Stafford 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 full or half time as an undergraduate or graduate student in an accredited school.
Loan Limits
Dependent Undergraduate Student
| 1st year | $5,500 |
| 2nd year | $6,500 |
| 3rd year | $7,500 |
| 4th year | $7,500 |
Independent Undergraduate Student
| 1st year | $9,500 (maximum of $3,500 subsidized) |
| 2nd year | $10,500 (maximum of $4,500 subsidized) |
| 3rd year | $12,500 (maximum of $5,500 subsidized) |
| 4th year | $12,500 (maximum of $5,500 subsidized) |
Graduate and Professional Student
$20,500 for each year of study (maximum of $8,500 subsidized)1
Interest Rate
For loans disbursed on or after July 1, 2006: Fixed 6.8%
Subsidized interest is paid by the federal government prior to entering repayment (during in-school, grace or deferment periods). Unsubsidized interest is paid by the borrower throughout the entire life of the loan. Interest accrued while in a period of nonpayment, will be capitalized (added to the principal balance of the loan).
Fees
Origination fee: 1%
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, 2008
| Loan Type | Grade Level | FFEL | |
|---|---|---|---|
| 7/1/2006 to 7/1/2008 | 7/1/2008 to 7/1/2009 | ||
| Subsidized Loans | Undergraduate | 6.80 | 6.00 |
| Graduate | 6.80 | 6.80 | |
| Unsubsidized Loans | Undergraduate | 6.80 | 6.80 |
| Graduate | 6.80 | 6.80 | |
| PLUS Loans | All | 8.50 | 8.50 |
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 | |
|---|---|---|---|
| 7/1/2006 to 7/1/2008 | 7/1/2008 to 7/1/2009 | ||
| Subsidized Loans | Repayment or Forbearance | 7.22 | 4.21 |
| In-school, Grace, or Deferment | 6.62 | 3.61 | |
| Unsubsidized Loans | Repayment or Forbearance | 7.22 | 4.21 |
| In-school, Grace, or Deferment | 6.62 | 3.61 | |
| PLUS Loans | All | 8.02 | 5.01 |
1 The graduate debt limit includes Stafford
Loans received for undergraduate study.
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.