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Contents

Federal Student Aid at a Glance......................................................... 1

Finding Out About Student Aid......................................................... 3

General Information............................................................................. 5

Student Eligibility ............................................................................... 5

Financial Need .................................................................................... 6

Dependency Status.............................................................................. 6

Applying .............................................................................................. 7

Special Circumstances ....................................................................... 11

Withdrawals........................................................................................ 11

Deadlines ........................................................................................... 12

The Federal Student Aid Information Center.................................. 12

Types of Federal Student Aid ............................................................ 13

Federal Pell Grants ............................................................................ 13

Campus-Based Programs .................................................................. 13

Federal Supplemental Educational

Opportunity Grants (FSEOG) ....................................................... 14

Federal Work-Study ....................................................................... 14

Federal Perkins Loans.................................................................... 14

FFEL and Direct Loan Programs....................................................... 18

Stafford Loans ............................................................................... 18

PLUS Loans (Loans to Parents) .................................................... 24

Consolidation Loans ...................................................................... 27

Borrower Responsibilities and Rights............................................ 27

Responsibilities ................................................................................. 29

Rights ................................................................................................. 29

Keeping Track of Your Student Aid................................................. 32

Important Terms .................................................................................. 33
ii

The Student Guide is free.

If you paid for a copy of this publication, please write to the following address

and give us the name and address of the organization that charged you.

Federal Student Aid Information Center

P.O. Box 84

Washington, DC 20044-0084

The English and Spanish versions of The Student Guide are also available free

online at www.ed.gov/prog_info/SFA
1

*See “Important Terms,”page 33.

Federal Student Aid

at a Glance

T HIS GUIDE EXPLAINS student financial aid programs the U.S. Department of Education’s Federal

Student Aid (FSA) office administers. These first few pages summarize this aid and the process involved. The rest of the publication discusses in detail what you need to know.

Approximately two-thirds of all student financial aid comes from the federal programs you’ll read

about here. For additional sources of financial aid, other than the federal government, talk to the financial aid administrator at the school you plan to attend. Also, visit the library and check out the Internet,

in both cases searching under “financial aid” and “student aid.”

Beware of scams and services that will search for financial aid money for you for a fee. There is a law

that protects you from this type of fraud (see page 4 for more information).

Applying for student aid is free; that’s why the application you’ll use is called the Free Application for

Federal Student Aid (FAFSA). You’ll read more about how to apply later, but if you need help completing the FAFSA, you can get that help free, too. You don’t have to pay for assistance.

WHAT is federal

student aid?

Federal student aid is financial help if you’re enrolled in an eligible program* at a school participating

in our federal student aid programs. (By “school,” we mean a four-year or two-year public or private

educational institution, a career school, or a trade school.) Aid covers school expenses, including tuition

and fees, room and board, books and supplies, and transportation. Most federal aid is need-based. The

three most common types of aid are grants, loans, and work-study.

■ GRANTS...financial aid that does not have to be repaid. Generally, grants are for undergraduate

students, and the grant amount is based on need, cost of attendance*, and enrollment status.

Federal Pell Grants for the 2002-2003 school year ranged from $400 to $4,000. At the time this

Guide was published, the maximum grant amount for 2003-2004 had not been determined.

Federal Supplemental Educational Opportunity Grants (FSEOG) range from $100 to $4,000.

■ WORK-STUDY...lets students earn money while enrolled in school to help pay for education expenses.

■ LOANS...borrowed money that must be repaid with interest. Both undergraduate and graduate

students may borrow money. Parents may also borrow to pay education expenses for dependent

undergraduate students. Maximum loan amounts depend on the student’s year in school.

Federal Stafford Loans are made to students and PLUS loans are made to parents through two

loan programs.

• William D. Ford Federal Direct Loan (Direct Loan) Program: Eligible students and parents borrow

directly from the federal government at participating schools. Direct Loans consist of Direct Stafford

Loans, Direct PLUS Loans, and Direct Consolidation Loans.

• Federal Family Education Loan (FFEL) Program: Private lenders provide federally guaranteed funds.

FFELs consist of FFEL Stafford Loans, FFEL PLUS Loans, and FFEL Consolidation Loans.

Perkins Loans are offered by participating schools to students that demonstrate the greatest need.

NOTE: You’ll encounter terminology that’s new to you but is

frequently used in financial aid.

These words appear in boldface

type with an asterisk (*), and

you’ll find a description of them

in the Important Terms section

of the Guide (page 33). Because there are also acronyms

you’re unfamiliar with, we spell

them out in each chapter.

NOTE: Not all schools participate in all Federal Student Aid programs. Ask your

school’s financial aid administrator which programs

are available.

WHO gets federal

student aid?

Some of the requirements (a complete list is available on page 5) to receive aid from the U.S. Department of Education’s FSA programs are that you must

• be a U.S. citizen or eligible noncitizen* with a valid Social Security Number;

• have a high school diploma or a General Education Development (GED)* certificate or pass an approved ability-to-benefit (ATB) test;

• enroll in an eligible program* as a regular student* seeking a degree or certificate; and

• register (or have registered) with the Selective Service if you’re a male between 18 and 25.
2

*See “Important Terms,”page 33.

