Financial Aid - Federal Stafford Loans - Bossier Parish Community College

Many students rely on federal government loans to finance their educations. These loans have low interest rates and do not require credit checks or collateral. The federal loan for students is called the Stafford Loan and is administered under the Federal Family Education Loan Program (FFELP). These loans are provided by private lenders, such as banks, credit unions and savings & loan associations. These loans are guaranteed against default by the federal government.

Stafford loans are available for students meeting certain qualifications. If you are considered a regular student enrolled in an eligible program at least half-time (6 hours), and you meet all other eligibility requirements such as Satisfactory Academic Progress (2007-2008), you may qualify for a FFEL Stafford Loan. You must meet all other eligibility requirements. In order to be considered for a Stafford Loan(s), a student must answer "yes" to the question “interested in loans” on the FAFSA. If you did not answer “yes”, you may request a loan by completing the Loan Request Form.

If a student indicates on his/her Free Application for Federal Student Aid (FAFSA) that he/she is interested in student loans, an award letter will be mailed to the student offering the maximum loan eligibility. The student will also be mailed a Loan Acceptance Agreement that must be completed before a loan is certified. If the student wishes to reduce the loan amount or decline all or a portion of the loan, he/she may do so via the Loan Acceptance Agreement.

The student borrower must also complete a Master Promissory Note (MPN).The student will be able to complete the MPN electronically by accessing the lender’s website via BPCC’s preferred lender list; a list of lenders that BPCC has found to provide the best borrower benefits and service to students. If the student prefers to complete a paper MPN, the student should notify his/her lender.

A first-time borrower is also required to participate in an Entrance Counseling Sessionthat is available electronically. Once student has completed the Loan Acceptance Form and returned the signed award letter, the school certifies the loan electronically, based on the student borrower’s loan eligibility and specifies the anticipated disbursement dates.

Disbursing loan funds:

Before disbursing loan funds, BPCC must first make sure that the student is eligible to receive them. The College must also ensure that the student has maintained continuous eligibility before the loan is disbursed. The most common change that would make a student ineligible for a Stafford or PLUS disbursement is if the student has dropped below half-time. The Financial Aid Office has a system to check the student’s enrollment status (and other eligibility requirements) at the time of disbursement. If the student is deemed ineligible to receive the loan disbursement, the funds are returned to the lender electronically.

If a student is in the first year of an undergraduate program and is a first-time Stafford borrower, BPCC may not disburse the first installment of the Stafford loan until 30 calendar days after the student’s program of study begins (1st day of class).

TYPES OF FEDERAL STAFFORD LOANS

Federal Subsidized Student Loan (SUB)

A subsidized loan is awarded on the basis of financial need.
The federal government pays the interest on the loan (subsidizes the loan) while the borrower is enrolled at least half-time and during the repayment grace period.

Students must begin repaying this loan 6 months after you cease to be enrolled at least half-time. The interest rate is fixed at 6.80%.

Federal Unsubsidized Student Loan (UNSUB)

The unsubsidized loan is not based on financial need.
The federal government does not pay the interest while the borrower is in school. All interest is the borrower's responsibility. You will be charged interest from the time the loan is disbursed until it is paid in full. Students can either pay the interest while they are in school or let it accrue. If it is not paid, it is added to the principle (capitalized) when the borrower goes into repayment. If your interest is capitalized, it will increase the amount you have to repay. You can choose to pay the interest as it accumulates; if so, you'll repay less in the long run.

Students must begin repaying this loan 6 months after you cease to be enrolled at least half-time. The interest rate is fixed at 6.80%.

Federal Parent Loan for Undergraduate Student (PLUS)

The PLUS loan is not need-based. Financial aid resources are subtracted from the student’s cost of attendance. The parent of a dependent student may borrow the remaining amount. There is no annual limit, nor is the EFC considered in PLUS eligibility. The parent should apply online at the lender’s website. The lender will determine if the parent is approved for a PLUS loan based on the parent’s credit report. The lender will fax the results (approved or denied) to the school. If approved, the PLUS loan is certified and then submitted to the lender. If the loan is denied, the student may be eligible for additional UNSUB loan. If so, the student will be mailed a new award letter and loan acceptance form. PLUS loan funds are mailed directly to BPCC. If the student’s account is paid in full, BPCC will endorse the check and mail to the parent. If student owes a balance BPCC will require the student/parent to pay remaining balance either by crediting the student’s account and issuing a refund check for the remaining balance, or if check from lender is not co-payable the student/parent will be required to pay remaining balance before PLUS check is released. MORE»

Loan Limits

Annual Loan Limits for Subsidized and Unsubsidized Stafford Loans

These amounts are the maximum yearly amounts you can borrow in both subsidized and unsubsidized FFEL loans, individually or in combination. Because you cannot borrow more than your cost of attendance minus the amount of any Federal Pell Grant you are eligible for and minus any other financial aid you will receive, you may receive less than the annual maximum amounts.
You may receive a subsidized loan and an unsubsidized loan for the same enrollment period as long as you don't exceed the annual loan limits.

Effective July 1, 2007:

If you are a dependent undergraduate student, with sufficient eligibility, each year you may borrow up to:

$3,500 if you are a first-year student.
$4,500 if you are a sophomore (30 hours earned).

If you are an independent undergraduate student or a dependent student whose parents have applied for but were denied a PLUS loan (a parent loan), each year you may borrow up to:

$7,500 if you are a freshman. No more than $3,500 of this amount may be in subsidized loans.
$8,500 if you are a sophomore (earned 30 hours or more). No more than $4,500 of this amount may be in subsidized loans.

Lifetime Loan Limits for Subsidized and Unsubsidized Stafford Loans

The maximum total debt from Stafford Loans when you graduate cannot exceed:

Undergraduate Student - $46,000 (no more than $23,000 of this amount may be in subsidized loans.

Counseling Sessions

Entrance Counseling Session Before you receive your Stafford Loan, the federal government requires that you understand the basics of borrowing.

Exit Counseling Session Before you begin repaying your Stafford Loan(s), the federal government requires that you understand the basics of repayment.

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