Stafford Federal Loans Terms and Conditions
Direct Payment (ACH)
If ACH is rejected by the borrower's bank more than once within the life of the loan, the interest rate reduction is discontinued. The borrower may continue to use ACH, however.
On Time
On time is defined as no more than 30 days delinquent.
Late Fees
If a payment is delinquent, a late fee of 5% of the payment amount will be charged on loans disbursed on or after July 1, 2008.
Eligibility
You must be a U.S. citizen or permanent resident and be enrolled at least half time as an undergraduate or graduate student in an accredited school.
Loan Limits
Dependent Student Stafford Loan Levels
| Grade Level | Combined Subsidized/Unsubsidized | Additional Unsubsidized |
|---|---|---|
| Freshman | $3,500 | $2,000 |
| Sophomore | $4,500 | $2,000 |
| Junior & Senior | $5,500 | $2,000 |
| Aggregate Limits | Subsidized Limits | Combined Subsidized/Unsubsidized Total Limites |
| Undergraduate | $23,000 | $31,000 |
Independent Student Stafford Loan Levels
| Grade Level | Combined Subsidized/Unsubsidized | Additional Unsubsidized |
|---|---|---|
| Freshman | $3,500 | $6,000 |
| Sophomore | $4,500 | $6,000 |
| Junior & Senior | $5,500 | $7,000 |
| Aggregate Limits | Subsidized Limits | Combined Subsidized/Unsubsidized Total Limites |
| Undergraduate | $23,000 | $57,500 |
| Graduate | $65,500 | $138,500 |
Interest Rate
Subsidized
For loans disbursed on or after July 1, 2009: Fixed 5.6%.
Subsidized interest is paid by the federal government prior to entering
repayment (during in-school, grace or deferment periods).
Unsubsidized
For loans disbursed on or after July 1, 2006: Fixed 6.8%.
Unsubsidized
interest is paid by the borrower throughout the entire
life of the loan. Interest accrued while in a period of non-payment,
will be capitalized (added to the principal balance of the loan).
Graduate and Professional Student
For loans disbursed on or after July 1, 2006: Fixed 6.8%.
$20,500 for each year of study (maximum of $8,500 subsidized).
Fees
Origination fee: 0.5%
Default fee: 1%
Repayment Terms
Loan(s) may be repaid over a maximum of 10 years. Repayment begins six months (grace period) after the borrower graduates, leaves school or drops to less than half-time status.
FFEL Loan Interest Rates Effective July 1, 2009
| Loan Type | Grade Level | FFEL | |
|---|---|---|---|
| 7/1/2008 to 7/1/2009 | 7/1/2009 to 7/1/2010 | ||
| Subsidized Loans | Undergraduate | 6.0 | 5.6 |
| Graduate | 6.8 | 6.8 | |
| Unsubsidized Loans | Undergraduate | 6.8 | 6.8 |
| Graduate | 6.8 | 6.8 | |
| PLUS Loans | All | 8.5 | 8.5 |
Variable Rates for Loans First Disbursed Between July
1, 1998 and June 30, 2006
These rates were calculated
based upon statutory formulas and equal the bond equivalent rate
of the 91-day Treasury bills auctioned on May 27, 2008, plus
certain statutory percentage add-ons. The 91-day Treasury bills
were auctioned at 1.905 percent, rounded to 1.91 percent.
| Loan Type | Status | FFEL | |
|---|---|---|---|
| 7/1/2008 to 7/1/2009 | 7/1/2009 to 7/1/2010 | ||
| Subsidized Loans | Repayment or Forbearance | 4.21 | 2.48 |
| In-school, Grace, or Deferment | 3.61 | 1.88 | |
| Unsubsidized Loans | Repayment or Forbearance | 4.21 | 2.48 |
| In-school, Grace, or Deferment | 3.61 | 1.88 | |
| PLUS Loans | All | 5.01 | 3.28 |
New loan programs listed above are subject to change without notice, based on regulatory changes to the Federal Higher Education Act and/or upon financial market volatility impacting the earnings of lenders in the Montana's Choice program.
Benefits granted on loans already disbursed are paid out of excess funds from financed bonds and are subject to change or elimination at any time based upon the availability of such funds. Benefits are payable as long as the loans are owned by MHESAC or a participating Montana's Choice lender.