1 AAA.com/FinancialAid Financial Aid Guide AAA Student Lending Program Your trusted resource for student lending
2 Important Deadline Dates October 1 First available date to complete the CSS PROFILE (www.collegeboard.com) January 1 FAFSA available to be filled out at February 15 Connecticut state FAFSA completion deadline March 1 RI state FAFSA completion deadline May 1 Massachusetts, Maine, New Hampshire and New York state FAFSA completion deadline June 30 Federal FAFSA completion deadline Please remember each college has its own deadline to apply for financial aid. To be eligible for financial aid, remember to contact each college you are applying to and submit your FAFSA and other documents they require by their deadline.
3 AAA.com/FinancialAid Table of Contents Financial Aid Basics 2 Types of Financial Aid Get Ready to Apply Key Deadlines How to Apply After You Apply for Financial Aid 8 Financial Aid Award Letters Arrive Award Letter Breakdown How Awards are Determined Paying Tuition 12 Core Principles Funding Options Federal Student Loans 14 Federal Loan Types The Perkins Loan The Stafford Loan The PLUS Loan The GradPLUS Loan Private Student Loans 20 Private Loan Types Eligibility Borrowing Limits How to Save Interest and Other Charges Repayment 24 Benefits of Consolidation Combining Student Loan Debt Interest Rate Estimated Payments Resources and Services 26 FAFSA Filing Assistance Guidance Counselors Scholarship Information Webinar and Seminar Series College Tours Newsletter Glossary 28
4 In this chapter: Types of Financial Aid 1This guide has been created to help families understand the types of aid available and Get Ready to Apply Key Deadlines How to Apply how to properly apply for financial aid. Additionally, this guide takes a close look at all college funding options available, as well as ideas on how to reduce college costs. You will not receive financial aid if you do not apply. Each year, billions of dollars are available to help families pay for college tuition. This aid comes in a variety of forms and from a variety of sources including the Federal government, states, colleges, and private institutions. Financial Aid Basics Types of Financial Aid Gift Aid Grants and scholarships: Money that does not need to be repaid. Keep in mind some scholarships could have a service component or may be taxable. You can find more information on scholarships at Self-Help Aid Loans: Borrowed money that is usually repaid with interest by students and/or parents. Loans can be from Federal or private lending sources. Learn more about your loan options in the Federal and Private Student Loan Sections of this guide or at Work-Study: Money a student can earn through on- or off-campus employment. This money usually helps students pay for indirect expenses and should not be considered as a resource to pay tuition. 2
5 AAA.com/FinancialAid Financial Aid Eligibility To be eligible, the student must: Be a U.S. citizen or eligible non-citizen* with valid Social Security number. Be working toward a degree or certificate in an eligible program*. Be qualified to obtain post-secondary education. This can mean any of the following: TIP: Students with financial need usually receive a combination of both types of financial aid. (Detailed on page 2) Having a high school diploma or a GED certificate. Meeting other standards established by your state. Completing a home school program approved by the state. Register with Selective Service, if you re a male between ages ** Maintain Satisfactory Academic Progress (SAP) as determined by your college. *See glossary for additional details. **www.sss.gov FAFSA Defined FAFSA stands for Free Application for Federal Student Aid. This is the gateway application to all financial aid and should be completed by each family every year. It can be filed online. In this guide you will learn how, when, and where to file. 3
6 Get Ready to Apply The senior year of high school is filled with a host of activities and deadlines, so it is best to prepare to apply for financial aid in the junior year or the summer before the senior year. These simple steps below can help. TIP: Remember financial aid is awarded on a first-come, first-served basis. The sooner you submit your documents the better. 1 2 Create a financial aid folder for all your documents. You will need to access these documents for the next four years or more. Keeping your documents in one place will make applying each year easier. Apply for your Federal PIN (Personal Identification Number) ID at Each student and parent will need their own unique PIN. PIN IDs can be used to electronically sign your Free Application for Federal Student Aid (FAFSA) as well as any Federal student loan Master Promissory Notes for parents and students. 3 Research deadlines for each college a student applies to. Make sure to inquire about additional financial aid paperwork required by each college. Some Private colleges may also require submission of the CSS PROFILE, or an institutional financial aid form. Most colleges will post this information on their financial aid web page. It is extremely important to submit ALL the financial aid documents required by each college. Use a calendar or spreadsheet to keep track of all deadlines. The FAFSA is designed to instruct the student on how to complete the form, but since parents usually end up filling it out, this can make for some confusing reading in the instructions. However, it is a good idea for parents to fill it out or at least review the information before it is submitted because it is a complex form. A small mistake could have a big impact on the amount of aid offered. Note: The majority of students under the age of 24 will be considered a dependent by the Federal government and are required to report their parents financial information on the FAFSA and other financial aid documents. For independent/dependent guidelines, see the glossary on page * Note: If you opted to receive your PIN by , you should add to your address book or safe list to help avoid delivery problems.
