Federal Family Education Loans

How to Apply

Award Procedure:
If the lender agrees to make the loan, the application is forwarded to the guarantor for insurance. The lender disburses the proceeds of a Stafford, Unsubsidized Stafford, or PLUS loan to the school or, if the student is attending a foreign school, directly to the borrower. Consolidation Loan proceeds are disbursed directly to the holders of the loans selected for consolidation. In most cases, a loan must be disbursed in more than one installment over the length of the period of enrollment for which the loan was intended, based on a disbursement schedule provided to the lender by the school on behalf of the borrower. This multiple disbursement requirement does not apply to Consolidation Loans. The borrower may be required to pay an insurance premium of up to one percent of the principal amount of a subsidized Stafford Loan, Unsubsidized Stafford Loan, or PLUS Loan. The charging of the insurance premium and the amount is determined by the guarantor. In addition, for a Stafford, Unsubsidized Stafford, or PLUS loan, the borrower is required to pay a three percent "origination fee" (on loans disbursed on or after July 1, 1994) which is used to help defray program costs. All of these fees are normally deducted proportionately from each disbursement of the loan proceeds. Under the Higher Education Reconciliation Act, these fees would be reduced to 2 percent on Jyly 1, 2006; 1.5 percent on July 1, 2007; 1 percent on July 1, 2008; and 0.5 percent on July 1, 2009. The fees would be eliminated as of July 1, 2010.

Preapplication Coordination:
Information regarding application procedures may be obtained from lenders, schools, the U. S. Department of Education, States, or guaranty agencies. This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under E.O. 12372.

Application Procedure:
Applications for the Federal Stafford Loan, Unsubsidized Stafford Loan, and PLUS Loan programs are obtained from a participating lender, guaranty agency, or school. Consolidation Loan applications are obtained from lenders. The borrower completes his or her portion of a Stafford, Unsubsidized Stafford, or PLUS loan application and submits it to the school. The school must certify the student meets eligibility requirements for the loan, including a certification that the student is enrolled, or accepted for enrollment as at least a half-time student, and that the student is making satisfactory progress. The school must also certify the type and amount of loan the student is eligible to receive. The lender then completes its portion of the application and forwards it to the guarantor for commitment. In some States, the guarantor issues the notice of guarantee prior to sending the application to the lender. This program is excluded from coverage under OMB Circular No. A-110.

Deadlines:
None.

Range of Approval / Disapproval Time:
Varies.

Appeals:
Not applicable.

Renewals:
Not applicable.