The Federal Stafford loan is a low-interest education loan designed for undergraduate and graduate students. This is a government loan meaning that it is guaranteed (or insured) by the Federal government, and is the cornerstone to any borrowing that takes place at Villanova University.

Stafford loans are an extremely popular and cost-effective source of education funds.

Subsidized vs. Unsubsidized Stafford Loans
There are two types of Stafford loans: subsidized and unsubsidized. Depending on the information provided on the FAFSA, a student may be eligible for one or both loans. The school will specify the loan type for which the student should apply.

Subsidized Federal Stafford loan: Awarded on the basis of financial need. The government pays the interest while the student is in school, in deferment, and during the grace period before repayment begins.

Unsubsidized Federal Stafford loan: Available to all students regardless of income. Student is responsible for all interest that accrues while they are in school, in deferment, and during their grace period.

Borrowing Limits
Loan amounts vary depending on a student's year in school and whether they are considered a financially dependent or independent student. This chart lists the borrowing limits.

Interest Rates and Fees
The interest rate will be fixed at 6.80% for all new loans guaranteed on or after July 1, 2006. As of July 1, 2008, the rate for unsubsidized Stafford loans for undergraduate students will drop to 6%; rates for all other Stafford loans will remain at 6.80%.

Typically, two fees are deducted from the loan funds and are included in the amount a student will pay back. The U.S. Department of Education charges an origination fee of 1% and the loan guarantor charges a Federal default fee of 1%.

However, PNC Bank participates in the KeystoneBEST Stafford Loan Program, which means if you select PNC Bank as your lender, you will pay no up-front fees.

Repayment
Once you drop below half-time status, graduate, withdraw or leave school, you will be granted a six-month grace period. During your grace period, American Education Services (AES) will provide you with a repayment disclosure statement containing your repayment terms, including the amount of your monthly payment and the due date of your first payment. Repayment of the Federal Stafford loan begins at the end of this six-month grace period and usually extends up to ten years. Generally, the minimum monthly payment is $50; however, you should talk to AES to determine other flexible repayment terms that might be available.

Borrower Benefits through KeystoneBEST:

• No default fees
• A 0.25% interest rate reduction for automatic payment deduction from any bank account**
• Combined billing for multiple loans
• Single point of customer service for the life of the loan

** To maintain the interest rate reduction benefit, all payments must be directly debited from a bank account. If automatic payment is stopped, the rate reduction benefit is lost and the rate will revert to the government-set rate for all Federal Stafford Loans. Benefits are effective for loans disbursed on or after 5/23/08.

Application Deadline
There are no specific deadlines, but it's a good idea to complete the Federal Stafford Loan application process before June 30. Applying for the loan late may delay your funds and possibly cause you to incur University late fees, if your bills are not paid timely.

Please Note: All first-time Federal Stafford loan borrowers must complete entrance counseling before their loan proceeds will be disbursed.

If you have any questions regarding your student account, or to make sure that all your Financial Aid requirements are complete, log into NOVASIS.