7 AAA.com/FinancialAid Key Deadlines FAFSA deadlines for each state can be found at To the right are a few deadlines for our region. Remember each college may have their own deadline which may be earlier than the state deadline. Adhere to the earliest deadline, not the student s state of residency. Key Deadlines RI March 1 MA, ME, FL May 1 NH, NY, PA CT February 15 VT NJ June 1 No state deadline, check with your college for dates. TIP: For families using the paper FAFSA application; remember the form is color-coded. Purple is for parental information and orange is for student information. These colors may change from year to year. How to Apply for Financial Aid All colleges require the FAFSA in order to offer any Federal financial aid. Be sure to apply early, and adhere to both state and college deadlines, as most financial aid is limited. Remember, some financial aid is administered on a first-come, first-served basis. If your student selects colleges that require the CSS PROFILE, you can fill out and submit this document at There is a fee associated with the PROFILE which is charged by The College Board. Some families may qualify for a fee waiver; ask your high school guidance counselor for details. If the institution has requested additional required financial aid documents of their own, be sure to submit them on time. Submit the FAFSA document as soon as possible after January 1 st. The data you submit on the FAFSA will be used by the government to calculate your family s Expected Family Contribution (EFC). The EFC helps to measure your family s financial situation. Each college you elect to receive your FAFSA will use the data to create a Financial Aid Award Letter, which you will receive in the spring. There are five simple steps to submit the FAFSA efficiently, detailed on the next page. 5
8 A quick glance. 1. Gather Documents 2. Print Worksheet 3. File FAFSA 4. Receive EFC 5. Receive SAR 1Gather the necessary documents. Social Security numbers Driver s license (if any) Most recent W-2 Forms and other records of income earned Most recent Federal Income Tax Return 1040, 1040A, 1040EZ, etc. including any foreign tax returns Most recent untaxed income records Social Security, Temporary Assistance to Needy Families, welfare, or veterans benefits records Most recent bank statements Most recent business and investment information, business and farm records, stock, bond, and other investment records Alien registration number or permanent resident card (see eligible non-citizen in glossary on page 29 for details) It is highly recommended to submit your FAFSA online because it is a more timely submission 2 3 Dependent students will need the above listed documents for both parents and students. Independent students will only need their own documents and/or your spouse s information. For students with divorced parents, use the information of the parent you lived with most in the last 12 months even if the student is not claimed as dependent on taxes. If the parent has remarried, you will need to include the stepparent s information. Print the FAFSA online worksheet at Printing and pre-filling the FAFSA worksheet can save a lot of time when you file your FAFSA online. File the FAFSA online. It is highly recommended to submit your FAFSA online because it is a more timely submission, offers built-in edits, more detailed instruction, and provides for an easy renewal process each year. You can apply online at If you have questions or need help filing the FAFSA, contact the AAA Student Lending Program at
9 AAA.com/FinancialAid 4 Receive your Expected Family Contribution (EFC): The EFC is the amount that your family is expected to contribute to the student s education for the academic year. This is NOT the amount you will pay. This EFC is calculated from the data reported on your FAFSA. The family contribution is determined by a formula (Federal Methodology Need Analysis Formula) approved by Congress. Colleges use this formula to determine what sources of aid the family qualifies for, including grants, scholarships, work-study, and loan programs. 5 Receive your Student Aid Report (SAR): 3-5 days after submitting an online FAFSA and signing with your PIN ID with valid address The SAR allows you to correct any mistakes, update any changes in financial circumstances or add new colleges where you would like your information to be sent. An electronic copy of your SAR is also made available to the colleges you ve listed on your FAFSA. Study Abroad: Many U.S. students study abroad each year. The Higher Education Act (HEA) of 1992 allows a student to receive financial aid for study abroad at qualified colleges. Most foreign colleges require U.S. students to mail a copy of their SAR to the foreign college. Foreign colleges typically cannot receive your Student Aid Report (SAR) electronically. Check with the foreign colleges you listed on the FAFSA to see if they will need a paper copy of the SAR. This will start the financial aid process. Remember, financial aid for foreign colleges takes much longer to process; therefore it is a good idea to start early. TIP: The Higher Education Act (HEA) of 1992 allows a student to receive financial aid for study abroad at qualified colleges. 7
