Federal Direct Stafford Loans for Graduate Student

Federal Direct Stafford Loans for Graduate Students

What is a Federal Direct Stafford Loan?

Through the Department of Education, students may qualify for Federal Direct Stafford Loans by completing the Free Application for Federal Student Aid (FAFSA). Federal Direct Stafford Loans are available to all graduate students to help pay for their education. There are different Annual Loan Limits that a student can borrow depending on their grade level and dependency status. Federal Direct Stafford Loans are borrowed by a student and do not require a credit check.

• Repayment beginning after your one-time 6 month grace period ends. The grace period begins when a student graduates, leaves school, or drops to less than half-time enrollment, which is 5 credit hours as a graduate student at MSU Denver.

• All Graduate Federal Direct Stafford Loans (Subsidized and Unsubsidized) have a fixed interest rate of 6.8%.

Subsidized Federal Direct Stafford Loan
Eligibility for the Subsidized Federal Direct Stafford Loan is based on your need as determined by the Office of Financial Aid using your FAFSA and Cost of Attendance. If you qualify, the federal government will pay (subsidize) your interest while you are in school and during your 6 month grace period. Interest will not begin to accrue until repayment begins. If you do not qualify for a Subsidized Stafford Loan you may qualify for an Unsubsidized Loan. Please see Federal Direct Stafford Loan eligibility and regulations for additional eligibility requirements. NOTE: As of July 1, 2012 graduate students are no longer eligible for subsidized loans.

Unsubsidized Federal Direct Stafford Loan
Unsubsidized Loans are not based on financial aid need and are available to all eligible students. The Office of Financial Aid uses your FAFSA and Cost of Attendance to determine the amount of unsubsidized loan for which you qualify. You are responsible for the interest on your unsubsidized loan from the time the loan is disbursed until it is paid in full. You can choose to pay the interest quarterly or to have it capitalized (interest added to the principle) against loans borrowed. 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 must contact Direct Loan Servicing to make interest payment arrangements. Please see Federal Direct Stafford Loan eligibility and regulations for additional eligibility requirements.

Federal Direct Stafford Loan Eligibility and Regulations

The regulations that the Office of Financial Aid determines for Federal Direct Stafford Loans are as follows:

• Student must be enrolled in a minimum of 5 credit hours as a graduate student (half-time status) and be enrolled in a degree-seeking program.

• Student must be meeting the terms of the Office of Financial Aid's Graduate Satisfactory Academic Progress(SAP) Policy.

• Student must have a complete financial aid file. This includes having a Free Application for Federal Student Aid (FAFSA) on file.

• Student must complete an Entrance Counseling Session at Direct Loan Entrance Counseling.

• The Office of Financial Aid determines the loan type and amount of eligibility for Federal Direct Stafford Loans. The loan amounts and types are based on information from the FAFSA and can never exceed the federal annual loan limits or the student's cost of attendance (financial aid budget).

• There are Federal Direct Stafford Loan Limits regarding the amount a student can borrow based on a student's dependency status (based on FAFSA regulations) and by class status (grade level).

• Students should complete a loan Exit Counseling session before graduation, at Direct Loan Exit Counseling.

Applying for a Federal Direct Stafford Loan

STEP 1:
Complete the Free Application For Federal Student Aid (FAFSA) at www.fafsa.ed.gov. To have your FAFSA sent to the Office of Financial Aid at MSU Denver, include the MSU Denver Title IV School Code of 001360 on your FAFSA. When the Office of Financial Aid receives your FAFSA, you will be notified through your ConnectU email account if we need additional information. If we are requesting any additional information, please submit it as soon as possible. Once your financial aid file is complete and you have met loan eligibility requirements, you will receive an Award Notice via your ConnectU email account that includes your offered Federal Direct Stafford Loan eligibility.

STEP 2: 
 ACCEPT YOUR Federal Direct Stafford Loan(s)

• Logon to ConnectU.

• Under My Services: Select "Registration, Credit Card, Insurance Waiver, Student Records, & Financial Aid Menu".

• Select "Financial Aid".

• Select "My Award Information".

• Select "Accept Award Offer by Aid Year".

• Select aid year.

• Click on "Accept Full Amount All Awards" to accept the full loan amount. (Please note: For both of these options, the dollar amount accepted is for two semesters.)
  OR
  On the line marked "Federal Subsidized Loan Offered" or "Federal Unsubsidized Loan Offered", select "Accept". Then enter the total dollar amount (cannot exceed offered amount) that you would like to accept. Click on "Submit Decision."  

This tutorial is a walkthrough ConnectU Self-Service:

STEP 3: 
COMPLETE ENTRANCE COUNSELING

Before receiving a Federal Direct Stafford Loan, borrowers are required to complete a student loan entrance counseling interview. This quick and easy interactive counseling session provides useful tips and tools to help you develop a budget for managing your educational expenses. It also helps you understand your loan responsibilities when you enter repayment.

STEP 4: 
SIGN A MASTER PROMISSORY NOTE

The Master Promissory Note (MPN) is required to be completed by each borrower. The MPN is a legal contract that binds you to the federal government. Signing this document indicates that you promise to repay the student loan you are taking out. The master promissory note also includes important language about rights and responsibilities as a borrower. Both subsidized and unsubsidized Stafford Loans are covered under the master promissory note. Students will need to complete their MPN at Direct Loans MPN.

