Here is a brief summary of several different types of loans. Paperwork is available through the Financial Aid Office or participating lenders.

FEDERAL STAFFORD LOAN (for students)

• Loan that a student can borrow from a participating lender.
• Student must complete the Free Application for Federal Student Aid (FAFSA) in order for the Financial Aid Office to determine the student’s eligibility.
• Students are notified of their loan eligibility on their award letter.
• Student must be enrolled at least half-time; be US citizen or eligible non-citizen; be maintaining satisfactory academic progress. 
• Eligibility is also affected by cost of attendance.
• Student's financial need or lack of need (as determined by the Financial Aid Office using the results of the FAFSA) dictates whether the loan is subsidized or unsubsidized. Interest is paid by the federal government on subsidized loans while the student is enrolled at least half time and during the student’s six month grace period.
• Annual loan limits are determined by grade level and dependency status:
  - Dependent undergraduate students: freshman: $3,500; sophomore: $4,500; and junior/seniors $5,500.
  - Independent undergraduate students: freshman: $7,500 (no more than $3,500 subsidized); sophomore: $8,500 (no more than $4,500 subsidized); and junior/seniors $10,500 (no more than $5,500 subsidized).
  - Graduate students: $20,500 (no more than $8,500 subsidized).
• For undergraduate students, subsidized Federal Stafford Loans first disbursed on or after July 1, 2008, have a fixed interest rate of 6.0%. Unsubsidized Federal Stafford Loans have a fixed rate of 6.8%
• For graduate students, all Stafford Loans (subsidized and unsubsidized) have a fixed interest rate of 6.8%.
• Loan fees may be deducted prior to disbursement (effective 7/1/08, maximum 2% of principal)
• Loan repayment begins six months after the student graduates, falls below half-time enrollment, or withdraws from school.
• No prepayment penalties.
• First time borrowers of Stafford Loans are required to complete entrance loan counseling before receiving their loan funds. Entrance counseling can be done at www.mappingyourfuture.org
• For more information about participating lenders, see Northwood’s suggested lender list.

FEDERAL PLUS LOAN (for parents)

• Loan that a parent can borrow on behalf of the student.
• Student must be enrolled at least half-time; be considered dependent for financial aid purposes; be a US citizen or eligible non-citizen; be maintaining satisfactory academic progress.
• Parent must be a credit worthy US citizen or eligible non-citizen.
• Maximum loan amount is equal to the cost of attendance minus financial aid.
• The current interest rate is a fixed rate of 8.5%.
• Loan fees may be deducted prior to disbursement (maximum 4% of principal)
• Repayment begins 60 days after the loan is fully disbursed. Some lenders provide deferment.
• No prepayment penalties.
• For more information about participating lenders, see Northwood’s suggested lender list.

ALTERNATIVE LOANS

• Not a federal loan program.
• Loan terms and conditions vary by lender.
• Credit worthy co-signor may be required. 
• Costs to the borrower are normally higher than those incurred through the federal loan programs.
• These loans are generally used as a loan of last resort.
• For more information about participating lenders, see Northwood’s suggested lender list.