10 2 In this chapter: Award Letters Arrive Award Letter Breakdown How Awards are Determined After You Apply for Financial Aid The data you submitted on the FAFSA is used to calculate your family s EFC (Expected Family Contribution). This information is sent to all colleges listed on the FAFSA. Most colleges receive this information electronically. To determine your financial aid eligibility, each college will use the FAFSA data, and sometimes the CSS PROFILE data, and/or institutional data collected. Each college will then compile a Financial Aid Award Letter. Financial Aid Award Letters Arrive TIP: Financial Aid Award Letters may come via: 1. Mail Online with College These letters will be sent to the students. After completing all the financial aid documents required by each college, you will receive a Financial Aid Award Letter from each college. Your letter may come via U.S. mail, , or for some colleges, you will need to access it online. To make an informed decision, you may want to wait for all your award letters before you accept one (but be careful not to miss an acceptance deadline from one college while waiting for another to reply). This will allow your family the opportunity to compare the aid offers side-by-side. Certainly the least expensive may not be the most appropriate college for your student. All factors should be considered including: costs, academic challenge, college setting, social fit, etc. Think about attending the AAA Student Lending Webinar titled Financial Aid Award Letters. Register at Award Letter Breakdown Financial Aid Award Letters are not standardized. Some letters are very clear and contain all the information you need such as: scholarships, grants, loans, tuition costs, and instructions on how to appeal, accept, or deny the awards. Others may not include tuition costs or may only offer generic tuition costs. All award letters should contain Gift Aid (grants and scholarships) and Self-Help Aid (work-study and loans) if they are being offered to your student. 8
11 AAA.com/FinancialAid XXX University 123 School Street Financial Aid Award Letter Anywhere, State James Smith Student ID: Dear James, Sample Award Date: 03/01/15 After a careful and thorough review of your financial aid application, XXX University is pleased to offer you the following financial aid assistance. Award Fall Spring Total The XXX Grant $6,000 $6,000 $12,000 Federal Perkins Loan $750 $750 $1,500 Federal Stafford Loan Subsidized* $1,750 $1,750 $3,500 Unsubsidized* $2,000 $2,000 $4,000 Federal Work-Study $900 $900 $1,800 $22,800 This award is based on estimates of you and your parent(s) income reported on the FAFSA. The Office of Financial Aid reserves the right to modify or cancel the financial aid award(s) listed at any time due to lack of satisfactory academic progress, changes in enrollment, eligibility, financial misrepresentation, or any other reason as specified by federal, state, or institutional regulations or policies. Kindly check the appropriate response below; then sign, date, and return one copy of this letter. Although your response must be postmarked by May 1, we would appreciate receiving it as soon as possible. I accept the award(s) indicated above and will enroll at XXX University I decline some or all of the award(s) offered but still plan to attend XXX University I fully decline the award(s) because I will not attend XXX University My signature below certifies that I have read the Financial Aid Guide, understand the terms and conditions of this award letter, and give XXX University permission to apply any Federal financial aid I may receive to any and all expenses charged to my student account. I understand I may rescind or withhold such authorization by so notifying the University Bursar in writing. TIP: Student Signature Date Financial Aid Award Letters are not standardized. *See glossary for details. 9
12 More on Work-Study: When you fill out the FAFSA you will be asked if your student is interested in workstudy. It is a good idea to say yes to be sure it is available if you are eligible, although you are not obligated to accept. A student will not be eligible for these programs if you do not select it on your FAFSA application. The Gift Aid portion of the award letter will itemize all grants and scholarships your student is being offered. Some may be taxable or conditional; contact your financial advisor, Financial Aid Office or refer to IRS publication 970 at for details. Private scholarships your student receives outside of the college will not be listed, but should be reported to the college. Grants, scholarships and awards are considered free monies. Self-Help Aid is money you earn or borrow. The Federal Work-Study Program is one way your student may be able to earn money for college expenses. It is important NOT to include work-study as a source to pay tuition. It will be listed on your award letter; however these funds are typically used for personal expenses. Self-Help Aid also includes loans which are usually repaid with interest. Colleges may list both Federal and Private loans on award letters. It is important to use all your Federal loan sources before considering any Private loan options. Federal student loans in general offer more protection and repayment options for students and parents. To learn more about Federal loans, refer to page 14 or log on to To learn more about Private student loans offered through the AAA Student Lending Program, refer to page 20 or log on to You may also contact the AAA Student Lending Program for help understanding loan terms and conditions at Ask about benefits for students and parents available through the AAA Student Lending Program. There are certain Federal programs available to help students entering particular professions. Learn more about Federal loan reward programs at Special Circumstances Sometimes families have financial concerns that are not evident simply by analyzing their FAFSA data. In this case, a family should consider appealing their Financial Aid Award Letter. Most colleges have appeal policies and procedures in place. It is important to submit your appeal in writing. An appeal is serious and should only be considered under extenuating circumstances such as long-term unemployment, unusual medical bills, or other situations that have impacted or will impact your family s finances. The AAA Student Lending Program Webinar titled Financial Aid Award Letters reviews types of appeals in detail. Go to to register. 10
