time.
4 Repaid by you to your school.| Staff ord Loans are for undergraduate, graduate and
professional degree students. You must be enrolled as at
least a half-time* student to be eligible for a Staff ord Loan.
Th ere are two types of Staff ord Loans: subsidized and unsubsidized.
You must have fi nancial need to receive a subsidized
Staff ord Loan. Financial need is not a requirement to obtain an
unsubsidized Staff ord Loan. Th e U.S. Department of Education
will pay (subsidize) the interest that accrues on subsidized
Staff ord Loans during certain periods. Th ese loans are made
through one of two U.S. Department of Education programs:
A
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll fi nd a description of them under “Important Terms,” beginning on page 36.
PREPARE APPLY RECEIVE REPAY
William D. Ford Federal Direct Loan (Direct Loan) Program.
Loans made through this program are referred to as Direct
Loans. Eligible students and parents borrow directly from the
U.S. Department of Education at participating schools. Direct
Loans include subsidized and unsubsidized Direct Staff ord Loans
(also known as Direct Subsidized Loans and Direct Unsubsidized
Loans), Direct PLUS Loans, and Direct Consolidation Loans. You
repay these loans directly to us.
Federal Family Education Loan (FFEL) Program. Loans made
through this program are referred to as FFEL Loans. Private lenders
provide funds that are guaranteed by the federal government. FFEL
Loans include subsidized and unsubsidized FFEL Staff ord Loans,
FFEL PLUS Loans and FFEL Consolidation Loans. You repay these
loans to the bank or private lender that made you the loan.
Th e information in this guide was compiled in summer 2007. For any changes to the federal student aid programs since then, visit
www.FederalStudentAid.ed.gov and click on “Students, Parents and Counselors.” Any new information will appear in the “Announcements” section.
APPLY Y RECEIVE REPAY
Student Loan Comparison Chart
Loan Program Eligibility Award Amounts Interest Rates Lender/Length of Repayment
Federal Perkins
Loans
Undergraduate and
graduate students
Undergraduate—up to $4,000 a year
(maximum of $20,000 as an undergraduate)
Graduate—up to $6,000 a year (maximum
of $40,000, including undergraduate loans)
Amount actually received depends on fi nancial
need, amount of other aid, availability of
funds at school
5 percent Lender is your school
Repay your school or its agent
Up to 10 years to repay, depending on amount owed
FFEL Stafford
Loans (subsidized
and unsubsidized)
Undergraduate and
graduate students; must be
enrolled at least half-time*
Depends on grade level in school and
dependency status (see chart on page 11)
Financial need is required for subsidized
loans
Financial need not necessary for unsubsidized
loans
Fixed rate of 6.8 percent for loans fi rst
disbursed on or after July 1, 2006
The federal government pays interest
on subsidized loans during school and
certain other periods
The borrower pays all interest on
unsubsidized loans
Lender is a bank, credit union or other participating
private lender
Repay the loan holder or its agent
Between 10 and 25 years to repay, depending on
amount owed and type of repayment plan selected
Direct
Stafford Loans
(subsidized and
unsubsidized)
Same as above Same as above Same as above Lender is the U.S. Department of Education; repay
Department
Between 10 and 25 years to repay, depending on
amount owed and type of repayment plan selected
FFEL PLUS Loans Parents of dependent
undergraduate students
enrolled at least half-time*
(see dependency status)
Graduate or professional
degree students enrolled at
least half-time*
Borrower must not have
negative credit history
Student’s Cost of Attendance*
– Other aid student receives
= Maximum loan amount
Fixed rate at 8.5 percent for loans fi rst
disbursed on or after July 1, 2006;
borrower pays all interest
Same as for FFEL Stafford Loans above
Direct PLUS
Loans
Same as above Same as above Fixed rate at 7.9 percent for loans fi rst
disbursed on or after July 1, 2006;
borrower pays all interest
Same as for Direct Stafford Loans above, except
that the Income Contingent Repayment Plan is
not an option
The Guide 10| PLUS Loans (Direct or FFEL) are loans parents can obtain
to help pay the cost of education for their dependent undergraduate
children. In addition, graduate and professional
degree students may obtain PLUS Loans to help pay for their
own education.| Consolidation Loans (Direct or FFEL) allow student or
parent borrowers to combine multiple federal education
loans into one loan with one monthly payment. (See page
33 for more information on these loans.)
Whether you (or your parents) receive a Stafford
or PLUS Loan depends on which program the
school you attend participates in. Most schools
participate in one or the other, although some
schools participate in bot h.
It’s possible for you to receive both Direct and
FFEL Loans but you can’t receive the same type
of Direct or FFEL Loan for the same period of
enrollment at the same school. Some schools
use one loan program for Stafford Loans and
another loan program for PLUS Loans. For
example, a graduate or professional student
could receive a Direct Stafford Loan and a FFEL
PLUS Loan for the same period of enrollment
at the same school.
What are the differences in these loan programs?
The chart on page 9 shows basic loan comparisons. More information
is provided in this section. The Financial Aid Office at your
school can explain which programs are available to you.
How do I apply for a Perkins or Stafford Loan?
As with all federal student financial aid, you apply for a Perkins
or Stafford Loan by completing the FAFSA. A separate loan application
is not required. However, you’ll need to sign a promissory
note,* which is a binding legal contract that says you agree
to repay your loan according to the terms of the promissory
note.* Read this note carefully before signing it and save a copy
for your records.
DID YOU KNOW …
The value of a postsecondary education as a
credential for future employment and earnings is
expected to rise. About 90 percent of the fastestgrowing
jobs in the new knowledge-driven market
economy require some postsecondary education.
How much can I borrow?
Perkins Loans
The Student Loan Comparison Chart on page 9 shows the
maximum Perkins Loan funds you can receive, depending on
whether you’re an undergraduate, graduate or professional
degree student. However, the amount you can borrow might
be less than the maximum available.| Each school participating in the Federal Perkins Loan
program receives a certain amount of Perkins funds
each year from the U.S. Department of Education.| When all available funds for that award year have been
distributed, no more awards can be made for that year.| Submit your FAFSA early so you can be considered for
these funds.
Stafford Loans (Direct and FFEL)
The Maximum Annual Loan Limits Chart—Subsidized and
Unsubsidized Direct and FFEL Stafford Loans on page 11,
shows that your loan limits depend on:| What year you are in school.| Whether you are a dependent or independent student.
Subsidized Stafford Loan| Available to students who demonstrate financial need.| Eligible students can borrow a subsidized Stafford Loan to
cover some or all of their need.| For a subsidized loan, the U.S. Department of Education
pays the interest:
4 While you’re in school at least half-time.*
4 For the first six months after you leave school
(referred to as a “grace period”).
4 During a period of deferment (a postponement of
loan payments).
The amount of your subsidized loan cannot exceed your
financial need.
Unsubsidized Stafford Loan| Does not require students to demonstrate
financial need.| The U.S. Department of Education does not pay interest
on unsubsidized loans.
What You Should Know Before You Apply
PREPARE APPLY RECEIVE REPAY
The Guide 11
To determine the amount of your unsubsidized loan,
your school will use this equation:
Cost of Attendance*
– Federal Pell Grant (if eligible)
– Subsidized Staff ord Loan amount (if eligible)
– Any other fi nancial aid you receive
= Amount of unsubsidized loan you receive
(up to the annual maximum loan amount)
Depending on your fi nancial need, you may receive both
subsidized and unsubsidized loans for the same enrollment
period, but the total amount of these loans may not exceed
the annual loan limit.
For an unsubsidized loan:| You’re responsible for paying the interest that accrues on the
loan from the time the loan is disbursed until it’s paid in full.| You can pay the interest while you’re in school or during a
period of deferment or forbearance.| Or, you can allow the interest to accrue (accumulate) and
have the interest added to the principal* amount of your
loan. Th is is called capitalization. If you choose not to pay the
interest as it accrues and allow it to be capitalized,* this will
increase the total amount that you have to repay because you
will be charged interest on a higher principal* amount.
A
Other than interest, are there any fees or charges
required to get these loans?| Federal Perkins Loans—No.| Direct Loans—Yes, for all Direct Subsidized Loans and
Direct Unsubsidized Loans fi rst disbursed on or aft er July
1, 2007 and before July 1, 2008, the loan fee (also called
origination fee) is 2.5 percent.
Th e Direct PLUS loan fee is 4 percent for Direct PLUS
Loans made to both parent and graduate and professional
degree student borrowers.| FFEL Loans—Yes, you may be charged fees comparable to
the fees charged for Direct Loans. Contact your lender for
more information.
How will I be paid?
Perkins Loans:| Your school will either pay you directly (usually by
check) or credit your account.| Generally, you’ll receive the loan in at least two
payments during the academic year.*
Staff ord Loans:| In general, your school will disburse your loan in at least
two installments—there might be certain exceptions.| No installment will be greater than half the amount
of your loan.
Maximum Annual Loan Limits Chart (Aggregate Loan Limits)—Subsidized and Unsubsidized
Direct and FFEL Stafford Loans
Year
Dependent
Undergraduate Student
Independent Undergraduate Student Graduate and Professional Degree Student
First Year $3,500 $7,500 — No more than $3,500 of this amount
may be in subsidized loans.
$20,500 — No more than $8,500 of this amount
may be in subsidized loans.
Second Year $4,500 $8,500 — No more than $4,500 of this amount
may be in subsidized loans.
Third and beyond
(each year)
$5,500 $10,500 — No more than $5,500 of this amount
may be in subsidized loans.
Maximum Total
Debt from Stafford
Loans When
You Graduate
$23,000 $46,000 — No more than $23,000 of this amount
may be in subsidized loans.
$138,500 — No more than $65,500 of this amount may be in
subsidized loans. The graduate debt limit includes
Stafford Loans received for undergraduate study.
NOTE: Th e amounts shown in the chart above are the maximum amounts
that you may borrow for an academic year.* You might receive less than the
maximum if you receive other fi nancial aid that’s used to cover a portion of
your cost of attendance.* Th e maximum amount you may borrow will also
be less in certain situations, such as if you are an undergraduate student
enrolled in a program of study that is shorter than an academic year.* Your
school can refuse to certify your loan or can certify a loan for an amount less
than you would otherwise be eligible for if the school documents the reason
for its action and explains the reason to you in writing. Th e school’s decision
is fi nal and cannot be appealed to the U.S. Department of Education.
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll fi nd a description of them under “Important Terms,” beginning on page 36.
PREPARE APPLY RECEIVE REPAY
The Guide 12| If you’re a first-year undergraduate student and a firsttime
borrower, your first disbursement can’t be made until
30 days after the first day of your enrollment period.| If you’re a first-time borrower you must complete entrance
counseling before you receive your first loan disbursement.
Student loan money must first be used to pay for your tuition, fees
and room and board. If loan funds remain, you’ll receive them by
check or in cash, unless you give the school written permission to
hold the funds until later in the enrollment period.
DID YOU KNOW …
Our team is responsible for much more than processing
aid applications and issuing loans. Though these are significant
responsibilities in their own right, we also work
closely with 3,000 or more private lenders that participate
in our programs and more than 6,000 colleges and
vocational schools that administer our funds. Part of this
function is oversight: we’re charged with making sure
that they treat borrowers fairly and ethically.
Can I cancel my student loan if I change my mind,
even if I have signed the promissory note agreeing to
the terms of the loan?
Yes. Before your loan money is disbursed, you may cancel all or
part of your loan at any time by notifying your school. After your
loan is disbursed, you may cancel all or part of the loan within
certain timeframes. Your promissory note* and additional information
you receive from your school will explain the procedures
and timeframes for canceling your loan.
DID YOU KNOW …
Financial aid provided by the office of Federal Student
Aid is the largest source of postsecondary financial aid
in the nation, making up about 70 percent (in dollar
value) of all aid granted nationwide.
PLUS Loans
Parents of dependent students and students pursuing a graduate
or professional degree can borrow from the PLUS Loan program.
The terms and conditions applicable to parent PLUS Loans (made
to parents of dependent students) also apply to PLUS Loans made
to graduate and professional degree students. These terms and
conditions include: a requirement that the applicant not have an
adverse credit history; a repayment period that begins on the date
of the last disbursement of the loan; and a fixed interest rate of
8.5 percent for FFEL PLUS Loans and 7.9 percent for Direct PLUS
Loans. As with PLUS Loans made to parent borrowers, eligible
graduate and professional degree students may borrow under
the PLUS program up to their cost of attendance,* minus other
financial aid received.
