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Loans
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1. What is a FFELP loan?At the University of Mississippi Federal Stafford and PLUS Loans are offered through the Federal Family Educational Loan Program (FFELP). Private lenders fund the loan. The federal government guarantees the loan against default, which allows lenders to offer loans at very attractive interest rates. These loans are sometimes referred to as Federal government guaranteed student loans.
2. What is the difference between the Subsidized and Unsubsidized Stafford Loan?A Stafford Loan is a government-guaranteed loan available to students. There are two types of Stafford loans: subsidized and unsubsidized. With a subsidized Stafford, the government pays the interest while you're in school. With an unsubsidized Stafford, you are responsible for the interest that accrues while you are in school. You can either elect to pay the interest while you are in school or defer it until after graduation. You should note that if you defer the interest, it will be capitalized upon graduation and will raise the overall cost of your loan.
3. What are some benefits of the Stafford Loan?
4. How much can I borrow with a Stafford?Your eligibility is determined by the Office of Financial Aid. You will be notified of the exact amount you can borrow in the Financial Aid Award Notification. You can never borrow more than the cost of education, less other financial aid received. Below are the maximum amounts you may borrow. If dependent, your combined subsidized and unsubsidized Stafford annual eligibility is as follows:
If independent, your subsidized and unsubsidized Stafford annual eligibility is as follows:
5. What is the interest rate on a Stafford Loan?During the in-school period, the fixed rate is currently 6.0% for Subsidized Stafford loans for Undergraduates. For Graduate students and all Unsubsidized Stafford loans, the rate is 6.8%. When repayment begins after graduation or dropping below half-time status, the rate for all students goes to 7.22%.
6. If I do not graduate, do I have to repay my Stafford Loan?Yes. The Stafford Loan, like any other loan, must be repaid.
7. Who is my lender?The "lender" is the lending institution (bank, credit union, etc.) that makes your student loan funds available to you. Students should refer to their award notification, promissory note, or notice of guarantee to find the name of their lending institution.
8. What is loan counseling and why must I complete this process?Loan counseling is required by federal regulations for all first-time borrowers at a school. The session gives an overview of the federal loan program, discussing the types of loans, interest rates, borrower rights and responsibilities, etc. This obligation can be met via online session.
9. How long after I've been awarded will I get the promissory note?First we must have an accepted award letter, loan counseling, and a designated lender in order to transmit the data to the lender or guarantee agency. An electronic promissory note can be completed online. The student completes the note and submits it back to their lender or guarantee agency. Then the lender will send the funds to the student's account in the Bursar's Office. All of this should take approximately 1 week.
10. What are some of the benefits of the PLUS Loan?
11. How much can I borrow with a Parent PLUS Loan?The parent can borrow up to the cost of attendance, minus any other financial aid your child receives. The cost of attendance is determined by the school's financial aid office, and usually includes tuition, room and board, books, living costs and transportation expenses.
12. What is the interest rate on a Parent and Graduate PLUS Loan?The rate is fixed, and is currently 8.5%.
13. What if I am turned down for a Parent PLUS Loan?Your lender will notify both you and the Office of Financial Aid of their credit decision. If you are denied, the Office of Financial Aid will contact you to discuss other borrowing options.
14. Who receives the check for my Parent PLUS Loan?The money goes to the school, which first applies the funds to the student's outstanding balance. If a refund is due, it will be mailed or directly deposited to the parent borrower by the Bursar.
15. Why was my loan sent back to the bank?Students must meet certain requirements within 3 days after their loan funds arrive at the school. If these requirements are not met within that time frame, we have to return funds to the lender.
16. How can I get an In-school Deferment on repayment of my loan?Request the deferment form from your bank and have our Registrar's Office complete it, then return it to the bank. Continue to make all payments until the bank sends you confirmation of your deferment.
17. If I am in default on a previous loan, what documents are needed to clear the default?A letter is required from the agency, or holder of the defaulted loan, stating that the default has been cleared.
18. If I take a leave of absence, do I have to start repaying my loans?Not immediately. The Federal Stafford Loans and Graduate PLUS Loans have a grace period of six months and the Federal Perkins and McKinstry Loans have a grace period of nine months before the student must begin repaying the loan. When you take a leave of absence, you will not have to repay your loan until the grace period is used up. If you use up the grace period, however, you will have to begin repaying your loan immediately when you graduate. It is possible to request an extension to the grace period, but this must be done before the grace period has ended. If your grace period has run out in the middle of your leave, you will have to make a payment on your student loans.
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