FINANCIAL AID OFFICE

FEDERAL LOANS

Federal Direct Subsidized and Unsubsidized loans are available to students from the federal government through the Department of Education.  This page reviews the following: 
  1. Definitions
  2. Eligibility Requirements
  3. Annual and Lifetime Loan Limits
  4. Time Limitation on Receiving Subsidized Loan Funds
  5. Accepting Loans in Banner
  6. Entrance Counseling and Master Promissory Note Requirements
  7. Disbursement of Funds
  8. Revisions and/or Returning Loan Funds 
  9. Changes to Status that May Affect Eligibility
  10. Exit Counseling
  11. Loan Servicers
  12. Helpful Websites

Definitions   top

Subsidized loans are interest free while the student is enrolled at least half-time.  Fixed interest rates are set by the federal government and subject to change.  The interest rate for subsidized loans originated between July 1, 2012 and June 30, 2013 is 3.4%.  The interest rate for subsidized loans first disbursed on or after July 1, 2013 but before July 1, 2014 is 3.86%.  To be eligible for this loan, a student must demonstrate financial need as determined from the FAFSA.

Unsubsidized loans accrue interest while the student is in attendance.  Students have the option to make interest only payments on the loan while they are in school or defer all payment until after they graduate or leave school for any reason.  Interest that has accumulated while the student is in school will be capitalized and added onto the principal balance of the loan.  Students who do not qualify for a subsidized loan will usually qualify for an unsubsidized loan.  The interest rate for unsubsidized loans first disbursed on or after July 1, 2013 but before July 1, 2014 is 3.86% for undergraduate students and 5.41% for graduate students. 

Annual loan limits are set for each class year by the Department of Education and cannot be changed by the school.  Eligibility requirements are also determined by the Department of Education and all regulatory policies must be strictly adhered to by the college.


Eligibility Requirements   top

  • Must have a valid FAFSA on file
  • Must be a U.S. citizen or eligible noncitizen
  • Accepted as a regular student working toward a degree or eligible certificate program
  • Attending at least half-time (6 credit hours)
  • Maintain satisfactory progress toward a degree per the policies of the college
  • Cannot be in default on any other federal loans
  • Cannot owe a refund on a federal student grant or loan

Loan Limits   top

Annual Loan Limits by Class Year   top

Class Level

Dependent Students Independent Students
(and dependents whose parents are unable to obtain PLUS Loans)
Freshmen
0-29 credit hours
$5,500 per year; No more than $3,500 of this amount may be subsidized. $9,500 per year; No more than $3,500 of this amount may be subsidized.
Sophomore
30-59 credits
$6,500 per year; No more than $4,500 of this amount may be subsidized. $10,500 per year; No more than $4,500 of this amount may be subsidized.
Junior and Senior
60+ credit hours
$7,500 per year; No more than $5,500 of this amount may be subsidized. $12,500 per year; No more than $5,500 of this amount may be subsidized.
Teacher Certification $5,500 per year; All may be subsidized $12,500 per year; No more than $5,500 of this amount may be subsidized.
Graduate Students
All year levels
Not Applicable $20,500 per year; No amount may be subsidized.


Lifetime Loan Limits by Degree Level   top

Degree Level

Dependent Students Independent Students
(and dependents whose parents are unable to obtain PLUS Loans)
Undergraduate $31,000; No more than $23,000 of this amount may be subsidized. $57,500 - No more than $23,000 of this amount may be in subsidized loans.
Teacher Certification $31,000; No more than $23,000 of this amount may be subsidized and includes all prior undergraduate loans. $57,500; No more than $23,000 of this amount may be subsidized and includes all prior undergraduate loans.
Graduate Not applicable. $138,500; No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes all federal loans received for undergraduate study.


 

Time Limitation on Direct Subsidized Loan Eligibility for First-Time Borrowers on or after July 1, 2013  top

On July 6, 2012, the Moving Ahead for Progress in the 21st Century Act (MAP-21) (Public Law 112-141) was enacted. MAP-21 added a new provision to the Direct Loan statutory requirements (see HEA section 455(q)) that limits a first-time borrower’s eligibility for Direct Subsidized Loans to a period not to exceed 150 percent of the length of the borrower’s educational program.

The 150 percent change means students in a four-year program will be eligible for subsidized student loans for the equivalent of six years .  The student who reaches this limitation could continue to receive unsubsidized Stafford loans if he or she is otherwise eligible.  Once a borrower has reached the 150 percent limitation, his or her eligibility for an interest subsidy also ends for all outstanding subsidized loans that were disbursed on or after July 1, 2013. At that point, interest on those previously borrowed loans would begin to accrue and would be payable in the same manner as interest on unsubsidized loans.