Unlike parent PLUS applicants, graduate and professional degree
student PLUS applicants must file a FAFSA. In addition, graduate
and professional degree students must have their annual loan
maximum eligibility under the Stafford Loan program determined
by the school before they apply for a PLUS Loan.
How do parents and graduate and professional
degree students apply for a PLUS Loan?
Direct PLUS Loan:| The school must participate in the Direct Loan Program.| Complete a Direct PLUS Loan application and promissory
note* contained in a single form from the financial aid office
at the school.
FFEL PLUS Loan:| The school must participate in the FFEL Loan Program.| Complete a FFEL PLUS Loan application and promissory
note,* available from the school, lender or state guaranty
agency.* After the school completes its portion of the application,
it must be sent to a lender for evaluation.
Although not a requirement if the student will not be receiving
any other federal student aid, parents are encouraged to have their
dependent children submit a FAFSA so their children can receive
the maximum student financial aid they’re eligible for. Graduate
and professional degree students applying for a PLUS Loan are
required to submit a FAFSA.
What are the eligibility requirements for
PLUS Loans?
PLUS applicants must meet the general eligibility requirements
for federal student aid. If a parent is borrowing on behalf of a
dependent undergraduate student, the student must also meet
these general eligibility requirements. For example, the PLUS
applicant and the student must:| be a United States citizen or eligible noncitizen,*| not be in default* on a federal student loan, and| not owe a refund on a federal education grant.
Are there any other requirements?
A PLUS Loan applicant must not have an adverse credit history.
(A credit check will be conducted.) A PLUS Loan applicant who
has an adverse credit history still may be able to receive a loan by
documenting existing extenuating circumstances or by obtaining
an endorser who does not have an adverse credit history. An
endorser or co-signer is someone who agrees to repay the loan if
the borrower fails to do so.
What You Should Know Before You Apply
PREPARE APPLY RECEIVE REPAY
The Guide 13
Do we need to find a lender?
Direct PLUS Loan—No. The U.S. Department of Education is
the lender. Your school assists in administering the Direct Loan
Program by:| distributing the loan application,| processing the loan, and| disbursing the loan funds.
FFEL Program—Yes. You will need to find a participating lender.
Your school will give you the option of choosing a lender from its
preferred lender list. The preferred lender list is only a starting
place when shopping for financing.| Check the terms and fine print carefully. Not all students can
take advantage of all the benefits lenders advertise. Choose
the loan that offers the best upfront discounts, such as waiving
both origination and default fees, or other immediate
discounts. Benefits that are promised several years down the
road usually won’t help you if you consolidate your loans or
get into financial trouble.| Your school or the guaranty agency* that serves your state can
help you locate a participating lender.| For the address and telephone number of your state guaranty
agency,* contact the Federal Student Aid Information Center
at 1-800-4-FED-AID (1-800-433-3243).
How much can a parent or graduate and
professional degree student borrow under
the PLUS Loan program?
The maximum PLUS Loan amount that a parent or graduate and
professional degree student can borrow is the student’s cost of
attendance* minus any other financial aid the student receives.
If a parent obtains a PLUS Loan to help pay for a
dependent student’s education, who receives the
loan money—the parent or the student?| The school will first apply the PLUS Loan funds to the
student’s school account to pay for tuition, fees, room and
board and other school charges.| If any loan funds remain, they will be sent to the parent
borrower, unless the parent authorizes the school to hold
the funds or release them to the student.| Any remaining loan funds must be used for your
education expenses.
A
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
PREPARE APPLY RECEIVE REPAY
Stafford and PLUS Loan Summary| Undergraduate and graduate or professional degree students may receive Stafford Loans. Graduate and professional degree
students and parents of dependent undergraduate students may receive PLUS Loans.| You must be enrolled at least half-time* at an eligible school in a program leading to a degree or certificate.| Student loans are borrowed money that must be repaid, with interest, just like car loans and mortgages.| Student loans cannot be canceled because you didn’t get—or didn’t like—the education you paid for with the loans, didn’t
get a job in your field of study or because you’re having financial difficulty.| Loans are legal obligations, so think about the amount you’ll have to repay before you take out a loan.| The maximum Stafford Loan amount you can borrow each academic year* depends on your academic level in school and
whether you are a dependent or independent student.| Students who demonstrate financial need are eligible for a subsidized Stafford Loan to cover some or all of that need.| For students who are eligible for a subsidized Stafford Loan, the U.S. Department of Education pays the interest while you’re
in school at least half-time,* for the first six months after you leave school (your grace period) and during a deferment (a
postponement of loan payments).| Unsubsidized Stafford Loans do not require a student to have financial need. The borrower is responsible for paying all
interest on unsubsidized Stafford Loans.| If you need to find a participating lender, your school has a preferred-lender list. This list is only a starting place when looking
for financing. Check the terms and fine print carefully.
The Guide 14
Can a borrower cancel a PLUS Loan even after
signing the promissory note and agreeing to the
terms of the loan?
Yes. A borrower can cancel a PLUS Loan the same way that a
borrower would cancel a Perkins or Stafford Loan.
Other than interest, are there any fees or
charges to get a PLUS Loan?
Yes. There is a fee of up to 4 percent of the loan amount.
More Federal Student Aid Information
Most student financial aid comes from the U.S. Department of
Education grant, work-study and loan programs you read about
here. We award almost all aid based on need; your high school
grades and class ranking are not considered in this process.
If you still have questions about federal student aid programs
after reviewing this publication, you can:| Go online to our Web site at
www.FederalStudentAid.ed.gov
This site provides comprehensive, FREE information on the
student aid process, and it links to other student aid-related sites.| Call our Federal Student Aid Information Center at:
1-800-4-FED-AID (1-800-433-3243)
Other Financial Aid Sources
Financial aid office
Talk to the financial aid staff at each school you’re interested in
to find out about the school’s financial aid programs and the total
cost of attending that school.
State Higher Education Agency
Your state agency can give you important information about state
aid—including aid from the Leveraging Educational Assistance
Partnership (LEAP) Program, funded jointly by states and the U.S.
Department of Education. See the “State Higher Education Agencies”
section in this guide for your state contact information.
AmeriCorps
This program provides full-time educational awards in return
for community service work. You can work before, during or
after your postsecondary education, and you can use the funds
either to pay current educational expenses or to repay federal
student loans. For more information, contact:
Corporation for National Service
1201 New York Avenue, NW
Washington, DC 20525
1-800-942-2677 (TTY Number: 1-800-833-3722)
www.americorps.org
Robert C. Byrd Honors Scholarship Program
(Byrd Program)
To receive this scholarship, you must demonstrate outstanding
academic achievement and show promise of continued
academic excellence. For more information, call toll-free
1-800-4-FED-AID (1-800-433-3243) or visit
www.ed.gov/programs/iduesbyrd/index.html.
Public libraries and the Internet
These are excellent sources of information on state and private
sources of financial aid. When using either source, search using
keywords like “financial aid,” “student aid,” “scholarships,” etc.
Beware of scams and services that will search for financial aid money
for you for a fee. You should not have to pay for this information.
Businesses and labor organizations
Many companies, businesses and labor organizations have programs
to help employees or members and their families pay the
cost of postsecondary education. Ask if they have a scholarship
program and about the application process.
Organizations, foundations, etc.
Foundations, religious organizations, fraternities or sororities
and town or city clubs usually offer financial aid. Include in your
search community organizations and civic groups such as the
American Legion, YMCA, 4-H Club, Elks, Kiwanis, Jaycees and
the Girl or Boy Scouts. Organizations connected with your field of
interest can also be helpful. For example, the American Medical
Association and the American Bar Association are good sources
for students seeking to specialize in medicine and law.
U.S. Armed Forces
The Armed Forces offer financial aid for service members and
their families. For more information on recruitment incentives,
contact your local military recruiter or visit the U.S. Department
of Defense at www.todaysmilitary.com, click on “What You Get”
and then go to “College Help.”
U.S. Department of Veterans Affairs
If you (or your spouse) are a veteran or you’re the dependent
of a veteran, veterans’ educational benefits may be available.
Information is available at www.gibill.va.gov or call
1-888-GI-BILL-1 (1-888-442-4551).
What You Should Know Before You Apply
PREPARE APPLY RECEIVE REPAY
The Guide 15
Internal Revenue Service (IRS)
The IRS offers financial aid to certain taxpayers to help pay
higher education expenses. The IRS offers two federal income
tax credits (tax credits offer dollar-for-dollar reductions in your
final tax liability) for higher education expenses.| The Hope Tax Credit, worth up to $1,650 per student, is
available for first- and second-year students enrolled at
least half-time.*| The Lifetime Learning Tax Credit is a tax benefit equal to
20 percent of a family’s tuition expenses, up to $10,000, for
virtually any postsecondary education and training. This
applies to undergraduate, graduate and professional degree
schools and even for less than half-time* study.
For more information on the Hope and Lifetime Learning tax
credits, and other tax benefits for postsecondary students, go
to www.irs.gov. IRS Publication 970, Tax Benefits for Higher
Education, which explains these credits and other tax benefits,
is available online, or call 1-800-829-1040. TTY callers
should call 1-800-829-4059.
www.students.gov
This site provides access to government resources to help
you plan and pay for your education. Besides finding financial
aid information, you can use this Web site to file your
taxes, search for a job and take advantage of other government
services.
Remember, you can get FREE help in
finding financial aid from the sources
we’ve mentioned in this section. You can
also check with the colleges or career
schools you’ll be applying to. You don’t
have to pay for someone to help you.
It’s a Jungle Out There … Be Careful
Scholarship scams
What about scholarship search services?
Many private scholarship search services provide sources of
financial assistance. We do not evaluate those services. If you
decide to use a search service, check its reputation by contacting
the Better Business Bureau or a state attorney general’s office.
You can search for scholarships for free on our Web site at
www.FederalStudentAid.ed.gov.
How can I tell if these search services are scams?
Are there any signs I should look for?
Be careful when searching for information on student financial
aid. Estimates show that families lose millions of dollars every
year to scholarship fraud. The College Scholarship Fraud Prevention
Act protects against fraud in student financial assistance.
The Federal Trade Commission (FTC) cautions students to look
for these telltale lines:| “The scholarship is guaranteed or your money back.”| “You can’t get this information anywhere else.”| “I just need your credit card or bank account number to
hold this scholarship.”| “You’ve been selected by a ‘national foundation’ to receive
a scholarship.”| “You’re a finalist” in a contest you never entered.
Make sure the information you receive and offers for assistance
are legitimate. Don’t fall prey to fraud. To file a complaint
with the FTC, or for free information, call 1-877-FTC-HELP
(1-877-382-4357). The TTY number is 1-866-653-4261. Or
visit www.ftc.gov/scholarshipscams.
Identity theft
Besides scholarship scams, you need to be aware of identity theft.
What is identity theft?
Identity theft is a widespread and growing national problem for
everyone. This crime involves the theft of your personal information
such as your name, address, telephone number and Social
Security number. Identity thieves steal your personal information
and ruin your credit. These thieves often run up thousands of
dollars in credit card debt, just to name one problem, and the bills
are sent to you for payment. Your credit rating can be ruined. Even
though it’s not your fault, you’re the one who has to clean up the
damage, which can take months or even years to correct.
How can this happen?
Identity theft occurs when someone inappropriately obtains
personal identifying information about you, such as your Social
Security number or driver’s license number and uses that information
to obtain credit cards, loans (including student loans) or
merchandise and services in your name. Identity thieves usually
get this information from a personal computer that you used for
online banking or purchasing transactions. Sometimes just using a
cell phone or using your Social Security number for identification
can leave you at risk. Why? Each of these transactions requires that
you share personal information, such as your name, address and
phone number and your bank and credit card numbers. Occasionally,
this information falls into the wrong hands.
A
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
PREPARE APPLY RECEIVE REPAY
The Guide 16
What happens if someone steals my identity and
gets a student loan in my name?
For Staff ord Loans and PLUS Loans, this is considered false
certifi cation of loan eligibility and the loan might be discharged.
How can I avoid identity theft ?| Don’t throw credit card applications you don’t want
into the trash. Cut them into several pieces, or shred
them, so no one can retrieve them and apply for credit
in your name.| Safeguard your Social Security number at all times. You
generally have to provide it to your employer or your bank,
but if a business wants it, ask why it’s needed and how it will
be used before you give it out. Th ere probably is no legitimate
reason for any business to need your Social Security number.
