Stafford Student Loan Program Students should always apply for federal, state and University gift assistance before applying for loans. The Stafford Student Loan is a low-interest, federally guaranteed and controlled loan made available to students lacking adequate financial resources to meet the cost of college. These loans utilize private loan capital supplied primarily by commercial lenders. Banks, credit unions and savings and loan associations make loans to students without an established credit rating. If the student demonstrates financial need as defined by the federal government, the loan is subsidized (interest paid on student's behalf while in school). If need is not demonstrated, the student may still borrow up to the maximum loan limit; however, interest accrues during the in-school period and must be paid by the student. No payments are required for either type of loan while the student is enrolled at least half-time. How to Apply To apply for the Stafford Loan the student must first file the Free Application for Federal Student Aid and the University of Indianapolis Financial Aid Application. Once a financial aid package has been generated, an award letter is mailed to the student. Included in this mailing is the Stafford Loan application. The student completes the application and returns it to the financial aid office. The loan is processed and electronically sent to the federal guarantee agency who sends the loan proceeds via electronic funds transfer as long as the student has a Master Promissory Note (MPN) on file with their lender. In most cases this MPN can be completed and signed online. Loan funds are then credited to the student's account. Loan Limits The federal government sets limitations on annual borrowing in the Stafford (subsidized plus unsubsidized) as follows: Freshmen $3,500 Sophomore $4,500 Junior and beyond $5,500 Graduate $8,500 Independent students may borrow and additional amount under the unsubsidized program as follows: Freshmen & Sophomore $4,000 Junior and beyond $5,000 Graduate $12,000 Aggregate loan limit for all undergraduate study is $23,000 and $138,500 for graduate study. Parents of dependent students and graduate students may also borrow from the PLUS loan program. Choosing a Lender Students may borrow from any lender who participates in the Stafford Loan Program. Many lenders sell their loans on the secondary market to one of more than 65 secondary loan entities. University of Indianapolis processes loans from any lender the student chooses. Loans are processed as they are received without regard to the lender of choice. Lender Selection Process When choosing a lender, the U.S. Department of Education recommends that students compare the following lender services: Ability of lender to service all loans, Stafford and private loans Interest rates and term: Although these are federally controlled, some lenders offer better terms or discounts than what is required by law. Loan application process: Can the student apply online? Is instant loan approval offered? Repayment plans: Some are simple and others are more complicated Customer service: Can you reach a live operator quickly to check on the status of a student's loan during convenient hours? More information about choosing a lender University of Indianapolis Policy and Procedures for Creating a Preferred Lender List The University has established policy and procedures to select lenders for a preferred lender list. These are lenders that meet or exceed criteria that are valuable to the student and the University. Choosing a lender can be a challenge for students, so selecting a lender from the preferred lender list may be helpful. Students are free to choose any lender. Preferred lenders are chosen by the Financial Aid Policy Committee via an evaluation process that includes: Stability, longevity and reputation Efficient processing Customer service (for the student and the University) Use of technology Borrower benefits Lender value added support services Default management Based on these criteria and previous experience up to ten lenders provide information to the Financial Aid Policy Committee who objectively evaluate each lender on over 40 criteria and selects three to five lenders for the preferred lender list. The evaluation process is conducted annually. While the preferred lender list may change, it is important that, once chosen, the student should borrow from the same lender to avoid multiple payments upon graduation. Stafford Loan Borrower Benefits While the students may borrow from any lender that they choose, the UIndy believes that our preferred lender arrangements provide our student loan borrowers with comprehensive financing solutions and benefits tailored to their needs. Private Alternative Loan Lender Additional funding is often needed to supplement the aid awarded to the student. Students should always apply for gift assistance first and the Stafford Loan before applying for a private loan. Private alternative loans are not subject to federal oversight and a wide array of private loan products are now in the marketplace. UIndy processes loans from any lender the student chooses. More information about how to choose a private alternative loan lender Benefits made available through the preferred lenders include: Easy on-line application with electronic signature Combined billing for Stafford and private loans No minimum income and no debt-to-income ratio requirement Co-signer release options In-school deferment Six-month grace period upon leaving the University Affordable repayment terms Customer service and on-line account access