Processing of a Federal Direct Stafford Loan

Step 1. The Office of Financial Aid will determine if you are eligible for processing based on the following:
• Complete Financial Aid File
• Enrollment in a minimum of 5 credit hours as a graduate student
• Making the Office of Financial Aid's Satisfactory Academic Progress
• Annual/Aggregate Limits
Students who are not eligible for loans will receive an email in their ConnectU email account notifying them of their situation.
Once your loan has been processed, you will be emailed a Loan Recommendation Letter via your ConnectU email account. The Loan Recommendation Letter summarizes your loan amount for each specific loan processed based on your request. If you are a first-time borrower of Federal Direct Stafford Loans at MSU Denver, the letter will also remind you of the Entrance Interview and Master Promissory Note requirements (Steps 2 and 3 of the loan process). If you are a first-time borrower, you will also be sent a reminder email to electronically sign your Master Promissory Note.

Step 2. MSU Denver requires all first-time borrowers to complete an Entrance Interview before you can receive your loan funds (disbursements). You may complete the Entrance Interview online at Direct Loans Entrance Counseling. Once you have completed the Entrance Interview, Direct Loan Servicing will email the Entrance Interview confirmation to the Office of Financial Aid at MSU Denver.

Step 3. Once your loan request has been processed by the Office of Financial Aid, you may be contacted by Direct Loan Servicing to complete the Federal Direct Stafford Loan Master Promissory Note (MPN). The MPN states all Borrower Responsibilities regarding paying back your student loans. You must notify Direct Loan Servicing of any and all of the following: 1) change in address, 2) name change, 3) if you drop below, at least, half-time enrollment status, 4) if you transfer to another school, and 5) when you graduate.
The MPN requires verification of contact information and two personal references. If you do not sign your MPN, your loan will not be guaranteed and the loan request will be automatically cancelled after 90 days by MSU Denver or the student can request for the loan to be cancelled with a written statement to our office.

Exit Interviews. When you graduate or withdraw from MSU Denver, you are recommended to complete an online Exit Counseling at Direct Loan Exit Counseling. This will help you to review your borrower rights and responsibilities. These are the same borrower rights and responsibilities that you signed on your Master Promissory Note (MPN).

Disbursement of a Federal Direct Stafford Loan

The Student Loan Recommendation email will provide you with details about the amount, type, lender, and estimated dates of disbursement of funds. To receive your loan funds, your financial aid file must be complete, including the completion of your Entrance Interview and Master Promissory Note, before the school can receive or release any funds. You will also receive a guarantee notice from Direct Loan Servicing via mail. Please keep these documents for your records. Check with the Office of Financial Aid (Central Classroom Room 116, 303-556-8593) if your funds have not been applied to your account.

Remember - Even if your loan funds are guaranteed, they will not arrive at MSU Denver until you meet all loan eligibility requirements such as having a complete file (including Entrance and Satisfactory Academic Progress requirements) and having a minimum of 5 credit hours for a graduate student for the loan period for which you are expecting.

If your loan is submitted late in the semester and your funds are not received by the last day of the semester, we will be required to follow Late Disbursement regulations.

Late Disbursements (after semester ends). Any Federal Direct Stafford or PLUS Loan funds received after the last day of the semester must follow Prior Term Disbursement Regulations. Grades must post to your account to help determine your eligibility for your loan funds. You must have completed 5 credit hours as a graduate student with grades of D or better, have completed all the requirements requested on your file, and must be making Satisfactory Academic Progress with the Office of Financial Aid. Students who complete a late Master Promissory Note fall under these regulations.

Cancellations or Reductions

You may request that your loan funds be cancelled or reduced after applying or receiving your Loan Recommendation Letter. You have 30 days after the loan period to make this request. You must submit a written statement to the Office of Financial Aid to cancel the loan. This may be faxed, mailed or dropped off in our office, and please be sure to include your 900 student ID number on all correspondence submitted to our office.

If you have received the loan funds and want to cancel or reduce the loan, you will be asked to return the cancelled or reduced loan funds from the refund (to the Cashier's Office) after submitting your written statement to our office. To request any reductions or changes to your loans, you should complete a Financial Aid Loan Rejection Form (REJLN), which is available in our Financial Aid Forms Section of the Website.

Borrowing Limits for Federal Direct Stafford Loans

Students are classified as Dependent or Independent by the Free Application for Federal Student Aid (FAFSA). The class levels are determined by the student's number of completed course hours. You may qualify for less than the yearly maximum amounts listed below if you receive other financial aid that is used to cover your Cost of Attendance. The offered loan amounts may be viewed on your ConnectU account. You are not required to borrow the amount you are eligible to receive. The minimum loan request that we can process is $100.

(Dependent students whose parents are unable to borrow a PLUS loan are allowed to borrow as Independent students. Contact the Office of Financial Aid for further details.)

**As of July 1, 2012 graduate students are only eligible for Unsubsidized Stafford and Graduate PLUS loans.

Lifetime Maximum Loan Limits
Dependent students are eligible to borrow $31,000, in a combination of Subsidized and Unsubsidized Loans (with a maximum of $23,000 in Subsidized Loans), while earning their undergraduate degree.

Independent students are eligible to borrow $57,500 in a combination of Subsidized and Unsubsidized Loans (with a maximum of $23,000 in Subsidized Loans) while earning their undergraduate degree.

Graduate or professional studies students are eligible to borrow $138,500 in a combination of Subsidized and Unsubsidized Loans (with a maximum of $65,500 in Subsidized Loans) while earning their graduate or professional degree.

NOTE: Any student that has had a consolidation will have to have their Aggregate loan limits calculated by hand and have their file manually updated with accurate borrowed loan amounts. Any student that has borrowed graduate loans should submit a statement to the Office of Financial Aid asking us not to include them in the aggregate amounts that are reported by the National Student Loan Database System (NSLDS), www.nslds.ed.gov. Any graduate loans borrowed during the current academic year will be counted toward your annual Federal Direct Stafford Loan limits. Students may visit the National Student Loan Database System, (NSLDS) to view their current loan history.