Never give it or your driver’s license number to anyone who
calls you on the phone or contacts you online saying they
need this information to verify your identity.| Never give personal or fi nancial information over the
phone or the Internet unless you initiated the contact.| If you decide to apply for our federal student aid
programs over the Internet, do so at the Department
of Education’s www.fafsa.ed.gov, or through
www.FederalStudentAid.ed.gov which are offi cial
U.S. government Web sites that are protected from
unauthorized disclosure.| Aft er completing any online application, remember to log
off the computer system.| Review your fi nancial aid award documents and keep track
of the amount of student aid applied for and awarded.| Keep your Federal Student Aid PIN, your online student
identifi er, in a secure place and never give it to anyone.
Th ese are just a few steps you can take to protect yourself
from identity theft . For more information, contact the Federal
Trade Commission (FTC) at www.consumer.gov/idtheft , or
call 1-877-IDTHEFT (1-877-438-4338).
To report identity theft that aff ects your federal student aid,
call the U.S. Department of Education’s Offi ce of Inspector
General Hotline at 1-800-MISUSED (1-800-647-8733) or
go to www.ed.gov/misused.
DID YOU KNOW …
Identity theft is a growing problem. Typical ways a
student becomes a victim include leaving personal
information lying around the dorm room or failing to
shred credit card offers before throwing them away.
We at the U.S. Department of Education work hard to ensure
that information sent over our Web sites is secure. However,
students should do their part as well. Make sure you keep your
information safe.
PREPARE APPLY RECEIVE REPAY
What You Should Know Before You Apply
Notes:
To Do:
Questions:
The Guide 18
PREPARE APPLY RECEIVE REPAY
F or all the acronyms, it’s a pretty straightforward process
if you take the time to see it through. After all, millions of
students just like you apply successfully each year. So, go
ahead. Apply. The results may surprise and delight you.
We’ve set everything up so you can apply and check the
progress of your application online. (Although you can
still do it the conventional way if you choose.)
In the case of student loans, there are a few points we
should make up front. One, interest rates are far lower
than those for commercial loans because the federal
government subsidizes them. Repayment terms are
comfortable and in most instances you don’t begin to
repay until you leave school. And if you’re worried
about your credit history disqualifying you—don’t.
The amount of your aid does not depend on your past
history with creditors.
So … you can go for it, or you can hang back. The howto
is right here, but you have to supply the drive.
Start Here …
How Do I Apply?
B
Complete Your FAFSA.
Receive Your SAR.
The Guide 19
DID YOU KNOW …
Applying for federal student aid grants, loans
and work-study programs is FREE! Why pay a
third party for help with the FAFSA? Help in
completing the FAFSA is available from our
office for free and there are no fees of any
kind assessed by the government when you
submit a FAFSA.
Getting Your Federal Student Aid PIN
What is a Federal Student Aid PIN
and what is it used for?
Your PIN is an electronic access code that serves as your
personal identifier and can be used every year to electronically
apply for federal student aid and to access
your U.S. Department of Education records online.
Your PIN allows you to:| “Sign” your application electronically and
complete the student aid process completely
online—no paper is involved.| If you’re a dependent student and one of
your parents has a Federal Student Aid PIN,
he or she can sign the application electronically
online as well.| Make online corrections to your FAFSA.| Access your Student Aid Report* (SAR).| “Sign” a master promissory note* for a
federal student loan.| Access your federal student aid records
online, including your student loan history
information on NSLDS.*
DID YOU KNOW …
The Federal Student Aid PIN gives you access
to personal information and therefore should
be kept PRIVATE. You should not share your
PIN with anyone, even if that person is helping
you fill out the FAFSA. Counselors should not
offer to hold onto students’ PINs. If you are
concerned about forgetting your PIN you should
go to www.pin.ed.gov and change your PIN
to a number you will remember.
Note: If you opted to receive your PIN by e-mail, you should add
FederalStudentAidPIN@cpsemail.ed.gov to your e-mail address
book or “safe list” to help avoid delivery problems.
Should I get a PIN if I’m not applying online?
We encourage you to apply online because that process is much faster
and easier. The electronic application process has edits built into it that
dramatically reduces the chance for errors. That saves you time and
trouble. But, even if you don’t apply online, you can use a PIN later to:| Look up your processed FAFSA data online.| Make online corrections to your
application information.| Complete your subsequent FAFSAs online.
How and when should I get a PIN?
You, and your parents if you’re a dependent student, can apply for
a PIN anytime at www.pin.ed.gov.
How do I sign my application?
What if I don’t have a PIN?
If you’re in FAFSA on the Web, a separate screen will appear when
you select the option to apply for a PIN. You will be given the option
of instantly receiving your PIN online, having it e-mailed to you, or
having it sent to you via postal mail (7-10 days). If you choose to
have it displayed on the screen, you can sign your FAFSA right then
and there. If you choose to have your PIN sent by postal mail, you’ll
need to save your FAFSA on the Web and sign with your PIN when
you receive it. Or, you can print a “signature page” and mail it to the
address indicated on FAFSA on the Web.
You can also select the option to process the application without a
signature. If you select this option, you will be mailed a paper SAR*
that you must sign and mail back to us for processing. The process
can take two or more weeks. This option is not recommended
because it is the most time-consuming one.
Note: Initially, your PIN can be used only to sign your FAFSA. Your personal
data (Social Security Number, name, and date of birth) must successfully
match with the data the Social Security Administration has for
you before your PIN can be used for other federal student aid purposes,
such as signing a promissory note.* After your data successfully matches
with the Social Security Administration’s data you can use your PIN at
other federal student aid Web sites. Your SAR* will contain a comment
that lets you know whether your data successfully matched with the
Social Security Administration’s data or not. If your data does not match
you will receive a notice with information to help you resolve the issue.
I submitted my FAFSA but did not sign with a PIN.
Will I get one automatically?
Yes. If you did not apply for a PIN before submitting your FAFSA,
your personal data, such as your Social Security number, name,
and date of birth, will be matched with the Social Security Administration’s
data. If the match is successful, we’ll automatically send
you a PIN.
B
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
PREPARE APPLY RECEIVE REPAY
The Guide 20
What if I have questions about the PIN?
Go to www.pin.ed.gov or www.FederalStudentAid.ed.gov
Or, call the Federal Student Aid Information Center at
1-800-4-FED-AID (1-800-433-3243).
Can I get a PIN from the Federal Student Aid
Information Center?
No. You can only apply for a PIN online.
Safeguard Your PIN and Remember It!
www.pin.ed.gov| Your PIN is used to sign legally binding
documents electronically. It has the same
legal status as a written signature.| Don’t give your PIN to anyone—not even to
someone helping you fill out the FAFSA.| Remember your PIN! You’ll use this same
PIN for future online FAFSAs and the
many different actions regarding your
student aid records.
Completing the FAFSA
What information do I need to complete
a FAFSA accurately?| Your Social Security number and your parents’ numbers,
if you’re a dependent student.| 2007 W-2 forms and other records of money earned (by
you and by your parents, if you’re a dependent student).| Your 2007 Federal Income Tax Return (and that of your
spouse, if you’re married).| Your parents’ 2007 Federal Income Tax Return (if you’re
a dependent student).| Any foreign tax return or tax return from Puerto Rico.| Your 2007 untaxed income records—examples include
Social Security benefits, welfare benefits such as Temporary
Assistance to Needy Families (TANF) and veteran
benefits.| Your current bank statements, business and investment
mortgage information; business and farm records; and
stock, bond and other investment records.| Your alien registration number (if you are not a U.S.
citizen).
If possible, have the necessary 2007 income tax returns finished
so you can complete the FAFSA more easily and accurately. If
you apply before your tax return has been completed, you’ll have
a two-step application process.| Step 1—Apply and estimate your tax information on
your application.| Step 2—Make corrections later if your estimated income
or tax information was not accurate.
You cannot receive federal student aid unless all your information
is complete and accurate.
Read the FAFSA instructions very carefully. Pay
close attention to questions on income because
most errors occur in that area.
Process for new applicants
Apply between Jan. 1, 2008, and June 30, 2009. To determine your
eligibility for federal student financial assistance, you need to complete
the FAFSA. Although you might have to complete an additional
application in order to be considered for financial aid from your
state or the school you’re interested in attending, most states and
schools use FAFSA information to award nonfederal student aid.
Can I apply online?
Yes. You can complete the FAFSA online at www.fafsa.ed.gov.
Applying online is faster and easier than the paper FAFSA,
although you may still complete and submit the FAFSA in paper
form. A FAFSA on the Web Worksheet is available online at
www.fafsa.ed.gov or www.FederalStudentAid.ed.gov/pubs for you
to print and write down your information prior to completing the
online submission of the FAFSA. You can also obtain printed copies
of the worksheet by calling 1-800-4-FED-AID (1-800-433-3243) or
through your financial aid office.
Start Here ... How Do I Apply?
PREPARE APPLY RECEIVE REPAY
Applying Online| Go online to www.fafsa.ed.gov.| As an alternative, go online to
www.FederalStudentAid.ed.gov and click on the FAFSA
logo in the left column.| If you have created a “MyFSA” account at
www.FederalStudentAid.ed.gov, many sections of the
FAFSA will automatically be completed for you, saving
time and eliminating mistakes.| If you previously completed FAFSA4caster, you may choose
to have your FAFSA populated with the information you
already provided. If you complete FAFSA4caster and need
to apply for aid right away, just follow the instructions in
FAFSA4caster and finish the process of applying for aid.
The Guide 21
Why should I apply online?| As you go through the online application process, FAFSA
on the Web uses skip-logic so only questions that apply to
your situation appear on your screen. This makes the application
process shorter.| FAFSA on the Web identifies potential errors right away
and prompts you to make on-the-spot corrections.| You get online instructions for each question, and you can
access live online help with a customer service representative
for free if you have additional questions.| If you are a U.S. citizen, eligible for a Federal Pell Grant,
and within the age range to have graduated from high
school after Jan. 1, 2005, additional screens will appear to
help determine your eligibility for the ACG.| By applying online, you can send your application information
to up to ten schools (the paper form is limited to
four schools).| Once you submit your application, your information is
immediately sent to the U.S. Department of Education.
You’ll get a confirmation notice right away when you click
on “Submit My FAFSA Now.”| Your online application will be processed quickly, if you
(and your parents, if applicable) provided electronic
signatures using the PIN.
What if I decide I want a paper FAFSA?
You can get a paper FAFSA—in English or Spanish—
from our Federal Student Aid Information Center by calling
1-800-4-FED-AID (1-800-433-3243). A PDF of the application is
also available at www.fafsa.ed.gov.
Then what should I do?| Complete, sign and mail the FAFSA in the pre-addressed
envelope or send it to the address indicated in the PDF, if
you printed one. Your FAFSA will be processed in two to
three weeks. But, before mailing it, you should check to see
if your school, or a school that you’re interested in, would
submit your FAFSA for you electronically.| If you don’t hear anything within three weeks of the date
you submitted your application, check your status through
FAFSA on the Web (www.fafsa.ed.gov). You can also check
your status by contacting the Federal Student Aid Information
Center at 1-800-4-FED-AID (1-800-433-3243).
No paper or electronic FAFSA will be accepted
prior to Jan. 1, 2008. Any FAFSA received before
Jan. 1, 2008, will not be processed.
Dependency Status
You’ll need to determine whose information to report on the FAFSA—
if you’re an independent student; yours (and, if married, your
spouse’s), if you’re a dependent student; yours and your parents’.
When you apply for federal student aid, your answers to questions
on the FAFSA determine whether you are considered a dependent or
independent student.
Dependent students must report their parents’ income and
assets on the FAFSA as well as their own. Federal student aid programs
are based on the concept that a dependent student’s parents
have the primary responsibility for paying for their child’s education.
Dependency Status
For the 2008–09 academic year,* you’re an independent
student IF at least one of the following
applies to you:| You were born before Jan. 1, 1985.| You are or will be enrolled in a master’s
or doctoral degree program (beyond a
bachelor’s degree) at the beginning of the
2008–09 academic year*.| You’re married on the day you apply (even if
you are separated but not divorced).| You have children who receive more than half
their support from you.| You have dependents (other than your
children or spouse) who live with you and
who receive more than half their support
from you at the time you apply and through
June 30, 2009.| Both your parents are deceased, or you are (or
were until age 18) a ward or dependent of the
court.| You are currently serving on active duty in
the U.S. Armed Forces for purposes other
than training.| You’re a veteran of the U.S. Armed Forces.