13 AAA.com/FinancialAid How Financial Aid Awards are Determined The data you submit on the FAFSA is used to calculate your family s EFC. For colleges that request additional financial aid documents such as the CSS PROFILE or institutional forms, this data will also be considered when determining aid. Financial aid for most Federal programs is awarded based on need, except for the unsubsidized Federal Stafford Loan and Federal PLUS Loan. The EFC is a measure of your family s financial strength and indicates how much money your family is expected to contribute to your student s education for one academic year. This information is sent to each college you listed on the FAFSA form. Remember, if you are an independent student (see glossary for dependency information) your parents income and assets will not be used to calculate your EFC. Your EFC is calculated according to a formula established by law. Below are the factors considered in the calculation: Total Income, which includes Net Assets for parents and student earned income for parents and student. which includes: cash on hand, savings, Remember, if you are an independent checking, stocks, bonds, investments, student you will not include your CDs, trust funds, and equity in real parents income. Untaxed income and estate outside of the family home and benefits received includes retirement farm equity. contributions made during prior year Family Size. (not total value of account), social security, public assistance, etc. Family Members in College, not including parents. Age of Older Parent. FAFSA Asset* College Savings Plans such as Coverdell savings accounts, 529 college savings plans and the refund value of 529 prepaid tuition plans should be reported as follows: For a student who does not report parental information, the accounts owned by the student (and the student s spouse) are reported as student investments. For a student who must report parental information, accounts are reported as parental investments, including all accounts owned by the student and all accounts owned by the parents for any member of the household. Small Business does not include the value of a small business if your family owns and controls more than 50 percent of the business and the business has 100 or fewer full-time or full-time equivalent employees. For small business value, your family includes (1) persons directly related to you, such as a parent, sister or cousin, or (2) persons who are or were related to you by marriage, such as a spouse, stepparent or sister-in-law. Financial aid for most Federal programs are To learn more on this subject go to awarded based on need *Source: U.S. Department of Education 11
14 3 In this chapter: Core Principles Funding Options Paying Tuition The AAA Student Lending Program is committed to educating families about financial aid as well as how to use low-cost funding options when paying tuition. Student loan debt is an ever-increasing concern for parents and students. Making good choices today can make all the difference when it is time to repay your student loans. We offer seminars, webinars, online tools and resources and access to Educational Loan Specialists to help families navigate financial aid and college funding options. Making good choices today can make all the difference when it is time to repay your student loans. College Funding Core Principles Funding a college education can be challenging and costly. Below are some suggestions and guidelines to help families focus on using low-cost funding options first. 1 Past income First, consider using savings, college funds, and other investments. Check with your financial advisors to ensure you are not using investments which carry penalties or tax implications for your family. 2 Present income Next, consider using a tuition payment plan. Most colleges offer tuition payment plans which allow you to spread annual tuition payments over ten to twelve monthly installments. Most programs charge a small fee to participate. This option allows families to use their monthly cash flow to pay tuition and limit loan debt. As an additional incentive for first-year college students, the Parent PLUS Loan payment is usually not due until March of the following year. However, parents have the option to defer Parent PLUS Loan payments until six months after the student graduates, leaves college or drops below half-time status. 12
