How to Obtain a Stafford Loan

Obtaining a Student Loan

Federal Stafford Loan Process

Once your (FAFSA) Free Application for Federal Student Aid, is processed, you will receive a Student Aid Report (SAR) documenting your financial resources and expected family contribution towards educational costs. An electronic copy will be sent to our office.
From the information obtained in the SAR and other supporting documents, we will generate and send you a Financial Aid Award letter documenting the financial aid available to you including Stafford Loan eligibility. The student may accept all or a part of the aid by signing and returning a copy of the Financial Aid Award letter to the Office of Financial Aid. We cannot begin processing your loan until this document is received.
If the student is a first time loan borrower, the student must complete Loan Entrance Counseling on the Web. Once the Financial Aid Award letter has been signed and returned and the Loan Entrance Counseling has been completed, your lender or guarantee agency will send you a school certified Stafford Loan (MPN) Master Promissory Note.
If a student has had loans in the past and has attended the same university, it will not be necessary for you to sign another MPN for at least 10 years. However, new borrowers will receive their MPN in the mail. Once a student has completed the MPN, detach and keep the borrower copy. Return the other copies to the lender or guarantor agency.
Once the guarantee agency approves your loan, you will receive a Notice of Guarantee and Disclosure Statement (one document). This is your notice of approval, and it contains essential information about the terms and conditions of your loan. It also tells you the amount of your loan and an estimated date for the arrival of funds. It explains the possible actions that can be taken against the student if they do not repay the loan. Students should read the form carefully.
Disbursements of Funds - A check or Electronic Funds Transfer (EFT) will be sent directly to our school. The amount of the proceeds will be the loan amount less the fees. The loan funds will be sent in one or two disbursements. You will pick up your loan funds at the Cashier's Window in the Administration Building. If you are not using a preferred lender, your funds will be mailed to us in the form of a paper check and this process may vary.
NOTE: schools can refuse to certify a loan application or can certify a loan for a lesser amount than the student would otherwise be eligible for, if the school documents its reason for its action and explains its reason in writing. The school's decision is final and cannot be appealed to the U.S. Dept. Of Education.
Loan applications will be approved by both the lender and a guarantor. Students must use the same lender and guarantor each time a loan is applied for.
Loan checks or wire transfers are sent directly to the school. The amount of the loan (minus insurance fees) will be sent in two separate checks or wire transfers. None of these installments may exceed more than one half of the total loan amount. The second disbursement of the loan may not be disbursed until one half of the period of enrollment for which the loan is intended has elapsed.
The student is required to go to the Office of Finance to sign checks and apply the money to any unpaid school bills.
Students who have questions about their loan, or decide that they do not need the loan, should contact the lender before they sign the loan check or wire transfer form. This will give the student the option of canceling the loan without penalty.
Student loans are to be used only for educational expenses at the college that completes the application. As such, the proceeds from the checks will be applied first to any outstanding debt you have at Arkansas State University. A check will be processed for any remaining funds and will be available at the Office of Finance.

Keep a copy of all documents in one file: a copy of each loan application, each notice of loan disclosure, and any other correspondence received about your loan or other financial aid program.

How much can I borrow?

Borrowing limits are based on your dependency status and year in school. You are considered independent if you:

were born before January 1, 1979; or
will be working on a degree beyond a bachelor's degree during the school year; or as of today, are married; or
have children who receive more than half of their support from you; or
have dependents (other than your children or spouse) who live with you and receive more than half of their support from you, now and through June 30, 2003 or
are an orphan or ward of the court or were a ward of the court until age 18; or
are a veteran of the U.S. Armed Forces

If you do not meet any of the above criteria, you are considered a dependent student for financial aid purposes.

You can never borrow more than the cost of education, less other financial aid received (special rules apply for recipients of Montgomery Chapter 30 VA benefits and Americorps benefits). Below are the maximum amounts you may borrow.

If dependent, your combined subsidized and unsubsidized Stafford annual eligibility is as follows:

Student	Freshman	Sophomore	Junior	Senior	Graduate
Subsidized and/or Unsubsidized	$3,500	$4,500	$5,500	$5,500	N/A

Student	Freshman	Sophomore	Junior	Senior	Graduate
Subsidized	$3,500	$4,500	$5,500	$5,500	$8,500
Unsubsidized	$4,000	$4,000	$5,000	$5,000	$12,000
Total	$7,500	$8,500	$10,500	$10,500	$20,500

Typical Repayment Plans:

Total Indebtedness	Number of Payments	Amount of Payment
$3500	65	$50
$4500	120	$53
$7500	120	$88
$10,000	120	$118
$15,000	120	$176