(A “veteran” includes students who attended a
U.S. service academy and were released under
a condition other than dishonorable. For more
details on who is considered a veteran, see the
explanatory notes on the FAFSA.)
If none of these criteria apply to you, you’re a
dependent student.
B
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
PREPARE APPLY RECEIVE REPAY
The Guide 22
I am considered a dependent student; however,
I have no contact with my parents. What do I do
about reporting my parents’ income?
In unusual cases:| A financial aid administrator* can determine that a student
who doesn’t meet the above criteria should be treated
as an independent student.| The financial aid administrator* can change your dependency
status from dependent to independent based on
adequate documentation of your special circumstances.| You must provide this documentation to the financial
aid office at your school.| The financial aid administrator* cannot automatically
change your status simply because you request it.| The decision is based on the financial aid administrator’s*
judgment of the facts of your situation and is final.| You cannot appeal that decision to us.
Independent students report their own income and assets
(and those of a spouse, if married).
Not living with parents or not being claimed
by them on tax forms does not determine
dependency status for federal student aid.
If I am a dependent student, whose information
do I report if my parents are divorced or
separated?| You report information about the parent you lived with
for the greater amount of time during the 12 months
preceding the date you file your FAFSA application.| If you didn’t live with either parent, or if you lived
with each parent an equal amount of time, then use
information about the parent who provided the greater
amount of financial support during the 12 months
prior to the date you file your FAFSA application.| If you didn’t receive any parental financial support
during that time, you must report information about
the parent who most recently provided the greater
amount of parental support.
Do I report stepparents’ information?
Your stepparent’s financial information is required on the FAFSA:| If the parent you received financial support from was a
single parent who is now married, or| If the parent you received financial support from was
divorced or widowed but has remarried.
This does not mean your stepparent is obligated to give financial
assistance to you, but his or her income and assets represent
significant information about the family’s financial resources.
Including this information on the FAFSA helps us form an
accurate picture of your family’s total financial strength.
Do I need to fill out a FAFSA every year I apply for aid?
Yes. You must reapply for federal student aid every year. If you
change schools, your aid doesn’t automatically transfer with you.
Remember to check with your new school to find out what you
need to do to continue receiving financial aid.
For those who applied in 2007–08, there will be fewer questions
to answer for 2008–09 because your FAFSA for the new year
contains much of the information given in the 2007–08 application.
Only the information that has changed in the 2007–08 FAFSA
will have to be updated and a few new questions answered. You
can complete your FAFSA online at www.fafsa.ed.gov between
Jan. 1, 2008, and June 30, 2009. Remember that states and schools
may have earlier deadlines for nonfederal aid, so it’s important to
check your state or school deadlines. State contact information is
provided at the end of this guide.
To complete your FAFSA for subsequent years:| In January 2008, you’ll receive notice (by e-mail or regular
mail) reminding you to apply for the 2008–09 award year.
The 2008–09 award year is July 1, 2008 to June 30, 2009.| You will need your PIN to access your 2008–09 FAFSA on
the Web populated with your data. If you prefer to complete
a paper application, you will have to provide all your information
all over again.| Review the information on your FAFSA and change or add
information as needed, sign and submit it.| You’ll then receive your Student Aid Report* (SAR) containing
your application results.| Review your SAR to make sure all your information is correct.| Check with your financial aid office, or contact the Federal
Student Aid Information Center at 1-800-4-FED-AID
(1-800-433-3243) if you have questions about the FAFSA
process for subsequent years.
Start Here ... How Do I Apply?
PREPARE APPLY RECEIVE REPAY
The Guide 23
What if I need help filling out my FAFSA?| Help text is available and accessible for every question on
the FAFSA if you apply online using FAFSA on the Web at
www.fafsa.ed.gov. You can also get free live help online at
this Web site.| Free help is also available online at
www.FederalStudentAid.ed.gov/completefafsa.| Contact the Federal Student Aid Information Center
1-800-4-FED-AID (1-800-433-3243) for assistance with any
questions you have on either the paper or electronic FAFSA.| Contact your high school guidance counselor or your college
financial aid office.
Remember, you can get all the help you need
for FREE from one of these sources. NEVER
pay anyone for assistance in completing the
online or paper FAFSA.
How do the schools I’m interested in attending
get my FAFSA information?
You can list up to four schools on a paper FAFSA and up to ten
schools on FAFSA on the Web. Those schools will automatically
receive your FAFSA results electronically.
What if I want to add or change schools later?
Using your PIN, you can go to www.fafsa.ed.gov and select
“Add or Delete a School Code” to make changes online or
you can call the Federal Student Aid Information Center
1-800-4-FED-AID (1-800-433-3243). If you call, you’ll
need your Data Release Number (DRN), which is located
on your SAR.
Save all records and materials used to
complete your FAFSA. Make a copy of your
paper FAFSA or print a copy of your FAFSA
on the Web. You might need them later to
prove the information you reported was
accurate.
The process of documenting the information you
provided on the FAFSA is called verification. If
your application is selected for verification and
you do not provide the documents requested by
your school, you will not receive federal student
aid and you might not receive aid from other
nonfederal sources.
The Student Aid Report (SAR) and
Why It’s Important
Your Student Aid Report* (SAR) summarizes all the information
you provided on your FAFSA. Your SAR will usually contain
your Expected Family Contribution* (EFC), the number used in
determining your eligibility for federal student aid. Your EFC will
appear in the upper right-hand portion of a paper SAR or an
electronic SAR. You might not get an EFC if we need more
information from you to process your data. If you applied for a
PIN during the FAFSA on the Web signature process, you’ll
receive information about the status of your PIN.
After you apply for federal student aid you’ll
receive your FAFSA results in your SAR:| You will receive your SAR by e-mail 3-5 days after your
FAFSA has been processed, if you provided an e-mail
address when you applied. This e-mail will contain a secure
link so you can access your SAR online. If you have a “junk”
folder or “spam” folder in your e-mail files, check it. The
e-mail from us might be delivered there instead of your
inbox. We encourage you to add our e-mail address,
FederalStudentAidFAFSA@cpsemail.ed.gov, to your
e-mail address book to help avoid delivery problems.| You will receive a paper SAR by mail in 7-10 days after your
FAFSA has been processed, if you do not provide an e-mail
address when you apply. Whether you apply online or by
paper, we will automatically send your data electronically to the
schools you listed on your FAFSA.
If you applied using a paper FAFSA, there are additional steps you
need to take to ensure you’re considered for the ACG (see page 6). If
you’re a U.S. citizen, eligible for a Federal Pell Grant, and within the
age range to have graduated from high school after Jan. 1, 2005,
additional questions will be asked during the online application
process. The paper FAFSA does not contain these questions. Applicants
who file the paper FAFSA, are U.S. citizens, eligible for a
Federal Pell Grant and within the age range to have graduated from
high school after Jan. 1, 2005 will receive information on their SAR
explaining what to do. Please read the instructions carefully.
What do I do with my SAR?
Review it carefully to make sure it’s correct and complete. The
school(s) you’ve selected to receive your SAR will use this information
to determine if you’re eligible for federal—and possibly
nonfederal—financial aid funds.
If you need to make corrections to your SAR:| You can make them online using your PIN, by going to
www.fafsa.ed.gov and selecting “Make Corrections to a
Processed FAFSA.”
B
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
PREPARE APPLY RECEIVE REPAY
The Guide 24| Your school might be able to make them for you
electronically (check with your school).| Or, if you received a paper SAR, make any necessary
corrections on that SAR and mail it to the address on
the form for processing.
You can make a few changes to your SAR by calling the
Federal Student Aid Information Center at 1-800-4-FED-AID
(1-800-433-3243). You must have the Data Release Number
(DRN) located on the SAR available.
Here’s what you can change over the phone:| your mailing or e-mail address,| the names of schools that you want to receive your
FAFSA information; and| your answer to Question 31 (concerning a drug conviction).
For all other changes, you must correct your SAR using
one of the other options above.
Once my SAR is accurate and complete, how do I
fi nd out if I’m eligible for federal student aid and
how much I’ll receive?
If you’re eligible for federal student fi nancial aid, the school(s)
listed on your FAFSA (who have also off ered you admission) will
send you an award letter.* Th e award letter* tells you the type of
fi nancial aid you are eligible to receive and how much you may
receive. Th is combination of aid is your fi nancial aid package.*
Review each award letter* very carefully and compare how much aid
you can receive at each school. Once you accept a school’s award letter,*
sign it and return it to the school for processing.
SAR Submission Deadline
If the school you want to attend is not listed on
your SAR, you must add that school to your SAR
and submit your data to that school for processing
by the last day of enrollment in 2008–09 OR by
mid-September 2008, whichever comes fi rst. Be
sure you know what the last day of enrollment
is at the school(s) you want to attend—that date
could be earlier than mid-September.
PREPARE APPLY RECEIVE REPAY
Start Here ... How Do I Apply?
Notes:
To Do:
Questions:
Repaying Your Student Loan
The Guide 26
PREPARE APPLY RECEIVE REPAY
I f you’re a federal student loan recipient, there are two
key points to remember. First, the interest you pay
is lower than commercial rates because the federal
government subsidizes the rate. Second, if you are a
student borrower, you don’t have to begin to repay
your Perkins or Stafford Loans until you leave school
or drop below half-time.*
As generous as these terms are, you shouldn’t
forget that you do have to repay your loan. Failure
to do so could result in your loan(s) being declared
delinquent or in default.* This could have a
negative impact on your financial status and
creditworthiness in the future. This section outlines
repayment requirements and describes the rare
circumstances under which your obligation to repay
can be reduced or forgiven.
Repaying
Your Student Loan
C
What You Need to Know
as a Borrower
C
The Guide 27
Borrower’s Responsibilities
When you obtain a federal student loan you have certain
responsibilities. Here are some important ones:
Think about how much you’re borrowing| Think about what your repayment obligation means before
you take out a student loan.| If you don’t repay your student loan on time or according
to the terms in your promissory note,* you could default*
on this legal obligation, which has serious consequences
and will adversely affect your credit rating.
Signing a promissory note means you
agree to repay the loan| When you sign a promissory note,* you’re agreeing to
repay the loan according to the terms of the note.| The note states that except in cases of loan discharge
(cancellation), you must repay the loan, even if you don’t
complete your education (in some cases, you may not have
to repay a loan if you were unable to complete your education
because the school closed).| Also, you must repay your loan even if you can’t get a job
after you complete the program or you didn’t like the education
you received.
The U.S. Department of Education does not guarantee the
quality of education you receive or that you will find a job
in your field of study.
Make payments regardless of receiving
billing notices| You must make payments on your loan even if you don’t
receive a bill or repayment notice.| Billing statements (or coupon books) are sent to you as a
convenience. You’re obligated to make payments even if
you don’t receive any reminders.| You must also make monthly payments in the full amount
required by your repayment plan. Partial payments do not
fulfill your obligation to repay your student loan on time.
Continue to pay while waiting for deferment
or forbearance approval| If you apply for a deferment or forbearance, you must
continue to make payments until you have been notified
that your request has been approved.| If you don’t, you might end up in default.*| Keep a copy of any request form you submit, and document
all contact you have with the holder of your loan.
Notify your lender or loan servicing agency
when you …| graduate;| withdraw from school;| drop below half-time* status;| change your name, address or Social Security number†; or| transfer to another school.
† Note: New Social Security numbers are issued only in very rare
circumstances. See www.ssa.gov/ssnumber/ for rules on changing them.
Remember to keep in touch with your
lender or loan servicing agency.
Receive entrance and exit counseling| For Direct or FFEL Stafford Loans, you must complete an
entrance counseling session before you’re given your first
loan disbursement, unless you’ve previously borrowed a
Stafford Loan. This session provides you with useful tips
and tools to help you develop a budget for managing your
educational expenses and helps you to understand your
loan responsibilities.| For most federal student loans, you must receive exit
counseling before you leave school to make sure you understand
your rights and responsibilities as a borrower. You
will receive information about repayment and your loan
provider will notify you of the date loan repayment begins
(usually six months after you graduate, leave school or drop
below half-time* enrollment).