15 AAA.com/FinancialAid 3 4 Future income Finally, consider using Federal, institutional, and Private loans offered to parents and students. You should only consider loans after you have maximized all grant and scholarship opportunities. It is important to exhaust all of your Federal loan options first before considering other loans, as they generally offer lower interest rates, flexible repayment options, and more protection. Typically a family will use a variety of loans to meet tuition and educational expenses. Tax deductions and credits Remember, Congress has created substantial tax deductions and credits to help families pay for college. Due to lack of awareness, these tax advantages may go unused. To learn more, print a copy of IRS publication 970 at College Funding Loan Options Once the student chooses their college, you will need to decide how to fund expenses remaining after financial aid has been deducted. After applying the core principles of college funding (previous page), you should consider loan options. Most families will use a combination of loan types, but it is important to stay within the Federal Student Loan Program options when possible. They generally provide better fixed interest rates and more protection such as deferment, forbearance, and cancellation options (see glossary for details). Students can and should use their full Federal Stafford Loan each year. Students that are offered a Federal Perkins Loan on their award letters should also take full advantage of this loan. Most families will use a combination of loan types, but it is important to stay within the Federal Student Loan Program options when possible. Next, parents should consider using the Federal PLUS Loan to fund the remaining cost. The following sections will cover Federal and Private loan types. 13
16 4 In this chapter: Federal Loan Types The Perkins Loan The Stafford Loan The PLUS Loan The GradPLUS Loan Federal Student Loans Federal Student Loan Types Federal interest rates are set by congress and are subject to change every academic year. You can visit or the financial aid section on your college s website to see the exact federal loan rates for the current academic year. Perkins Loan Quick Glance Stafford Loan Quick Glance Borrower Complete FAFSA Interest Rate Type Standard Repayment Term Extended Terms Available Deferment and Forbearance Options Credit Check Consolidation Student Fixed 10 years No Borrower Complete FAFSA Interest Rate Type Standard Repayment Term Extended Terms Available Deferment and Forbearance Options Credit Check Consolidation Student Fixed 10 years No For undergraduate and graduate students Parent PLUS Loan Quick Glance GradPLUS Loan Quick Glance Borrower Complete FAFSA Interest Rate Type Standard Repayment Term Extended Terms Available Deferment and Forbearance Options Credit Check Consolidation Endorser Permitted Parent Typically Fixed 10 years Borrower Complete FAFSA Interest Rate Type Standard Repayment Term Extended Terms Available Deferment and Forbearance Options Credit Check Endorser Permitted Consolidation Student Fixed 10 years For parents (or legal guardians) of undergraduate dependent students For graduate students that have maximized their Stafford Loan 14 See for any updated information.
17 AAA.com/FinancialAid The Federal Perkins Loan A Federal Perkins Loan is a need-based student loan offered by the Department of Education to assist students in funding their undergraduate and graduate education. If your student is eligible for the Federal Perkins Loan, it will be listed on the Financial Aid Award Letter. Availability and the amount offered will vary from college to college. Unlike the Federal Stafford Loan, a student can only sign the Federal Perkins Loan application with the college the student attends. Most colleges will send information on how to secure a Federal Perkins Loan with the Financial Aid Award Letter. TIP: The availability of the Federal Perkins Loan and the amount offered will vary from college to college. Disbursement of Funds: Federal Perkins Loan funds are sent directly to the college in a minimum of two equal payments. Funds are traditionally disbursed in the beginning of the fall semester and then again at the beginning of the spring semester. The Federal Perkins Loan is a Federal program which is administered by the college the student attends. Federal Perkins Loan Grace Period: This loan does not need to be repaid until nine months after the student graduates, drops out, or ceases to be enrolled half-time. Half-time status is established by the college the student is attending. Federal Perkins Loan Interest Rate The Federal Perkins Loan interest rate is established by the Federal government. It is currently a fixed rate of 5 percent. The Federal Perkins Loan is fully subsidized, which means the government will pay the interest while the student is in college. To learn more about the Federal Perkins Loan visit How to Save on the Federal Perkins Loan Under certain circumstances you may be eligible to receive a partial or full discharge or cancellation from the Federal government. Teachers in low-income areas, special education teachers, early intervention professionals, nurses, medical technicians, law enforcement, certain employees of the Head Start program, Vista or Peace Corps volunteers, and military personnel may be eligible. To learn more about discharge or cancellation options visit For the latest information on Perkins Loans:
