Federal Stafford Loan

Beginning 2009-10 Puget Sound will transition to the Federal Direct Student Loan program. Under this program the federal government serves as the lender.

There are two types of Federal Stafford loans.

• Subsidized Stafford loans are need-based loans. The government pays the interest on these loans while a student is enrolled at least half-time, and for an additional six-month grace period after a student leaves school. The interest rate for undergraduate loans disbursed after June 30, 2009 is fixed at 5.6%. Loans for graduate students have a fixed rate of 6.8%.
  
• Unsubsidized Stafford loans are not need-based loans. The interest begins accumulating as soon as the funds are disbursed on your behalf. Interest may be paid on a monthly basis or capitalized so that payments do not need to be made while a student is enrolled. Capitalization results in the interest being added to the principal creating a higher loan to repay after graduation. The interest rate for these loans is fixed at 6.8%.

Stafford Loan Application Processes
Your Financial Aid Award Notice specifies the amount of your Stafford Loan eligibility. You may reduce or decline the offered amount by notifying Student Financial Services.

First Time Stafford Loan Borrowers
Before you can receive your loan funds, you must complete an online loan entrance counseling session and sign a Master Promissory Note (MPN).

Continuing Stafford Loan Borrowers
Because Puget Sound is transitioning to the Direct Loan program and the federal government will now be serving as the lender, all continuing students must sign a new Master Promissory Note (MPN) for 2009-10. Continuing students are also encouraged to complete a new loan counseling session, although it is not required.

Disbursement of Stafford Loan Funds
The annual loan amount you borrow for the year is divided equally between fall semester and spring semester. A fee of 0.5% will be subtracted from each disbursement to cover the loan origination fee for loans disbursed after June 30, 2009. Stafford loans are received by the university through Electronic Fund Transfer (EFT) and are credited to your student account automatically. Student Financial Services will notify you when funds are received on your behalf and credited to your student account.

Repayment of the Stafford Loan
Repayment begins six months after graduation or when dropping below half-time enrollment.

Students wishing to borrow a Federal Stafford Loan for the 2008-09 academic year should contact Student Financial Services at 253.879.3214.