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
PREPARE APPLY RECEIVE REPAY
Repaying Your Student Loan
The Guide 28
Borrower’s Rights
What you need to know about your loan
You have a right to know the details about your loan (depending
on your loan, some of the following might be included as part
of your entrance counseling). Below is what you need to know
and must receive from your school, lender or the Direct Loan
Servicing Center:| The full amount of the loan and the current interest rate.| The date you must start repayment.| A complete list of any charges you must pay (loan fees)
and information on how those charges are collected.| Information about the yearly and total amounts you
can borrow.| Information about the maximum repayment periods and
the minimum repayment amount.| An explanation of default* and its consequences.| An explanation of available options for consolidating your
loans and a statement that you can prepay your student
loan(s) at any time without a penalty.
Before you leave school
Before you leave school, you will receive the following information
about your loan (as part of exit counseling) from your school, lender
or the Direct Loan Servicing Center:| A current description of your loans, including average
anticipated monthly payments.| The amount of your total debt (principal and estimated
interest), your current interest rate and the total interest
charges on your loan.| If you have FFEL Stafford Loans, the name of the lender or
agency that holds your loans, where to send your payments
and where to write or call if you have questions.| If you have Direct Stafford Loans, the address and telephone
number of the U.S. Department of Education’s
Direct Loan Servicing Center.| An explanation of the fees you might be charged during the
repayment period, such as late charges and collection or
litigation costs if you’re delinquent or in default.*| A reminder of available options for loan consolidation and
a reminder that you can prepay your loan without penalty
at any time.| A description of applicable deferment, forbearance and
discharge (cancellation) provisions.| Repayment options and advice about debt management
that will help you in making your payments.| Notification that you must provide your expected permanent
address and the name and address of your expected
employer.| Notification that you must also provide any corrections to
your school’s records concerning your name, Social Security
number, references and driver’s license number (if you
have one).
Grace period
If you are attending school at least half-time,* you have a set
period of time after you graduate, leave school or drop below
half-time* status before you must begin repayment on a Stafford
or Perkins Loan. This period of time is called a grace period.| You will receive a grace period before your repayment
period begins on a Stafford or Perkins Loan.| Parents and graduate and professional degree students do
not have a grace period on a PLUS Loan.| Your grace period will be six or nine months depending on
the type of loan.| If you are in active military duty for more than 30 days,
the grace period will be delayed (for no more than 3 years)
during that time.
Loan repayment schedule
Your school, lender or the Direct Loan Servicing Center,
as appropriate, must give you a loan repayment schedule
that states:| when your first payment is due,| the number and frequency of payments, and| the amount of each payment.
Sale of loan
If you, or your parents borrow under the FFEL Program, you
(or your parents, or graduate and professional degree students
for PLUS Loans) must be notified when the loan is sold if the
sale results in making payments to a new lender or agency. Both
the old and new lender must provide this notification. You must
be given:| the identity of the new lender or agency holding
the loan and| the address where you or your parents must send payments,
and the telephone numbers of both the old and new
lender or agency.
PREPARE APPLY RECEIVE REPAY
C
The Guide 29
Loan Repayment
This section gives you basic information on loan repayment. For more
information, go online to www.FederalStudentAid.ed.gov.
When do I start paying back my student loans?| Federal Perkins Loans—The grace period is nine months.
However, if you’re attending less than half-time,* check
with your financial aid office to determine your grace
period. During the grace period, you don’t have to pay any
principal, and you won’t be charged interest.| Direct or FFEL Stafford Loans—The grace period is six
months.
4 Subsidized loan—During the grace period, you don’t have
to pay any principal,* and you won’t be charged interest.
4 Unsubsidized loan—You don’t have to pay any principal,*
but you will be charged interest. Remember, you can either
pay the interest as you go along or it will be capitalized*
(i.e., added to the principal loan balance) later.
Your lender will send you information about repayment, and
you’ll be notified of the date repayment begins. However, you’re
responsible for beginning repayment on time, even if you
don’t receive this information. Failing to make payments on
your loan can lead to default.* Default* occurs when you fail to
meet the terms and conditions of the promissory note,* such
as not making timely payments on the loan.
How much time do I have to repay my
student loans?| Federal Perkins Loans—Up to 10 years.| Direct and FFEL Stafford Loans—Your repayment period
varies from 10 to 25 years, depending on which repayment
plan you choose. See more on repayment options later in
this section.
You’ll get more information about repayment choices before you
leave school (exit counseling), and later, during your grace period,
from your loan holder.
When do parents and graduate and professional
degree students begin repaying a PLUS Loan?
Generally, within 60 days after the loan is fully disbursed (paid out).
There is no grace period for these loans. This means interest starts
to accrue as soon as the first disbursement is made. Your parents
and graduate and professional degree students must begin repaying
both principal* and interest while in school. However, a graduate and
professional degree student PLUS Loan borrower is eligible for an inschool
deferment while he or she is enrolled at least half-time.*
How much will I have to repay and how often
do I make payments?
Direct or FFEL Stafford Loan—Usually, you’ll make monthly
payments. Your repayment amount will depend on:| the size of your debt,| the length of your repayment period, and| the repayment plan you choose.
Direct Stafford Loan:| You’ll make payments to us through our Direct Loan
Servicing Center. Direct Loan borrowers can view and pay
their bills online using their PIN at: www.dl.ed.gov
FFEL Stafford Loan:| You’ll repay the private lender that made you the loan.
Federal Perkins Loans:| You’ll make monthly payments to the school that loaned
you the money.| You’ll have up to 10 years to repay your loan.| Federal Perkins Loans do not have different repayment plans.
The chart on page 30 shows typical monthly payments and total
interest charges for three different 5 percent Perkins Loan
amounts over a 10-year period.
Do I have repayment options?
Yes. Repayment plans offered for Direct Stafford Loans are generally
the same as those offered for FFEL Stafford Loans. However, the
Direct Loan program offers an income contingent repayment plan
and the FFEL program offers an income-sensitive repayment plan.
The repayment periods for Stafford Loans vary from 10 to 25 years.
When it comes time to repay, you can pick a repayment plan that’s
best-suited to your financial situation. The following repayment
plans will be available to Direct and FFEL Stafford Loan borrowers
who started repaying their loans on or after July 1, 2006:| A standard plan with a fixed annual repayment amount
paid over a fixed period of time not to exceed 10 years.| A graduated plan paid over a fixed period of time not to
exceed 10 years. With this plan, your payments start with
a relatively low amount and then increase, generally every
two years. For FFEL, the borrower must have more than
$30,000 in outstanding FFEL loans.| An extended plan (for new borrowers on or after October 7,
1998, with more than $30,000 in outstanding Direct Loan
debt accumulated on or after that date) with a fixed annual
or graduated repayment amount to be paid over a period
not to exceed 25 years. For FFEL Loans, the borrower must
have more than $30,000 in outstanding loans.
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
PREPARE APPLY RECEIVE REPAY
Repaying Your Student Loan
The Guide 30
PREPARE APPLY RECEIVE REPAY| A plan that bases the monthly payment amount on how much
money you make, how much you owe and family size. For
Direct Staff ord Loans, this plan is called the Income Contingent
Repayment Plan (Direct PLUS Loans may not be repaid
under the Income-Contingent Repayment Plan). For FFEL
Staff ord Loans and FFEL PLUS Loans, this plan is called the
Income-Sensitive Repayment Plan. Th e terms under Income
Contingent and Income-Sensitive Repayments Plans vary.
Visit www.dl.ed.gov for more information for Direct Loan
Income Contingent Repayment Plans or your lender for more
information on FFEL Income-Sensitive Repayment Plans.| For Direct Loans, the U.S. Department of Education may off er
alternative repayment plans to a borrower who demonstrates
that other available repayment plans are not adequate and cannot
accommodate the borrower’s exceptional circumstances.
Key Facts About Repaying
Direct and FFEL Staff ord Loans| If you don’t choose a repayment plan when you
fi rst begin repayment, you’ll be placed under the
Standard Repayment Plan.| You can change plans to suit your fi nancial
circumstances.
For a Perkins Loan, your school is the lender. Your school or its agent
will provide you with the exact repayment amounts. Th e chart below
is just an example of what a Perkins Loan repayment plan might be.
Examples of Typical Perkins Loan Repayments
Total Loan Amount Number of Payments Approximate Monthly Payment Total Interest Charges Total Repaid
$4,000 120 $42.43 $1,091.01 $5,091.01
$5,000 120 $53.03 $1,364.03 $6,364.03
$15,000 120 $159.10 $4,091.73 $19,091.73
You’ll get more information about repayment choices before
you leave school and, later, from the holder of your loan. You
can also get more detail about repayment plans from our Web site,
www.FederalStudentAid.ed.gov. Th e following chart shows repayment
plans for both programs. Th is chart also shows estimated
monthly payments for various loan amounts under each plan.
How do parents or graduate and professional
degree students repay their PLUS Loan?
Your parents and graduate and professional degree students
have nearly all the repayment options that Direct and FFEL
Staff ord Loan borrowers have. Th e exception is that the Direct
Loan Income Contingent Repayment Plan is not an option for
Direct PLUS Loan borrowers.
Are there tax incentives while paying back
student loans?
Yes. Tax benefi ts are available for certain higher education expenses,
including a deduction for student loan interest for certain
borrowers. Th is benefi t applies to all loans used to pay for postsecondary
education costs, including PLUS Loans. Th e Internal
Revenue Service (IRS) Publication 970, Tax Benefi ts for Higher
Education, explains these credits and other tax benefi ts. You can
get more information online at www.irs.gov or by calling the IRS
at 1-800-829-1040. TTY callers can call 1-800-829-4059.
Th e results in the chart on the next page assume that the student
is making regular monthly payments on any unsubsidized loans
and is not capitalizing the interest while in school. If the interest
is capitalized,* (added to the outstanding principal balance) the
cumulative payments and total interest charges will be higher
than shown in the chart.
C
The Guide 31
PREPARE APPLY RECEIVE REPAY
Payments are calculated using the fi xed interest rate of 6.8 percent for
student borrowers for loans made on or aft er July 1, 2006.
a For a FFEL borrower, the requirement is that the borrower (1) must have had
no outstanding balance on a FFEL Program loan as of October 7, 1998, or on
the date the borrower obtained a FFEL Program loan on or aft er that date, and
(2) must have more than $30,000 in outstanding FFEL Program loans. For a
Direct Loan borrower, the requirement is that the borrower (1) must have had no
outstanding balance on a Direct Loan Program loan as of October 7, 1998, or on
the date the borrower obtained a Direct Loan Program loan on or aft er that date,
and (2) must have more than $30,000 in outstanding Direct Loan Program loans.
Th e amounts were rounded to the nearest dollar and were calculated based on a
25-year repayment plan.
b Th is is an estimated monthly repayment amount for the fi rst two years of
the term and total loan payment. Th e monthly repayment amount will
generally increase every two years, based on this plan.
c Assumes a 5 percent annual growth (Census Bureau) and amounts were
calculated using the formula requirements in eff ect during 2006.
d HOH is Head of Household. Assumes a family size of two.
Postponing Loan Repayment
(Deferment and Forbearance)
Under certain circumstances, you can receive periods of deferment
or forbearance that allow you to postpone loan repayment. Th ese
periods don’t count toward the length of time you have to repay
your loan. You can’t get a deferment or forbearance for a loan that
is already in default.*
What is deferment?
A deferment is a period of time during which no payments are
required and interest does not accrue (accumulate), unless you
have an unsubsidized Staff ord Loan. In that case, you must pay
the interest. To qualify for a deferment, you must meet specifi c
eligibility requirements.
How do I qualify for a deferment?
Th e most common loan deferment conditions are enrollment
in school at least half-time,* inability to fi nd full-time employment
(for up to three years) and economic hardship (for up to
three years).
Can parents or graduate and professional
degree students defer repayment of their PLUS Loan?
Yes, as long as the loan isn’t in default.* Generally, the same
deferment provisions that apply to Staff ord Loans apply to PLUS
Loans. Because PLUS Loans are unsubsidized, parents and
graduate and professional degree students will be charged
interest during periods of deferment. If they don’t pay the
interest as it accrues, it will be capitalized* (added to their
outstanding principal* balance). A parent PLUS loan borrower
may not receive a deferment based on the dependent student’s
half-time* enrollment, but graduate and professional PLUS borrowers
may defer repayment while enrolled at least half-time.*
Is there deferment for active military service?
