Beginning with new loans for Spring 2010, Emory & Henry College is moving to the William D. Ford Direct Loan Program for both student Stafford and parent PLUS loans.  This move is based on the continuing credit crunch and pending legislation in Congress moving all postsecondary institutions to the direct loan program. Rather than have our students forced into a last-minute change, we are choosing to make the move now in order to provide the best service to our student and parent borrowers.  The information below reflects current law and regulations and is subject to change based on action by Congress. The most up-to-date information regarding federal loan programs is available at www.studentaid.ed.gov, the Student Aid Portal.  Another excellent resource for information on the federal loan programs is the booklet Your Federal Student Loans, published by the U. S. Department of Education and available online. 

Current student and parent borrowers under the Federal Family Educational Loan Program will have to complete new master promissory notes.  Although not required of student borrowers who have completed entrance counseling in the past, it is recommended that they complete entrance counseling again at the time they complete their new electronic Master Promissory Note. 

Federal Direct Stafford Loan
All undergraduate students can borrow a base amount of Stafford annually which may be subsidized or unsubsidized dependent on need as determined by the FAFSA.

• $3,500 for freshman level of study (0 to 26 credits) for a full academic year;
• $4,500 for sophomore level of study (27 to 56 credits) for a full academic year; and
• $5,500 for each year of junior and senior level of study (57 to 120 credits) for a full academic year.

In addition, all students regardless of dependency status may borrow up to $2,000 unsubsidized Stafford loan each academic year. All independent students, or dependent students whose parents have been denied a parent PLUS loan by a lender, are eligible for an additional $4,000 each year for freshman or sophomore level of study, and $5,000 each year for junior or senior level of study. Graduate level students may also qualify for Stafford loans for half-time enrollment in a graduate program.

Aggregate loan limits do apply. For more information about the Stafford loan program, refer to Student Aid on the Web under Federal Student Aid Programs from the U. S. Department of Education.
Repayment begins no later than six months after dropping below half-time enrollment, withdrawal, or graduation from the college.  Several methods of repayment are available to help borrowers successfully repay their obligation.  See section entitled “Exiting E & H”.

Subsidized Stafford Loan
The following chart represents subsidized interest for undergraduate students, which is fixed for funds drawn within each academic year through repayment of the loan taken in that period.  If not changed by Congress, student loan interest reverts to a fixed rate of 6.8 percent beginning with the award year of 2012-2013.  The subsidy means that the federal government will pay the interest which accrues while the student is enrolled at least half-time in a degree program and continuing through one six-month grace period following a student dropping below half time.  This loan is subject to a one percent federal default fee assessed at time of disbursement. 

Interest Rate Reductions for Undergraduate Subsidized Loans

From Your Federal Student Loans, April, 2009

Unsubsidized Stafford Loan
An unsubsidized Stafford loan is not need based. You will be charged interest from the time the loan is disbursed until it is paid in full at the fixed rate of 6.8 percent. If you allow the interest to accrue (accumulate) while you are in school or during other periods of nonpayment, when you enter repayment it will be capitalized. In other words, the interest will be added to the principal amount of your loan, and additional interest will be based on that higher amount.  This loan is subject to a one percent federal default fee assessed at time of disbursement.