Frequently Asked Questions about Federal Direct Stafford Loans for Students

How do I apply for a Federal Direct Stafford Loan?

The steps to apply are listed on our Loans page.

What do I need to do to be eligible for a Federal Direct Stafford Loan?

Direct Stafford Loan eligibility requirements state that you must:

  • Complete a Free Application for Federal Student Aid (FAFSA) for the appropriate academic year
  • Be a U.S. citizen or eligible non-citizen
  • Be accepted for enrollment in a participating college; or if enrolled, be making satisfactory academic progress
  • Be classified as at least a half-time student working towards a degree or certificate
  • Not be in default on an education loan or owe any educational grant refunds
  • If required, be registered with Selective Service
How much Federal Direct Stafford Loan money can I receive?

Please visit our Loans page for the maximum loan amounts. (Students who need to include parent information on their FAFSA are dependent. Students who do not need to include parent information on their FAFSA are independent.)

If I don't need the maximum Direct Stafford Loan funds in any one semester, how can I reduce my amount?

Penn College will credit your eBill with your maximum Direct Stafford Loan eligibility. You do not have to accept the maximum amount. To cancel any part or all of your Direct Stafford Loan funds, please contact the Financial Aid Office in writing or by e-mail. Your cancellation request must include your full name, student ID number, and the total amount you wish to have cancelled.

What is the difference between subsidized and unsubsidized Federal Direct Stafford Loans?

The federal government pays the interest on subsidized Federal Direct Stafford Loans while you are enrolled at least half-time and during your six-month grace period. You are responsible for the interest on an unsubsidized loan. While you are enrolled, the interest will accrue until repayment begins. Many times, students have both subsidized and unsubsidized Direct Stafford Loans during the same semester.

Am I eligible for a subsidized Direct Stafford Loan?

Subsidized Direct Stafford Loans are awarded on the basis of financial need. Your academic level (freshman, sophomore, etc.), any additional financial aid awards you have, your EFC, and your estimated cost of attendance are all factored into the eligibility decision. The Financial Aid Office strives to maximize the amount of subsidized Direct Stafford Loan funds for all eligible students.

After I submit my Federal Direct Stafford Loan MPN (application), when will Penn College receive my money?

Once you have submitted and correctly completed all of the information required on the Federal Direct Stafford Master Promissory Note (MPN) and scheduled classes (at least 6 credits), the College will verify your enrollment and originate your loan. The disbursement (sending of funds to the College) schedule is based upon federal guidelines that the College must follow. Check your Loan Disclosure Statement.

How will my Federal Direct Stafford Loan be disbursed?

Your Direct Stafford Loan will be disbursed once each semester, but not before classes begin. If you have not completed Federal Direct Stafford Loan Entrance Counseling, your funds will not be disbursed. You will only receive a refund if your student bill shows a credit balance.

For more information, review your Loan Disclosure Statement that you will receive from the Federal Direct Loan Servicer.

Does a Federal Direct Stafford Loan have any fees?

Yes, both subsidized and unsubsidized Direct Stafford Loans have an origination fee, deducted by the U.S. Department of Education, which also determines the fee for each academic year.

I received an award letter from Penn College stating that I will receive $2,750 from my Federal Stafford Loan for my first semester. Why does my student eBill show a smaller credit (amount)?

The U.S. Department of Education deducts an origination fee from the loan proceeds at the time of disbursement, reducing the amount that posts to your eBill. Therefore, the loan amount the College receives on your behalf will be less than the principal you have to repay, because of the fee.

Last semester, I applied for Federal Direct Stafford Loan, and saw the loan amount on my SIS, but I never received a refund. Why not?

You probably did not have a credit balance on your student eBill. Only students with a credit balance can receive refunds. Otherwise, all of your financial aid, including your Direct Stafford Loan, was applied toward the charges on your eBill.

Please note that you must have and activate a PCT OneCard in order to receive a refund. The Bursar's Office provides more information on this refund process.

Why is my Direct Stafford Loan Application described as 'Not Received' on my SIS?

A 'Not Received' status can mean one or both of the following:

  1. The U.S. Department of Education does not have a valid Direct Stafford Loan Master Promissory Note (MPN) for you, or
  2. Penn College has not received your FAFSA information for the same academic year.

Learn the steps to apply for a Federal Direct Stafford Loan.

When must I begin to pay back my Federal Direct Stafford Loan?

Your loan will remain in deferment as long as you are enrolled at least half-time, and for a six-month grace period afterwards. You will begin repaying your loan six months after you graduate, withdraw, stop attending, or fall below half-time enrollment.

Is there a lifetime limit on how much Federal Direct Stafford Loan funding I can receive?

Yes. That limit (referred to as Aggregate Loan Limit) is $31,000 for dependent students (no more than $23,000 of which can be subsidized) and $57,500 for independent students (no more than $23,000 of which can be subsidized). After undergraduate students reach that limit, they cannot receive additional Direct Stafford Loan funds.

What is NSLDS?

NSLDS is the National Student Loan Data System, a central database of student aid maintained by the U.S. Department of Education. NSLDS allows you to access information about your Federal Loan(s), outstanding balances, loan statuses, and disbursements. Information about the Federal Pell Grant and other U.S. Department of Education aid programs are also on record at NSLDS. [See NSLDS FAQs from the U.S. Department of Education.]

You need your federal PIN to access your records at the secure NSLDS site.

View our Loans page for additional information about Federal Direct Stafford and other types of loans.

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