An active duty military deferment is available for loans fi rst
disbursed on or aft er July 1, 2001. Th e deferment may not
exceed three years and is available only for periods when
the borrower is serving on active duty during a war or other
military operation, or national emergency or is performing
qualifying National Guard duty under the same circumstances.
Th erefore, not all active duty military personnel are
eligible for this deferment.
Examples of Typical Direct and FFEL Stafford Loan Repayments
Estimated Monthly Payments and Total Amounts Repaid Under Different Repayment Plans For Direct Loans Only: Income
Contingentc Income = $25,000
Initial Debt When You
Enter Repayment
Standard
Not to exceed 10 years
Extendeda
Graduatedb
Not to exceed 10 years
Single Married/HOHd
Per Month Total Repaid Per Month Total Repaid Per Month Total Repaid Per Month Total Repaid Per Month Total Repaid
$3,500 $50 $4,471
Not Available
$25 $5,157 $27 $6,092 $25 $6,405
$5,000 $58 $6,905 $40 $7,278 $38 $8,703 $36 $9,150
$7,500 $83 $10,357 $59 $10,919 $57 $13,055 $54 $13,725
$10,500 $121 $14,500 $83 $15,283 $80 $18,277 $76 $19,215
$15,000 $173 $20,714 $119 $21,834 $114 $26,110 $108 $27,451
$40,000 $460 $55,239 $227 $83,289 $316 $58,229 $253 $72,717 $197 $84,352
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll fi nd a description of them under “Important Terms,” beginning on page 36.
You can also fi nd a repayment calculator at www.FederalStudentAid.ed.gov.
Repaying Your Student Loan
The Guide 32
PREPARE APPLY RECEIVE REPAY
Documentation for this deferment may include a copy of military orders
or a written statement from the commanding offi cer or personnel
offi cer verifying that you are on active duty under these circumstances.
Th e Loan Deferment Summary Chart below shows Staff ord and
Perkins Loan deferments for loans disbursed on or aft er July 1,
1993. For information on deferments for loans received before that
date, Direct Staff ord and PLUS Loan borrowers should contact the
Direct Loan Servicing Center at 1-800-848-0979. TTY users should
call 1-800-848-0983. Or, go online at www.dl.ed.gov. FFEL Staff ord
and PLUS Loan borrowers should contact their lender.
For more information on deferments, contact your lender or
the fi nancial aid offi ce at your school.
What is forbearance?
If you temporarily can’t meet your repayment schedule but you’re
not eligible for a deferment, your lender might grant you forbearance
for a limited and specifi c period of time. Forbearance occurs
when your lender or loan-servicing agency agrees to either temporarily
reduce or postpone your student loan payments. Interest
continues to accrue (accumulate), however, and you are responsible
for paying it, no matter what kind of loan you have.
Generally, your lender can grant forbearance for periods up to
12 months at a time, for a maximum of three years. You’ll have
to provide documentation to the lender to show why you should be
granted forbearance. Th e lender must send you a notice confi rming
the terms that were agreed to and record them in your fi le.
Applying for deferment or forbearance
Receiving deferment or forbearance is not automatic.
You or your parents must apply for it.| Federal Perkins Loans—Contact the school that made
your loan or the school’s servicing agent.| Direct Loans (includes Direct PLUS Loans)—Contact
the Direct Loan Servicing Center at: 1-800-848-0979. TTY
users should call 1-800-848-0983 or go to: www.dl.ed.gov.| FFEL Loans (includes FFEL PLUS Loans)—Contact the
lender or agency holding your loan.
Regardless of which type of federal student loan you have,
you must pay the interest that accrues (accumulates) during
any period of forbearance.
Are there circumstances when I must be granted
a mandatory forbearance?
Yes. Th ere are certain mandatory forbearances. Examples include
borrowers who:| are in a medical or dental internship or residency;| have student loan payments that are 20 percent or more of
their monthly income;| have payments being made for them by the Department of
Defense.
Contact your lender or loan-servicing agent for more information
on the mandatory forbearance benefi t.
forbearancApplying Receiving deferment or forbearance is not automatic.
You or your parents must apply for it.|
Regardless of which type of federal student loan you have,
you
any period of forbearance.
a For PLUS Loans and unsubsidized Staff ord Loans, only principal* is deferred. Interest continues to accrue.
b A Direct Loan borrower who had an outstanding balance on a FFEL
Loan fi rst disbursed before July 1, 1993, when the borrower received his
or her fi rst Direct Loan, is eligible for additional deferments.
c Applies to loans fi rst disbursed on or aft er July 1, 1993, to a borrower who has
no outstanding FFEL or Federal Supplemental Loans for Students (Federal
SLS) loan on the date he or she signed the promissory note.* (Note that the
Federal SLS Program was repealed beginning with the 1994-95 award year.)
Diff erent deferments are available for borrowers with pre-July 1, 1993 loans.
d More information on teaching and other types of service deferments
and cancellations can be found online at www.FederalStudentAid.ed.gov.
At the site, click on “Students, Parents and Counselors.”
Loan Deferment Summary Chart
Stafford Loans
Perkins
Deferment Condition Loans
Direct
Loansa,b
FFEL
Loansa,c
At least half-time* study at a postsecondary school YES YES YES
Study in an approved graduate fellowship program
or in an approved rehabilitation training program for
the disabled
YES YES YESd
Unable to fi nd full-time employment Up to
3 Years
Up to
3 Years
Up to
3 Years
Economic hardship (includes Peace Corps Service) Up to
3 Years
Up to
3 Years
Up to
3 Years
Engages in service listed under discharge/cancellation
conditions NO NO YESd
Active Military Duty (for loans fi rst disbursed on/after
July 1, 2001; while borrower is on active duty during a
war or other military operation, or national emergency)
Up to 3
Years
Up to 3
Years
Up to 3
Years
Th e College Cost Reduction and Access Act, enacted on Sept. 27,
2007, makes college more aff ordable for many students. For the
latest information, and to see how the new law aff ects deferment
options, visit www.FederalStudentAid.ed.gov, click on
“Students, Parents and Counselors.” You’ll fi nd the information
you need in the “Announcements” section.
You MUST continue making payments on your student
loan until you have been notifi ed that your request
for deferment has been granted. If you don’t, and your
deferment is not approved, you will become delinquent
and may default* on your loan.
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PREPARE APPLY RECEIVE REPAY
Consolidating Your Loans
What is loan consolidation?
Student and parent borrowers can consolidate (combine) multiple
federal student loans with various repayment schedules into one
loan: either a FFEL Consolidation Loan or a Direct Consolidation
Loan, making a single monthly payment.
With a consolidation loan:| Your monthly payment might be lower.| You can take a longer time to repay (up to 30 years) if
you’re repaying your consolidation loan under the Standard
or Graduated Repayment Plans and your total student
loan debt is $60,000 or more. However, the maximum
repayment period for a consolidation loan is based on the
total amount of the Consolidation Loan and your other
student loan debt.| You will receive a fixed interest rate on your Direct or
FFEL Consolidation Loan.
Compare the cost of repaying your unconsolidated loans with
the cost of repaying a consolidation loan. Things to consider are:| Whether you’ll lose any borrower benefits if you consolidate,
such as interest rate discounts or principal* rebates, as
these benefits can significantly reduce the cost of repaying
your loans.| Whether you might lose some discharge and cancellation
benefits if you include a Perkins Loan in your consolidation
loan.
Carefully review your consolidation options before you apply.
Talk to the holder of your loan(s) for more information before
you consolidate.
If you’re in default* on a federal student loan, you still might be able
to consolidate if you make satisfactory repayment arrangements on
the defaulted loan or agree to repay the consolidation loan under the
Income-Contingent or Income-Sensitive Repayment Plans, provided
the defaulted loan is not subject to a judgment or wage garnishment.
What kinds of loans can be consolidated?
All federal student loans discussed in this guide are eligible for
consolidation, and others can be included. To get a complete list of
your loans that are eligible for consolidation, contact your lender
or the agent servicing your loan(s).
When can I consolidate my loans?
For both FFEL and Direct Loans you can consolidate:| During your grace period.| Once you’ve entered repayment (the day after the end of the
six-month grace period).| During periods of deferment or forbearance.
How do I get a consolidation loan and
where can I get more information?| FFEL Consolidation Loan—Contact the consolidation
department of a participating lender for an application
and more information. You may consolidate your loans
with any eligible consolidation lender in the FFEL program.| Direct Consolidation Loan—Contact the Direct Loan
Origination Center’s Consolidation Department at
1-800-557-7392, or go to www.loanconsolidation.ed.gov.
TTY users may call 1-800-557-7395.
What’s the interest rate on a consolidation loan?
The interest rate for both Direct and FFEL Consolidation Loans
is a fixed rate for the life of the loan. The fixed rate is based on
the weighted average of the interest rates on all of the loans you
consolidate, rounded up to the nearest one-eighth of 1 percent.
The interest rate will never exceed 8.25 percent.
Are there any disadvantages to getting
a consolidation loan?
Yes, there could be. For example, consolidation may significantly
increase the total cost of repaying your loans. Because you may
have a longer period of time to repay, you’ll pay more interest. You
might also lose some borrower benefits such as interest discounts
and rebates.
Once made, consolidation loans cannot be
revoked for any reason because the underlying
loans that were consolidated have been paid off
and no longer exist.
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
Repaying Your Student Loan
The Guide 34
PREPARE APPLY RECEIVE REPAY
Loan Discharge or Cancellation
Is it ever possible to have my federal student
loan discharged or canceled?
Yes, but only under rare circumstances. A discharge or
cancellation releases you from all obligation to repay the loan.
Your loan (Staff ord and PLUS) cannot be
discharged or canceled because you didn’t:| Complete the program of study at the school
(unless you could not complete the program
because the school closed),| like the school or program of study, or| obtain employment aft er completing the
program of study.
What qualifi es my loan for discharge?
Discharge refers to the cancellation of a loan, even one in
default,* due to school closure, false certifi cation, your death
or total and permanent disability.
What qualifi es my loan for cancellation?
Cancellation or sometimes “forgiveness” of a loan is based on the
borrower performing certain types of service such as teaching in
a low-income school. A defaulted* loan cannot be canceled based
on qualifying service (e.g. teaching).
For a complete list of discharge and cancellation provisions for Perkins
Loans and Staff ord Loans, check the following two charts: Perkins
Loan Discharge and Cancellation Summary (this page) and Staff ord
and PLUS Loan Discharge and Cancellation Summary (page 35).
How do I fi nd out if I can get a discharge
or cancellation?
Aft er reviewing the conditions, if you think you qualify, you must
apply to the holder of your loan.| Federal Perkins Loans—Check with the school that made
you the loan or with the school’s loan servicing agent.| Direct Staff ord Loans—Contact the Direct Loan Servicing
Center at 1-800-848-0979. TTY users can call
1-800-848-0983. Or, go to www.dl.ed.gov.| FFEL Staff ord Loans—Contact your lender or its loan
servicing agent.
