FEDERAL STAFFORD LOANS

There are two types of Federal Stafford loans: 

Subsidized Federal Stafford Loan

A subsidized Stafford Loan is awarded based on financial need. The Federal government pays the interest on these loans while the borrower is in school at least half-time, during the grace period and during periods of deferment.

Unsubsidized Federal Stafford Loan

An unsubsidized Stafford Loan is not awarded based on financial need. Interest accrues from the date of disbursement until the final payment. The borrower can choose to pay the interest monthly or quarterly while in school and during the grace period or can have the interest capitalized and added to the principal amount of the loan.

The total amount of Federal Stafford Loan (Subsidized and Unsubsidized combined) that a student can receive is based upon need (according to FAFSA info) and also the student’s classification. The maximum a student can receive per classification is as follows: Freshmen $5,500, Sophmore $6,500, Junior or Senior $7,500, Graduate $8500.

Independent students or dependent students with a denied Parent Plus Loan can receive additional unsubsidized loans up to $4,000 (freshmen/sophmore), $5,000 (junior/senior) and $12,000 (graduate students).

Maximum Total Debt from Stafford Loan (Effective July 1, 2008)

• $31,000 - dependent undergraduate student (maximum $23,000 subsidized)
• $57,500 - independent undergraduate student and certain dependent undergraduates if a parent is denied a PLUS loan (maximum $23,000 subsidized)
• $138,500 - graduate or professional student (only $65,500 subsidized)

Interest Rate

• Loans obtained prior to July 1, 2006 carry a variable interest rate that is adjusted on July 1 each year. 
• Loans obtained for periods of enrollment beginning on or after July 1, 2006 will have a fixed interest rate of 6.8%. O ver a four-year period beginning July 1, 2008, the interest rate on subsidized Stafford Loans made to undergraduate students will be reduced. The applicable interest rates for loans made during this period are as follows:

These changes apply to subsidized Stafford loans first disbursed on or after July 1 of each year through June 30 of the next year. This change does not affect any prior loans made to borrowers; the terms and interest rates of those loans remain the same. These reduced interest rates apply only to subsidized loans; any unsubsidized Stafford Loan for the same undergraduate borrower would continue to be made at the current fixed interest rate of 6.8 percent. In addition, both subsidized and unsubsidized Stafford Loans for graduate borrowers will continue to have a fixed 6.8 percent interest rate.

Students that have been awarded Federal Stafford Loans (Subsidized or Unsubsidized) must do the following to initiate the loan process:

1. Accept the loan that has been offered as follows:

• Go to www.wku.edu and:
• Click on “Quick Links”
• Select “TopNet”
• Click on “TopNet Log In”
• Enter WKU ID & PIN & select Log In
• Click on “Continue Log In”
• Click on “Student Services”
• Click on “Financial Aid”
• Click on “Award”
• Click on “Accept Award Offer”
• Select “Aid Year” and Submit
• Select Accept or Decline from the drop down box per fund or click on “Accept Full Amount All Awards”
• Click on “Submit Changes”
• Click on “Exit” at the top of the page

• Loan awards can also be accepted by sending an email to fa.awards@wku.edu. If the student wants to accept an amount less than was awarded, it should be indicated in the content of the email.

2. Once the loan has been accepted by the student, WKU will certify the loan by sending information to KHEAA. After WKU has certified the loan (typically 2-3 days after the loan has been accepted), the student should complete the Master Promissory Note (MPN) if one is not already on file by going to www.kheaa.com, clicking on the button “E’Sign My MPN” and proceeding as directed. When completing the MPN, a preferred lender list is provided for your guidance. Once the MPN has been processed the lender will guarantee the loan. The student’s Federal PIN is needed to complete the MPN electronically.

3. First time borrowers must complete an entrance counseling session per federal regulations. This can be done by going to www.kheaa.com, clicking on the oval button “Entrance Interview Counseling” and proceeding as directed. When the counseling session has been completed, the student should make sure that the “Submit” icon has been clicked. It is also recommended that the student print the confirmation page and maintain it for their records.

4. Student loan funds are credited to the student’s account at the beginning of each semester (if guaranteed prior to the start of the semester). For those guaranteed after the start of the semester, the loan funds are credited in the next applicable check cycle. Once the loan funds have credited the student’s account, a residual check is issued for any remaining balance and is mailed to the student. Student loan proceeds for freshmen cannot be disbursed until30 days after the start of the semester per federal regulations. Therefore, freshmen should anticipate a delay in the receipt of loan funds and residual checks.