Financial Aid Office
Student & Administrative Services Center, Rm. 1013 · (570) 327-4766 or (800) 367-9222 · Fax: 570.321.5552
Frequently Asked Questions about Federal Stafford Loans for students
- How do I apply for a Stafford Loan?
- What do I have to do to be eligible for a Stafford Loan?
- How much Stafford Loan money can I receive?
- If I don't need the maximum Stafford Loan funds in any one semester, how can I reduce my amount?
- What is the difference between subsidized and unsubsidized Stafford Loans?
- Does Penn College recommend any Stafford Loan lenders?
- After I submit my Stafford Loan MPN (application) when will Penn College receive my money?
- How will my Stafford Loan be disbursed?
- I received an award letter from Penn College stating that I will receive $2,750 from my Stafford Loan for the first semester. Why does my student eBill only show a credit of $2,695?
- Last semester, I applied for a Stafford Loan and saw the loan amount on my SIS, but I never received a refund. Why not?
- When must I begin to pay back my Stafford Loan?
- Is there a lifetime limit on how much Stafford Loan funding I can receive?
- Are there any Stafford Loan forgiveness programs?
Q: How do I apply for a Federal Stafford Loan ?
A: The steps to apply are listed on our Loans page.
If you are a first-time user of the online application process, you will first need to create an account before you proceed to the Master Promissory Note (application). Be sure to read all instructions carefully, have an e-mail address, and remember to write down your user ID and password for future use. Contact AES if you have difficulty completing this online application.
Q: What do I need to do to be eligible for a Federal Stafford Loan?
A: 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
Q: How much Federal Stafford Loan money can I receive?
A: 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.
Q: If I don't need the maximum Stafford Loan funds in any one semester, how can I reduce my amount?
A: Although we credit your eBill with the maximum Stafford Loan amounts, we encourage you to be conscious of keeping your loan debt to a minimum. You do not have to accept the maximum amount. To cancel any part or all of your Stafford Loan funds, please contact the Financial Aid Office.
Q: What is the difference between subsidized and unsubsidized Federal Stafford Loans?
A: The federal government pays the interest on subsidized Federal 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 Stafford Loans during the same semester.
Q: Does Penn College recommend any Federal Stafford Loan lenders?
A: Yes, visit our preferred Federal Stafford Loan Lenders.
Q: After I submit my Federal Stafford Loan MPN (application), when will Penn College receive my money?
A: Once you have submitted and correctly filled out all of the information required on the Federal Stafford Master Promissory Note (MPN) and scheduled classes (at least 6 credits) the College will verify your enrollment and certify your loan. The disbursement (sending of funds to the College) schedule is based upon federal guidelines that the College must follow. Check your Loan Guaranty Statement.
Q: How will my Federal Stafford Loan be disbursed?
A: Your Stafford Loan will be disbursed once each semester, but not before classes begin. If you have not completed Federal 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 Guaranty Statement that you will receive from your Loan Guarantor.
Q: I received an award letter from Penn College stating that I will receive $2,750 from my Federal Stafford Loan for the first semester. Why does my student eBill only show a credit of $2,695?
A: Stafford Loan lenders may charge a processing fee, up to 2%, which is deducted from each loan disbursement. We do not always know which lenders withhold this fee. Therefore, when your Federal Stafford Loan funds are received by the College and posted to your eBill, the Stafford Loan amount may be adjusted accordingly.
Q: Last semester, I applied for a Federal Stafford Loan, and saw the loan amount on my SIS but I never received a refund. Why not?
A: 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 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.
Q: When must I begin to pay back my Federal Stafford Loan?
A: 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.
Q: Is there a lifetime limit on how much Federal Stafford Loan funding I can receive?
A: Yes. That limit (referred to as Aggregate Loan Limit) is $31,500 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), as of July 1, 2008. After undergraduate students reach that limit, they cannot receive additional Stafford Loan funds.
Q: Are there any Stafford Loan forgiveness programs?
A: Yes. PHEAA, powered by AES, provides information on Loan Forgiveness programs, which can reduce your Stafford Loan debt depending on your profession and place of employment after graduation. Be sure to carefully read the eligibility criteria.
View our Loans page for additional information about Federal Stafford and other types of loans.