Perkins Loan Discharge and
Cancellation Summary Chart
Cancellation Conditionsa Amount Forgiven
Bankruptcy (in rare cases—cancellation is possible only if
the bankruptcy court rules that repayment would cause
undue hardship)
100 percent
Closed school (before student could complete program of study)—
applies to loans received on or after Jan. 1, 1986
100 percent
Borrower’s total and permanent disability or deathb 100 percent
Full-time teacher in a designated elementary or secondary
school serving students from low-income familiesc Up to 100 percent
Full-time special education teacher (includes teaching
children with disabilities in a public or other nonprofi t
elementary or secondary school)c
Up to 100 percent
Full-time qualifi ed professional provider of early intervention
services for the disabled
Up to 100 percent
Full-time teacher of math, science, foreign languages, bilingual
education, or other fi elds designated as teacher shortage areas
Up to 100 percent
Full-time employee of a public or nonprofi t child- or familyservices
agency providing services to high-risk children and their
families from low-income communities
Up to 100 percent
Full-time nurse or medical technician Up to 100 percent
Full-time law enforcement or corrections offi cer Up to 100 percent
Full-time staff member in the education component of a Head
Start Program
Up to 100 percent
Vista or Peace Corps volunteer Up to 70 percent
Service in the U.S. Armed Forces
Up to 50 percent in areas of
hostilities or imminent danger
a As of Oct. 7, 1998, all Perkins Loan borrowers are eligible for all cancellation
benefi ts regardless of when the loan was made or the terms of the borrower’s
promissory note.* However, this benefi t is not retroactive to services performed
before Oct. 7, 1998.
b Total and permanent disability is defi ned as the inability to work and earn
money because of an illness or injury that is expected to continue indefi nitely
or to result in death. If you are determined to be totally and permanently
disabled based on a physician’s certifi cation, your loan will be conditionally
discharged for up to three years. Th is conditional discharge period begins on
the date you became totally and permanently disabled, as certifi ed by your
physician. During this conditional discharge period, you do not have to make
payments on your loan(s). To qualify for a fi nal discharge due to total and
permanent disability, you must meet the following requirements during the
conditional discharge period: (1) your earnings from employment must not
exceed the poverty line amount for a family of two; and (2) you must not
receive any additional loans under the FFEL, Direct Loan or Perkins Loan
programs. If you do not continue to meet these requirements at any time during
or at the end of the conditional discharge period, your loan(s) will be taken
out of conditional discharge status and you must resume making payments
on your loans. You cannot qualify for loan discharge based on a condition that
existed before the loan was made, unless a doctor certifi es that your condition
substantially deteriorated aft er you obtained the loan. For more information
on qualifying for this discharge, review your promissory note* and Borrower’s
Rights and Responsibilities Statement or contact your loan holder.
c Detailed information on teaching service cancellation/deferment options
can be found at www.FederalStudentAid.ed.gov. At the site, click on
“Students, Parents and Counselors.”
C
The Guide 35
PREPARE APPLY RECEIVE REPAY
*See “Important Terms,” page 36.
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll fi nd a description of them under “Important Terms,” beginning on page 36.
† Total and permanent disability is defi ned as the inability to work and earn
money because of an illness or injury that is expected to continue indefi nitely
or to result in death. If you are determined to be totally and permanently
disabled based on a physician’s certifi cation, your loan will be conditionally
discharged for up to three years. Th is conditional discharge period begins on
the date you became totally and permanently disabled, as certifi ed by your
physician. During this conditional discharge period, you do not have to make
payments on your loan(s). To qualify for a fi nal discharge due to total and
permanent disability, you must meet the following requirements during the
conditional discharge period: (1) your earnings from employment must not
exceed the poverty line amount for a family of two; and (2) you must not
receive any additional loans under the FFEL, Direct Loan or Perkins Loan
programs. If you do not continue to meet these requirements at any time during
or at the end of the conditional discharge period, your loan(s) will be taken
out of conditional discharge status and you must resume making payments
on your loans. You cannot qualify for loan discharge based on a condition that
existed before the loan was made, unless a doctor certifi es that your condition
substantially deteriorated aft er you obtained the loan. For more information
on qualifying for this discharge, review your promissory note* and Borrower’s
Rights and Responsibilities Statement or contact your loan holder.
† Total and permanent disability is defi ned as the inability to work and earn
Stafford and PLUS Loan Discharge
and Cancellation Summary Chart
Discharge/
Forgiveness
Condition
Amount
Discharged/
Forgiven
Notes
Borrower’s total
and permanent
disability or death.†
100 percent For a PLUS Loan, includes the death,
but not disability, of the student for
whom the parents borrowed.
Full-time
teacher for fi ve
consecutive years
in a designated
elementary or
secondary school
serving students
from low-income
families. Must meet
additional eligibility
requirements.
Up to $5,000 (up to $17,500
for teachers in certain
specialties) of the total loan
amount outstanding after
completion of the fi fth year
of teaching.
Under the Direct and FFEL
Consolidation Loan programs,
only the portion of
the consolidation loan used
to repay eligible Direct Loans
or FFEL Loans qualifi es for
loan forgiveness.
For Direct and FFEL Stafford Loan borrowers
with no outstanding balance
on a Direct or FFEL Loan on the date
they received a loan. PLUS Loans are
not eligible. At least one of the fi ve
consecutive years of teaching must occur
after the 1997-98 academic year.*
To fi nd out whether your school is
considered a low-income school, go to
www.FederalStudentAid.ed.gov.
Click on “Students, Parents and Counselors,”
or call
1-800-4-FED-AID (1-800-433-3243).
Bankruptcy
(in rare cases).
100 percent Cancellation is possible only if the
bankruptcy court rules that repayment
would cause undue hardship.
Closed school (before
student could
complete program
of study) or false
loan certifi cation.
100 percent For loans received on or after
January 1, 1986.
False loan certifi cation
now includes
identity theft.
100 percent Effective July 1, 2006.
School does not
make required
return of loan funds
to the lender.
Up to the amount that
the school was required
to return.
For loans received on or after
January 1, 1986.
Repaying Your Student Loan
The Guide 36
PREPARE APPLY RECEIVE REPAY
Important Terms
Ability-to-Benefit
One of the criteria used to establish student eligibility in order to receive Title IV
program assistance is that a student must have earned a high school diploma or its
equivalent. Students who are not high school graduates (or who have not earned a
General Educational Development [GED] Certificate*) can demonstrate that they have
the “ability to benefit” from the education or training being offered by passing an
approved ability-to-benefit (ATB) test.
Academic Year
A period of time schools use to measure a quantity of study. For example, a school’s
academic year may consist of a fall and spring semester during which a full-time
undergraduate student must complete 24 semester hours. Academic years vary from
school to school and even from educational program to educational program at the
same school.
Accreditation
The school must have accreditation from an accrediting body recognized by the U.S.
Department of Education to be eligible to participate in the administration of federal
student aid programs. Accreditation means that the school meets certain minimum
academic standards, as defined by the accrediting body.
Award Letter
An award letter from a school states the type and amount of financial aid the school is
willing to provide if you accept admission and register to take classes at that school.
Capitalized
With certain loans, such as subsidized Direct and FFEL Loans, the U.S. Department of
Education pays the interest that accrues on these loans while the student is enrolled at
least half-time* and during periods of deferment. However, with subsidized loans in
forbearance, unsubsidized loans or PLUS Loans, the student or the student’s parents
are responsible for paying interest as it accrues on these loans. When the interest is not
paid, it is capitalized or added to the principal* balance, which increases the outstanding
principal* amount due on this loan. Interest that is capitalized and, therefore, has
been added to the original amount of the loan subsequently accrues interest, adding an
additional expense to the loan.
Cost of Attendance (COA)
The total amount it will cost you to go to school—usually expressed as a yearly figure.
It’s determined using rules established by law. The COA includes tuition and fees; oncampus
room and board (or a housing and food allowance for off-campus students);
and allowances for books, supplies, transportation, loan fees, and, if applicable, dependent
care. It also includes miscellaneous and personal expenses, including an allowance
for the rental or purchase of a personal computer. Costs related to a disability are also
covered. The COA includes reasonable costs for eligible study-abroad programs as well.
For students attending less than half-time,* the COA includes tuition and fees and an
allowance for books, supplies, transportation and dependent care expenses; and can
also include room and board for up to three semesters or the equivalent at the institution.
But no more than two of those semesters, or the equivalent, may be consecutive.
Talk to the financial aid administrator at the school you’re planning to attend if you
have any unusual expenses that might affect your cost of attendance.
The Guide 37
Default
Failure to repay a loan according to the terms agreed to when you signed a promissory
note.* For the FFEL and Direct Loan programs, default is more specific—it
occurs if you fail to make a payment for 270 days if you repay monthly (or 330 days
if your payments are due less frequently). The consequences of default are severe.
Your school, the lender or agency that holds your loan, the state and the federal
government may all take action to recover the money, including notifying national
credit bureaus of your default. This may affect your credit rating for as long as seven
years. For example, you might find it difficult to borrow money from a bank to buy
a car or a house. In addition, the Internal Revenue Service can withhold your U.S.
individual income tax refund and apply it to the amount you owe, or the agency
holding your loan might ask your employer to deduct payments from your paycheck.
Also, you may be liable for loan collection expenses. If you return to school, you’re
not entitled to receive additional federal student financial aid. Legal action also
might be taken against you. In many cases, default can be avoided by submitting a
request for a deferment, forbearance, discharge or cancellation and by providing the
required documentation.
Eligible Noncitizen
You must be one of the following to receive federal student aid:| U.S. citizen| U.S. national (includes natives of American Samoa or Swain’s Island)| U.S. permanent resident who has an I-151, I-551, or I-551C (Permanent
Resident Card)
If you’re not in one of these categories, you must have an Arrival-Departure Record
(I-94) from U.S. Citizenship and Immigration Services (USCIS) showing one of the
following designations:| “Refugee”| “Asylum Granted”| “Cuban-Haitian Entrant, Status Pending”| “Conditional Entrant” (valid only if issued before April 1, 1980)| Victims of human trafficking, T-visa (T-2, T-3, or T-4, etc.) holder| “Parolee” (You must be paroled into the United States for at least one year
and you must be able to provide evidence from the USCIS that you are in
the United States for other than a temporary purpose and that you intend to
become a U.S. citizen or permanent resident.)
If you have only a Notice of Approval to Apply for Permanent Residence (I-171 or I-464),
you’re not eligible for federal student financial aid.
If you’re in the United States on certain visas, including an F1 or F2 student visa, or a J1
or J2 exchange visitor visa, you’re not eligible for federal student financial aid.
Also, people with G series visas (pertaining to international organizations) are not eligible
for federal student financial aid. For more information about other types of visas that
are not acceptable, check with your school’s financial aid office. Citizens and eligible
noncitizens may receive loans from the FFEL Program at participating foreign schools.
Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, and
the Republic of Palau are eligible only for certain types of federal student aid. These
applicants should check with their schools’ financial aid office for more information.
Eligible Program
A program of organized instruction or study that leads to an academic, professional
or vocational degree or certificate, or other recognized educational credential. To
receive federal student financial aid, you must be enrolled in an eligible program,
with two exceptions:| If a school has told you that you must take certain course work to qualify for
admission into one of its eligible programs, you can get a Stafford Loan for
up to 12 consecutive months while you’re completing that preparatory course
work. You must be enrolled at least half-time*, and you must meet the usual
federal student financial aid eligibility requirements.| If you’re enrolled at least half-time* in a program to obtain a professional
credential or certification required by a state for employment as an elementary
or secondary school teacher, you can get a Federal Perkins Loan, Federal
Work-Study, a Stafford Loan, or your parents can get a PLUS Loan, while
you’re enrolled in that program.
Expected Family Contribution
Your Expected Family Contribution (EFC) is the number that’s used to determine
your eligibility for federal student financial aid. This number results from the financial
information you provided in your FAFSA application. Your EFC is reported to you on
your Student Aid Report* (SAR).
Financial Aid Administrator (FAA)
An individual who works at a college or career school and is responsible for preparing
and communicating information on student loans, grants or scholarships and employment
programs. The FAA and staff help students apply for and receive student aid. The
FAA is also capable of analyzing student needs and making professional judgment
changes when necessary.
Financial Aid Package
The total amount of financial aid (federal and nonfederal) a student is offered by
the school. The financial aid administrator* at a postsecondary institution combines
various forms of aid into a “package” to help meet a student’s education costs. Using
available resources to give each student the best possible package of aid is one of the
aid administrator’s major responsibilities. Because funds are often limited, an aid
package might fall short of the amount a student needs to cover the full cost of
attendance.* Also, the amount of federal student aid in a package is affected by other
sources of aid received (scholarships, state aid, etc.).
General Educational Development (GED) Certificate
This is a certificate students receive if they’ve passed a specific, approved high school
equivalency test. Students who have a GED may still qualify for federal student aid. A
school that admits students without a high school diploma must make available a GED
program in the vicinity of the school and must inform students about the program.
Guaranty Agency
The guaranty agency is an organization that administers the Federal Family Education Loan
(FFEL) Program in your state. This agency can give you information on FFEL Loans. For the
name, address and telephone number of the agency serving your state, you can contact the
Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).
Half-time
At schools measuring progress in credit hours and semesters, trimesters, or quarters,
“half-time” is at least six semester hours or quarter hours per term for an undergraduate
program. At schools measuring progress by credit hours but not using semesters,
trimesters or quarters, “half-time” is at least 12 semester hours or 18 quarter hours per
year. At schools measuring progress by clock hours, “half-time” is at least 12 hours per
week. Note that schools may choose to set higher minimums than these. You must
be attending school at least half-time to be eligible for a Stafford Loan. Half-time
enrollment is not a requirement to receive aid from the Federal Pell Grant, Federal
Supplemental Educational Opportunity Grant, Federal Work-Study and Federal
Perkins Loan programs.