Only first-time borrowers on or after July 1, 2013 are subject to the new provision. Generally, a first-time borrower is one who did not have an outstanding balance of principal or interest on a Direct Loan or on a FFEL Program Loan on July 1, 2013.

Click here to review the Department of Education's handout for more information and examples.

 

Accepting Subsidized and Unsubsidized Loans   top

Subsidized and Unsubsidized loans are awarded to students in an offered status.  Students should review their financial aid award and decide if they need or want the loans that have been offered to them.  Loans will not be originated and disbursed unless the student has accepted the loan in their Banner Self-service account.  Students can choose to accept their loan in full, reduce the amount of the loan, or decline the loans completely. For assistance in reviewing and accepting your loans in Banner the following links may be very helpful:


Counseling and Master Promissory Note Requirements   top

All students borrowing a Federal Direct Subsidized or Unsubsidized loan for the first time must also complete the Entrance Counseling and a Master Promissory Note online at www.studentloans.gov. Below describes each task and screenshots from the website.  Students must select the school to send the completed results.  Buffalo State is listed as SUNY COLLEGE AT BUFFALO.

  • Entrance Counseling - Entrance counseling is an online session mandatory for all first-time federal loan borrowers.  Entrance counseling explains the student's rights and responsibilities as a student borrower.  Students are educated on topics such as interest rates, interest charges, responsible borrowing, budgeting, repayment plans and avoiding default. 
    • Below shows how the student should sign into www.studentloans.gov and which links to click to begin the Entrance Counseling.
    • Entrance Counseling Tip Sheet is available to assist students through this processs.  Students should set aside approximately one hour to complete this important task.
           
  • Federal Direct Master Promissory Note (MPN) - A binding legal document that the student must sign prior to a federal loan disbursing. The MPN can be used to make one or more loans for one or more academic years (up to 10 years). It lists the terms and conditions under which the student agrees to repay the loan and explains his/her rights and responsibilities as a borrower.  It is important to read and save the MPN to refer to it later when the student begins repaying his/her loan(s) or at other times when information is needed about provisions of the loan, such as deferments or forbearances.
    • Below shows the links the student should follow to complete the MPN once logged in to www.studentloans.gov.
           


Disbursement of Loan Funds   top

Loans are generally awarded for the full academic year (except when a student will only be in attendance for one semester) with two equal disbursements one in fall semester and one in the spring semester. Disbursement of funds does not begin until after the first week of the semester or when schedule adjustment is over.  Funds are disbursed directly to the college and are applied to a student’s account to cover applicable outstanding charges such as tuition, fees, room and board.  Any loan funds in excess of a student’s charges will be refunded to the student by the Student Accounts Office via direct deposit or paper check.


Revisions and/or Return of Loan Funds   top

If a student wants to change the amount of a loan that they have accepted, declined or reduced in Banner, they will need to submit a Loan Revision Request Form. If a student wants to return all or a portion of a loan that has already been disbursed, they will need to submit a Return Loan Request Form available from the Student Account Office. All requests for a revision or return of loan funds must be within regulatory guidelines.

 

Changes to Your Status   top

Situations that may decrease the amount of a loan after it has been awarded and/or disbursed include:

  • Withdrawal From Classes- may result in a decrease of your loan and/or a return of loan funds
  • Satisfactory Academic Progress (SAP) a student who does not meet SAP standards may lose eligibility for their loan
  • Repeating Courses-  an illegal repeat of a class may result in a decrease to your loan
  • Other Aid - including scholarships, room and board waivers, VESID, and other resources may result in a decrease of your loan

Situations that may increase the amount of a loan and require the submission of a Loan Revision Request Form include:

 

Exit Counseling   top


Exit counseling is a mandatory session which occurs when a student graduates or ceases to be enrolled on at least a half-time basis (6.0 credits).  Exit counseling explains the student's loan repayment responsibilities and when repayment begins.  More information about exit counseling is available here.


Loan Servicer   top

Once your loan has been originated by our office, the Department of Education will assign your loan to a federal servicer. The servicer assigned to your loan(s) will send you correspondence including disclosure statements that contain loan amounts, interest rates and disbursement dates, repayment information and options regarding loan consolidation.  Always notify your loan servicer with any changes to your personal information such as name, address, or phone number and feel free to contact them with any questions regarding your loan(s).  Contact information for your federal loan servicer can be found by reviewing your loan(s) at www.nslds.ed.gov.


Helpful websites    top