18 Federal Loan Options The Federal Stafford Loan Access to the Federal Stafford Loan is not dependent upon your family s income. This is a common misconception. All qualified undergraduate and graduate students are eligible to borrow under the Federal Stafford Loan Program. The amount you can borrow is determined by the student s TIP: Stafford Loan If you are a freshman or transfer student, be sure to complete your Financial Aid Entrance Counseling online with your college or Federal loan funds will not disburse. part-time or full-time status and their year in college. Refer to the Federal Stafford Loan Limit Chart below for loan amount. Applicants for these loans are required to complete the FAFSA and sign a Master Promissory Note. Due to legislation change in 2010, all Federal Stafford Loans are required to be secured through the Direct Lending Program. Master Promissory Notes can be signed and entrance counseling can be completed via the website (www.studentloans.gov). Disbursement of Funds: Stafford Loan funds are sent directly to the college in a minimum of two equal payments. Funds are traditionally disbursed in the beginning of the fall semester and then again at the beginning of the spring semester. Colleges using trimesters will have three disbursements. If you applied for extra funds for educational expenses, the college will usually send you a check for the residual after paying tuition, fees, etc. Federal Stafford Loan Limit Chart* Academic Year Dependent Undergraduate Students Independent Undergraduate Students Graduate Students Year 1 $5,500 $9,500 $20,500 Year 2 $6,500 $10,500 Year 3-5 $7,500 $12,500 Maximum Stafford Loan Limits $31,000 $57,500 $138,500** *Loan limits are set by congress and are subject to change. **This includes undergraduate Federal Stafford Loan Debt. For updates see 16
19 Federal Loan Options AAA.com/FinancialAid Federal Stafford Loan Grace Period: This loan does not need to be repaid until six months after the student graduates, drops out, or ceases to be enrolled half-time. Half-time status is established by the college the student is attending. Federal Stafford Loan Interest Rate The Federal Stafford Loan interest rate is established by the Federal government. It is established every academic year (not to exceed 8.5%). However, a portion of your Federal Stafford Loan may be subsidized (determined by the financial data submitted on the FAFSA). For subsidized Federal Stafford Loans the interest rate is generally lower than the unsubsidized, but it is also established every academic year (not to exceed 8.5%). This should be itemized on your Financial Aid Award Letter. of up to $5,000 from the Federal government on any Federal Stafford Loan. Some teachers may also be eligible for loan forgiveness up to $16,000 (available for mathematics, science, and special education teachers under the TEACH GRANT). To qualify, you must not have had an outstanding balance on a Federal Stafford Loan as of October 1, To learn more about discharge or cancellation options visit How to Save Even More on a Federal Stafford Loan The government offers additional ways to save on your Stafford Loan. Borrowers that set up automatic debit payments once in repayment can receive.25% off their Stafford Loan interest rate. How to Save on a Federal Stafford Loan Under certain circumstances you may be eligible to receive a discharge or cancellation Under certain circumstances you may be eligible to receive a discharge or cancellation of up to $5,000 from the federal government For the latest information on Stafford Loans: AAA.com/StaffordLoan 17
20 Federal Loan Options Federal PLUS Loans (Parent Loans for Undergraduate Students) TIP: Federal PLUS Loan If a parent is denied for a Federal PLUS Loan, the student may be eligible for an additional $4,000-5,000 to be added to the student s Federal Stafford Loan. Typically, a school will request a copy of the PLUS Loan denial. Federal Parent PLUS Loan Parents of undergraduate dependent students are eligible to borrow under the Federal PLUS Loan Program. The borrowing limit is determined by the Cost of Attendance (COA) minus other financial aid received. Although it is not a Federal requirement to submit a FAFSA in order to apply for a Federal PLUS Loan, many times it is a school policy. It is always a good idea to submit a FAFSA each year as this will give your student access to the Federal Stafford Loan as well. Federal GradPLUS Loan Graduate and professional students are now eligible to borrow under the Federal GradPLUS Loan Program. The limit is determined by the cost of attendance minus other financial assistance received. Applicants for these loans are required to complete the FAFSA. In addition, they must have applied for their maximum annual Federal Stafford Loan (see Federal Stafford Loan Limit Chart on page 16). Graduate and professional students are now eligible to borrow under the GradPLUS Loan Program. Disbursement of Funds: Federal PLUS Loan funds are most often sent directly to the college in a minimum of two equal payments. Funds are traditionally disbursed in the beginning of the fall semester and then again at the beginning of the spring semester. Colleges using trimesters will have three equal disbursements. If you applied for extra funds for educational expenses the college will usually send you a check for the residual after paying tuition, fees, etc. Federal PLUS Loan Grace Period: For parents of undergraduate students, repayment begins 60 days after the last disbursement, which is typically March. Parents have the option to defer up to six months after a student graduates or leaves school. Repayment of Federal GradPLUS Loans does not begin until 60 days after a student graduates, drops out, or ceases to be enrolled half-time. Half-time status is established by the college the student is attending. Federal GradPLUS borrowers will be given an automatic in-school deferment. 18