Stafford Loan
Federal Plus Loan

Federal Stafford Loan (Subsidized and Unsubsidized)

The Master Promissory Note (MPN) is a new Stafford Loan promissory note that will replace the current one for all loans certified on or after July 1, 2000. The MPN allows students to open “lines of credit” for education expenses over their academic careers. You may continue to receive Stafford Loans for future enrollment periods without completing new promissory notes, provided you qualify for Stafford Loans, continue attending schools that are eligible to use the multi-loan feature, and keep the same lender. You are notified that a loan is being generated on your behalf for each year of enrollment after the original MPN has been signed via the financial aid award letter. If you want to reduce or reject any portion of your student loan you must sign and return your award letter.

Who may apply: All students applying for a Federal Stafford Loan must be U.S. citizens or eligible noncitizens, enrolled for at least six credits per semester, and attending classes and maintaining satisfactory academic progress to continue being eligible for their loan.

How to apply: Eligibility for a Federal Stafford Loan is determined by completion of the FAFSA and the Museum School’s financial aid application package. Your maximum eligibility for the Stafford subsidized and/or unsubsidized loan will be on your award letter. To activate this loan and for the lender to have permission to disburse the loan to the School, you must complete an MPN. An MPN tells the lender to disburse the maximum amount of the loan to the School in your name. If you choose to borrow less than the maximum amount of the loan, you must notify the Financial Aid Office immediately.

Availability of the MPN to new and transfer students: During new-student orientation, new and transfer students are required to attend a Student Loan Entrance Counseling Session where they receive information on their rights and responsibilities as a borrower and complete the MPN. The federal government mandates the Student Loan Entrance Counseling Session. You will not be allowed to complete an MPN until you have attended this session.
 
Availability of the MPN to returning students: MPNs are mailed to returning students during the summer if they are first-time borrowers. Please complete the MPN and return it to American Student Assistance (ASA). MPNs are also available to returning students in the Financial Aid Office during the first week of school. Returning students must complete the MPN before the lender will disburse the loan funds to the school. Note: You are only required to complete an MPN the first time you borrow money while a student at the Museum School. Loan applications for all following years are completed electronically after you complete the financial aid application process.

Disbursements: Student loans are disbursed twice during the academic year: half during the fall semester and half during the spring semester. For any student with a credit balance on their tuition account, a refund will be generated within six to eight weeks after all outside awards/loans have been disbursed to the school. ASA disburses loan funds to the School’s account electronically. You do not have to go to the Business Office to endorse the check. The Business Office notifies students whose accounts are credited with Stafford Loans of the following:

• Date and amount of the disbursement
• Right to cancel all or a portion of the disbursement
• Procedures and time frame by which you or your parents must notify the school that you wish to cancel the loan

The Bursar sends this notice no earlier than 30 days before and no later than 30 days after crediting the account. You receive this notice once for each disbursement received.

Federal Stafford Loan Maximum Annual Amounts

Academic Level	Dependent (Subsidized)	Independent (Subsidized)	Independent (Unsubsidized)
First-year undergraduate	$3,500	$3,500	$4,000
Second-year undergraduate	$4,500	$4,500	$4,000
Third- and fourth-year undergraduate	$5,500	$5,500	$5,000

Variable interest rate: 91-day T-bill plus 1.7 percent (adjusted annually), not to exceed 8.25 percent.

Fees: Before disbursement, the federal government and guaranty agency deduct origination and guarantee fees of 3 percent to 4 percent of the amount borrowed.

Repayment terms: Subsidized and unsubsidized Federal Stafford Loans allow you to borrow up to the maximum amount available for your grade level. The federal government pays interest on subsidized Stafford Loans while you are enrolled in school for at least six credits and for a six-month grace period afterward. If you are not fully eligible for need-based subsidized Stafford funding, you may be eligible for an unsubsidized Stafford Loan for any remaining Stafford eligibility. However, on the unsubsidized portion, you are responsible for all interest that accrues from the date of disbursement. Minimum repayment starts at $50 monthly and rises depending on amount borrowed. This is a 10-year loan.

Note: For dependent students whose parents have been denied a PLUS Loan, the amount a student can borrow under the unsubsidized program is the same as for an independent student.