If you need answers right away to questions about federal student aid, call the Federal Student Aid Information Center between 8 A.M. and midnight (Eastern time), seven days a week: 1-800-4-FED-AID. Counselors at this number can:
• help you complete the FAFSA
• answer questions about a PIN
• help you make corrections to your SAR
• tell you whether a school participates in the federal student aid programs and that school’s student loan default rate
• explain federal student aid eligibility requirements
• explain the process of determining financial need and awarding aid
• have your application information sent to a specific school
• send federal student aid publications to you
You can also use the automated response system to find out if your federal student financial aid application has been processed and to request a copy of your Student Aid Report (SAR).
TTY users may call 1-800-730-8913 with any federal student aid questions. Callers without access to 800 numbers may call 1-319-337-5665. This is not a toll-free number. You can also write to the Federal Student Aid Information Center at the following address: Federal Student Aid Information Center, P.O. Box 84, Washington, DC 20044-0084.
What is a Federal Pell Grant?
A Federal Pell Grant, unlike a loan, does not have to be repaid. Usually, Pell Grants are awarded only to undergraduate students who have not earned a bachelor’s or graduate degree. In some cases, you may receive a Pell Grant for attending a post baccalaureate teacher certification program. For many students, Pell Grants provide a foundation of financial aid to which other aid may be added.
Stafford Loans are the Department’s major form of self-help aid. Direct Stafford Loans are available through the William D. Ford Federal Direct Student Loan (Direct Loan) Program, and FFEL Stafford Loans are available through the Federal Family Education Loan (FFEL) Program. The terms and conditions of a Direct Stafford or a FFEL Stafford are similar. The major differences between the two are the source of the loan funds, some aspects of the application process, and the available repayment plans. Under the Direct Loan Program, the funds for your loan are lent to you directly by the U.S. Government. Under the FFEL Program, the funds for your loan are lent to you from a private lender (bank, credit union, or other lender that participates in the FFEL Program).
The Direct and FFEL programs also offer PLUS Loans for parents of dependent students and Consolidation Loans.
What kinds of direct and FFEL Stafford Loans are available?
Direct and FFEL Stafford Loans are either subsidized or unsubsidized. You can receive a subsidized loan and an unsubsidized loan for the same enrollment period. A subsidized loan is awarded on the basis of financial need. You will not be charged any interest before you begin repayment or during authorized periods of deferment. The Federal Government “subsidizes” the interest during these periods. An unsubsidized loan is not awarded on the basis of need. You will be charged interest from the time the loan is disbursed until it is paid in full. If you allow the interest to accumulate, it will be capitalized—that is, the interest will be added to the principle amount of your loan and additional interest will be based upon the higher amount.
NOTE: If your interest is capitalized, it will increase the amount you have to repay. If you choose to pay the interest as it accumulates, you will repay less in the long run. In addition, the amount of interest you pay during the first 60 months that interest payments are required may be tax deductible.
Who can get a Stafford Loan?
If you are a regular student enrolled in an eligible program of study at least half-time, you may receive a Direct or FFEL Stafford Loan. You must also meet other general eligibility requirements.
When do I pay back these loans?
After you graduate, leave school, or drop below half-time enrollment, you have six months before you begin repayment (you may have longer than six months if you are on active duty with the military). This is called a “grace period”. During the grace period on a subsidized loan, you do not have to pay any principle, and no interest will be charged. During the grace period on an unsubsidized loan, you do not have to pay any principle, but interest will accrue. If you do not pay the interest, it will be capitalized.
PLUS Loans enable parents with good credit histories to borrow to pay the education expenses of each child who is a dependent undergraduate student enrolled at least half-time. PLUS Loans are available through both the Direct Loan and FFEL programs. Most of the benefits to parent borrowers are identical in the two programs.
Are there any borrowing requirements my parents have to meet?
Yes. To be eligible to receive a PLUS Loan, your parents generally will be required to pass a credit check. If they do not pass the credit check, they might still be able to receive a loan if someone, such as a relative or friend who is able to pass the credit check, agrees to endorse the loan, promising to repay it if your parents should fail to do so. Your parents might also qualify for a loan even if they do not pass the credit check if they can demonstrate that extenuating circumstances exist. You must meet the general eligibility requirements for federal student financial aid. Your parents must also meet some of these general requirements. For example, your parents must meet citizenship requirements and may not be in default or owe a refund to any student financial assistance program.
A Consolidation Loan is designed to help student and parent borrowers simplify loan repayment by allowing the borrower to consolidate several types of federal student loans with various repayment schedules into one loan. You can even consolidate just one loan into a Direct Consolidation Loan to get benefits such as flexible repayment options. If you have more than one loan, a Consolidation Loan simplifies the repayment process because you make only one payment a month. Also, the interest rate on the Consolidation Loan may be lower than what you are currently paying on one or more of your loans. If you are in default on a federal education loan, you may receive a Consolidation Loan if certain conditions are met. Both the Direct Loan Program and the FFEL Program offer Consolidation Loans. Direct Consolidation Loans are available from the U.S. Department of Education. FFEL Consolidation Loans are available from participating lenders such as banks, credit unions, and savings and loan associations. For more information, you can go to www.loanconsolidation.ed.gov.