National Student Loan Data System (NSLDS)
NSLDS is our database for federal student financial aid where you can find out about
the aid you’ve received. If you’ve only just applied for aid, you won’t find any information
on NSLDS yet. NSLDS receives data from schools, guaranty agencies* and U.S. Department
of Education programs. The NSLDS Web site is generally available 24 hours a
day, seven days a week. By using your PIN, you can get information on federal loan and
Pell Grant amounts, outstanding balances, the status of your loans and disbursements
made. You can access NSLDS at www.nslds.ed.gov.
The Guide 38
Principal
The amount of money borrowed by the student. Interest is charged on this amount.
Promissory Note
A promissory note is a binding legal document you sign when you get a student loan.
It lists the conditions under which you’re borrowing and the terms under which you
agree to pay back the loan. It will include information on how interest is calculated
and what deferment and cancellation provisions are available to the borrower. It’s very
important to read and save this document because you’ll need to refer to it later when
you begin repaying your loan or at other times when you need information about
provisions of the loan, such as deferments or forbearances.
Regular Student
A regular student is one who is enrolled or accepted for enrollment at an institution for
the purpose of obtaining a degree, certificate or other recognized education credential
offered by that institution. Generally, to receive federal student financial aid from the
programs discussed in this guide, you must be a regular student. There are exceptions
to this requirement for some programs.
Satisfactory Academic Progress
To be eligible to receive federal student financial aid, you must meet and maintain your
school’s standards of satisfactory academic progress toward a degree or certificate offered
by that institution. Check with your school to find out its standards.
Selective Service Registration
If you are a male born on or after Jan. 1, 1960, are at least 18 years old, and are not
currently on active duty in the U.S. Armed Forces, you must register, or arrange to
register, with the Selective Service System to receive federal student aid. (Citizens of the
Federated States of Micronesia, the Republic of the Marshall Islands or the Republic of
Palau are exempt from registering.)
Student Aid Report (SAR)
After you apply for federal student financial aid, you’ll get your FAFSA results in an e-mail
report within a few days after your FAFSA has been processed or by mail in a few weeks.
This report is called a Student Aid Report or SAR. Your SAR details all the information
you provided on your FAFSA. If there are no corrections or additional information you
must provide, the SAR will contain your Expected Family Contribution* (EFC), which
is the number that’s used to determine your eligibility for federal student aid. Whether
you applied online or by paper, we will automatically send your data electronically to the
schools you listed on your FAFSA.
Important Terms
The Guide 39
State Higher Education Agencies
Alabama
Alabama Commission
on Higher Education
Toll-free: 1-800-960-7773
Web site: www.ache.state.al.us
Alaska
Alaska Commission on
Postsecondary Education
Toll-free: 1-800-441-2962
Web site: www.alaskaadvantage.state.ak.us
Arizona
Arizona Commission for
Postsecondary Education
Phone: 602-258-2435
Web site: www.azhighered.org
Arkansas
Arkansas Department
of Higher Education
Toll-free: 1-800-54-STUDY
Web site: www.arkansashighered.com
California
California Student Aid Commission
Toll-free: 1-888-224-7268
Web site: www.csac.ca.gov
Colorado
Colorado Commission
on Higher Education
Phone: 303-866-2723
Web site: www.state.co.us/cche
Connecticut
Connecticut Department
of Higher Education
Phone: 860-947-1855
Web site: www.ctdhe.org
Delaware
Delaware Higher Education Commission
Toll-free: 1-800-292-7935
Web site: www.doe.state.de.us/high-ed
District of Columbia
State Education Office (District of Columbia)
Phone: 202-727-6436
Web site: www.seo.dc.gov
Florida
Office of Student Financial Assistance,
Florida Department of Education
Toll-free: 1-888-827-2004
Web site: www.floridastudentfinancialaid.org
Georgia
Georgia Student Finance Commission
Toll-free: 1-800-505-4732
Web site: www.gsfc.org
Hawaii
University of Hawaii System
Phone: 808-956-8111
Web site: www.hawaii.edu/academics/
admissions/aid.html
Idaho
Idaho State Board of Education
Phone: 208-332-1574
Web site: www.boardofed.idaho.gov/
scholarships
Illinois
Illinois Student Assistance Commission
Toll-free: 1-800-899-4722
Web site: www.collegezone.com
Indiana
State Student Assistance Commission
of Indiana
Toll-free: 1-888-528-4719
Web site: www.in.gov/ssaci
Iowa
Iowa College Student Aid Commission
Toll-free: 1-800-383-4222
Web site: www.iowacollegeaid.org
Kansas
Kansas Board of Regents
Phone: 785-296-3421
Web site: www.kansasregents.org
Kentucky
Kentucky Higher Education Assistance Authority
Toll-free: 1-800-928-8926
Web site: www.kheaa.com
Louisiana
Louisiana Office of Student
Financial Assistance
Toll-free: 1-800-259-5626
Web site: www.osfa.state.la.us
Maine
Finance Authority of Maine
Toll-free: 1-800-228-3734
Web site: www.famemaine.com
Maryland
Maryland Higher Education Commission
Toll-free: 1-800-974-1024
Web site: www.mhec.state.md.us
Massachusetts
Massachusetts Board
of Higher Education
Phone: 617-727-9420
Web site: www.osfa.mass.edu
Michigan
Michigan Higher Education
Assistance Authority
Toll-free: 1-800-642-5626, ext. 37054
Web site: www.michigan.gov/mistudentaid
Minnesota
Minnesota Office
of Higher Education
Toll-free: 1-800-657-3866
Web site: www.ohe.state.mn.us
Mississippi
Mississippi Office of
Student Financial Aid
Toll-free: 1-800-327-2980
Web site: www.ihl.state.ms.us
Missouri
Missouri Department
of Higher Education
Toll-free: 1-800-473-6757
Web site: www.dhe.mo.gov
Montana
Office of the Commissioner
of Higher Education
Phone: 406-444-6570
Web site: www.oche.montana.edu
Nebraska
Nebraska Coordinating Commission
for Postsecondary Education
Phone: 402-471-2847
Web site: www.ccpe.state.ne.us
Nevada
Nevada Department of Education
Phone: 775-687-9200
Web site: www.doe.nv.gov
New Hampshire
New Hampshire Postsecondary
Education Commission
Phone: 603-271-2555
Web site: www.state.nh.us/postsecondary
New Jersey
New Jersey Higher Education Student
Assistance Authority
Toll-free: 1-800-792-8670
Web site: www.hesaa.org
State Higher Education Agencies
These agencies provide information on state
education programs, colleges and universities,
student aid assistance programs, grants, scholarships,
continuing education programs and career
opportunities. For updated information, you can
search the U.S. Department of Education’s database
at: www.ed.gov/Programs/bastmp/SHEA.htm
(The URL is case-sensitive.)
You can contact agencies by calling the telephone
numbers or by visiting the Web site listed below.
The Guide 40
State Higher Education Agencies
New Mexico
New Mexico Higher
Education Department
Toll-free: 1-800-279-9777
Web site: www.hed.state.nm.us
New York
New York State Higher Education
Services Corporation
Toll-free: 1-888-697-4372
Web site: www.hesc.org
North Carolina
College Foundation
of North Carolina
Toll-free: 1-866-866-2362
Web site: www.cfnc.org
North Dakota
North Dakota University System
Phone: 701-328-4114
Web site: www.ndus.edu
Ohio
Ohio Board of Regents
Toll-free: 1-888-833-1133
(for information specifically
about Ohio programs)
Toll-free: 1-877-428-8246
(for information about other
sources of financial aid)
Web site: www.regents.state.oh.us/sgs
Oklahoma
Oklahoma State Regents
for Higher Education
Toll-free: 1-800-858-1840
Web site: www.okhighered.org
Oregon
Oregon Student Assistance Commission
Phone: 541-687-7400
Toll-free: 1-800-452-8807
Web site: www.osac.state.or.us
Pennsylvania
Pennsylvania Higher Education
Assistance Agency
Toll-free: 1-800-692-7392
Web site: www.pheaa.org
Rhode Island
Rhode Island Higher
Education Assistance Authority
Toll-free: 1-800-922-9855
Web site: www.riheaa.org
South Carolina
South Carolina Commission
on Higher Education
Toll-free: 1-877-349-7183
Web site: www.che.sc.gov
South Dakota
South Dakota Board of Regents
Phone: 605-773-3455
Web site: www.sdbor.edu
Tennessee
Tennessee Student
Assistance Corporation
Toll-free: 1-800-342-1663
Web site: www.state.tn.us/tsac
Texas
Texas Higher Education
Coordinating Board
Toll-free: 1-888-311-8881
Web site: www.collegefortexans.com
Utah
Utah State Board of Regents
Toll-free: 1-800-418-8757
Web site: www.utahsbr.edu
Vermont
Vermont Student
Assistance Corporation
Toll-free: 1-800-642-3177
Web site: www.vsac.org
Virginia
State Council of Higher
Education for Virginia
Toll Free: 1-877-516-0138
Web site: www.schev.edu
Washington
Washington State Higher
Education Coordinating Board
Toll-free: 1-888-535-0747
Web site: www.hecb.wa.gov
West Virginia
West Virginia Higher Education
Policy Commission
Toll-free: 1-888-825-5707
Web site: www.hepc.wvnet.edu
Wisconsin
Wisconsin Higher Educational Aids Board
Phone: 608-267-2206
Web site: www.heab.wisconsin.gov
Wyoming
Wyoming Department of Education
Phone: 307-777-7690
Web site: www.k12.wy.us
U.S. Territories
American Samoa
American Samoa Community College
Phone: 684-699-9155
Web site: www.ascc.as
Commonwealth of the
Northern Mariana Islands
Northern Marianas College
Financial Aid Office
Phone: 670-234-5498, ext. 1525
Web site: www.nmcnet.edu
Federated States
of Micronesia
Federated States of Micronesia
Department of Education
Phone: 691-320-2872
Web site: www.literacynet.org/
micronesia/doe.html
Guam
University of Guam
Phone: 671-735-2288
Web site: www.uog.edu
Puerto Rico
Puerto Rico Council on
Higher Education
Phone: 787-724-7100
Web site: www.ces.gobierno.pr
Republic of Palau
Republic of Palau Ministry
of Education
Phone: 680-488-2471
Republic of the
Marshall Islands
Marshall Islands Scholarship
Grant and Loan Board
Phone: 692-625-3108
Web site: www.rmischolarship.net
Virgin Islands
Virgin Islands Department of Education
Phone: 340-774-4546
Web site: www.doe.vi
You can fi nd these and other publications at www.FederalStudentAid.ed.gov/pubs.
College Preparation Checklist
A year-by-year list of what high school students should do to prepare for college.
Funding Education Beyond High School: Audio Highlights
This resource for the visually impaired describes our federal student aid programs and
is available in CD and online.
Completing the FAFSA
This online resource contains detailed instructions for completing the Free Application
for Federal Student Aid (FAFSA).
Save Your Money, Save Your Identity
Information on how fi nancial aid applicants can avoid fraud and identity theft.
Your Federal Student Loans: Learn the Basics and Manage Your Debt
This publication covers what you should consider when planning on taking out a federal
student loan to help pay for your education beyond high school. Why get a federal
student loan? What types of federal student loans are there? What are nonfederal
(private) loans? When does repayment begin? What happens if I don’t repay?
FAFSA4caster Hall Pass
Information on FAFSA4caster to help you get an early start on the fi nancial aid process.
Stafford Loan Forgiveness Program for Teachers
Describes the eligibility criteria for having a Stafford Loan forgiven for service as a teacher.
You can fi nd these and other publications at www.FederalStudentAid.ed.gov/pubs
Other Federal Student Aid Publications
Information on how fi nancial aid applicants can avoid fraud and identity theft.
This publication covers what you should consider when planning on taking out a federal
student loan to help pay for your education beyond high school. Why get a federal
student loan? What types of federal student loans are there? What are nonfederal
(private) loans? When does repayment begin? What happens if I don’t repay?
Information on FAFSA4caster to help you get an early start on the fifi nancial aid process.
Describes the eligibility criteria for having a Stafford Loan forgiven for service as a teacher.
Funding Education
Beyond High School
The Guide to Federal Student Aid
2008–09


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