Federal Loan Programs

• Federal Perkins Student Loan Program: This is a federal program administered by Huntingdon College that provides loans to students who can demonstrate high financial need. The maximum accumulated loan for an undergraduate student is $20,000, with a further limit of $4,000 annually. The size of the loan is based on the student’s demonstrated need and the other components of the financial aid package. Repayment of the Perkins Loan must begin nine months after the borrower graduates or ceases to be at least a half-time student. Interest shall accrue from the beginning of the repayment period and shall be at the annual percentage rate of 5 percent on the unpaid balance, except that no interest shall accrue during any deferment period.
• Federal Stafford Student Loan Program: Stafford student loans are federally guaranteed loans available to qualified students. There are two types of Federal Stafford loans. They are the Subsidized and Unsubsidized loans and profile only minor differences. One of the differences is that Subsidized loans are need-based and offer the feature of repayment being deferred, while the Unsubsidized loan is non need-based and requires interest to begin being repaid or capitalized immediately. Annual loan limits for each program are as follows:

  	Dependent Student		Independent Student
  	Subsidized	Unsubsidized	Subsidized	Unsubsidized
  Freshman	$3,500	$3,500	$3,500	$7,500
  Sophomore	$4,500	$4,500	$4,500	$8,500
  Junior	$5,500	$5,500	$5,500	$10,500
  Senior	$5,500	$5,500	$5,500	$10,500

  Any combination of Subsidized and Unsubsidized loans cannot exceed the applicable students’ Unsubsidized loan limits. It should also be noted that the banks and guaranty agencies may take up to 3 percent out of the Subsidized loan and Unsubsidized loan in the form of prepaid origination fees and insurance premiums. The actual size of the loan is based on the student’s demonstrated financial need and the other components of the financial aid package. These loans are available through commercial banks, but students should contact the Office of Financial Aid regarding eligibility requirements and the application process. Repayment of the Subsidized loan must begin six months after the borrower graduates or ceases to be at least a half-time student. Repayment of the Unsubsidized loan must begin with immediate repayment or capitalization of interest only. The interest rate is currenty 6.8 percent.
• Federal PLUS Loan Program: PLUS (Parental Loan for Undergraduate Students) loans are available to parents of dependent undergraduate students. PLUS Loans may not exceed the student’s cost of attendance less the financial aid assistance he or she will receive during the period of enrollment. It should also be noted that banks and guaranty agencies may take up to 3 percent out of these loans in the form of prepaid origination fees and insurance premiums. The actual size of the loan is contingent upon other factors of the financial aid package. These loans are also available at the same places as Federal Stafford Loans, but students should contact the Office of Financial Aid regarding eligibility requirements and the application process. Repayment of the PLUS Loan begins upon full loan disbursement. The interest rate is currently 8.5 percent.

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Loan Entrance and Exit Counseling

• Federal Stafford Loan Entrance Counseling: https://ww2.kheaa.com/entintro.html
• Federal Stafford Loan Exit Counseling: https://ww2.kheaa.com/exit/
• Federal Perkins Loan Exit Counseling: https://amsonlineexit.tuitionpay.com/borrowers/loancounseling.asp

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Taxpayer-Teacher Protection Act of 2004

On October 30, 2004, President Bush signed the “Taxpayer-Teacher Protection Act of 2004.” This Act authorizes up to $17,500 in loan forgiveness for new Federal Stafford Loan borrowers under the Federal Family Education Loan (FFEL) Program and Federal Direct Loan Program who meet certain criteria. The Enactment of the “Taxpayer-Teacher Protection Act of 2004” (P.L. 108-409; 118 Stat. 2299) contains information on changes made to the Higher Education Act to provide increased Federal Stafford Loan forgiveness for certain Elementary and Secondary School Teachers.

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