Federal Student 

Aid Program

Campus-Based

Aid Programs

Direct Loan and 

FFEL Programs

Type of Aid Annual Award 

Limits Other Information Disbursement

Federal Pell Grant Grant: does not 

have to be repaid

Up to $4,000 for 

2002-2003

Available to undergraduates onlySchool acts as the U.S. Department of Education’s agent

Federal Supplemental 

Educational Opportunity Grant (FSEOG)

Grant: 

does not have to be 

repaid

Not all schools participate in Up to $4,000

all Campus-Based Programs; 

for undergraduates only

School disburses funds to 

students

Federal Work-Study Money is earned; 

does not have to be 

repaid

No annual 

maximum

Not all schools participate in 

all Campus-Based Programs; 

for undergraduate and graduate students

School disburses earned funds 

to students

Federal Perkins Loan Loan: 

must be repaid

$4,000 for undergraduate students; 

$6,000 for graduate 

students

Not all schools participate in 

all Campus-Based Programs; 

for undergraduate and graduate students

School disburses funds to 

students

Subsidized Stafford 

Loan

Loan: 

must be repaid

$2,625 to $18,500, 

depending on grade 

level

The Department of Education 

pays interest while the student 

is in school and during grace 

and deferment periods

Direct Loans: The federal government provides funds to schools to 

disburse to students; FFEL: Private lenders provide funds to 

schools to disburse to students

Unsubsidized Stafford 

Loan

Loan: 

must be repaid $2,625 to $18,500, 

depending on grade 

level

The borrower is responsible 

for interest during the life of 

the loan

Same as above

PLUS Loan Loan: 

must be repaid

Cost of attendance 

minus any other financial aid received

Available to parents of dependent undergraduate studentsSame as above

HOW do you apply for

federal student aid?

1. Complete the Free Application for Federal Student Aid (FAFSASM).

You have to submit your complete, correct FAFSA by June 30, 2004, but be sure to check the

deadlines for state aid that the FAFSA lists. You might have to submit your FAFSA sooner than

June 30; schools and states often set deadlines early in the calendar year that students must meet to

receive certain types of funds. Apply as early as you can; you don’t want to miss out on other aid!

You can get a FAFSA

• online at www.studentaid.ed.gov;

• from a high school guidance office;

• from a college financial aid office;

• from a local public library; or

• from the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243)

2. Review your Student Aid Report (SAR).

One to four weeks after you submit your FAFSA, we’ll send you a SAR (or a SAR Information Acknowledgement if you applied via the Internet). The SAR confirms the information reported on your FAFSA

and will list your Expected Family Contribution (EFC)—see page 6. The EFC is an index of need that

your financial aid administrator will use to determine the amount of federal student aid you qualify for.

3. Contact the school(s) you may attend.

Talk with the financial aid administrators at the schools you’re interested in attending. They’ll

review your SAR and prepare a letter outlining the amount of aid (from all sources) that their

schools will offer you.

Federal Student Aid Summary

The following is a summary of Federal Student Aid programs that will help you pay for school. Check with your school to find out

which programs your school participates in.
3

*See “Important Terms,”page 33.

Finding Out About

Student Aid

T HE STUDENT GUIDE TELLS you about federal student aid programs and how to apply for them.

After reviewing this publication, if you still have questions about these programs, call 1-800-4-

FED-AID (1-800-433-3243). Or, you can go online to www.studentaid.ed.gov This is the Department’s

newly designed Web site that provides comprehensive information on the student aid process and links

to other student aid-related sites.

The cost of education or training after high school continues to rise. But postsecondary education is

more important than ever, so you need to learn about as many sources of aid as you can. The following

free resources can help you find out about federal and other student aid:

• The financial aid administrator at each school you’re interested in can tell you what aid programs

are available at the school and how much the total cost of attendance* will be.

• The state higher education agency in your home state can give you information about state aid—including aid from the Leveraging Educational Assistance Partnership (LEAP) Program, funded jointly

by states and the U.S. Department of Education.

• The AmeriCorps Program provides full-time educational awards in return for work in community

service. You can work before, during, or after your postsecondary education, and you can use the

funds either to pay current educational expenses or to repay federal student loans. For more information, call 1-800-942-2677. The TTY number is 202-565-2799. Information is also available through

the Internet at www.americorps.org

• The agency in your state responsible for public elementary and secondary schools can give you information

on the Robert C. Byrd Honors Scholarship (Byrd) Program. To qualify for aid under the Byrd Program, you

must demonstrate outstanding academic achievement and show promise of continued academic excellence.

You can find a list of telephone numbers for state agencies on the inside back cover of this publication.

• Students.gov, the student Internet gateway to the U.S. government, provides access to government

resources to help you plan and pay for your education. Students.gov is a federal initiative designed

to make interacting with the government easier. Besides finding financial aid information, you can

use the Web site to file your taxes, search for a job, and take advantage of other government services.

• Public libraries are an excellent source of information on state and private sources of aid.

• Many companies and labor unions have programs to help pay the cost of postsecondary education

for employees and/or their children.

• Sources of financial aid also include foundations, religious organizations, fraternities or sororities,

and town or city clubs. Include community organizations and civic groups such as the American

Legion, YMCA, 4-H Club, Elks, Kiwanis, Jaycees, and the Girl or Boy Scouts in your search.

• Don’t overlook aid from organizations connected with your field of interest. For example, the American Medical Association and the American Bar Association are good sources for students seeking specialization in those fields.

• The U.S. Armed Forces also offer financial aid opportunities. For example, all branches of the U.S.

Armed Forces offer the Reserve Officers Training Corps (ROTC) Program, which is a federal meritbased scholarship program that will pay for your tuition, fees, and books and provide you with a

monthly allowance. The U.S. Army also offers a student loan repayment enlistment incentive through

the Army’s student loan repayment program for new recruits who have already attended college and

accumulated debt. In return for a three-year enlistment, the Army will repay up to $65,000 on specific
4

*See “Important Terms,”page 33.

federally guaranteed loans to qualified applicants. For more information, contact your local recruiter.

For more information on recruitment incentives the U.S. Armed Forces offers, visit the U.S. Department of Defense (DOD) Defenselink Web site at www.todaysmilitary.com At the site, click on “Smart

Choice,” then click on “College Preparation.”

• If you (or your spouse) are a veteran or the dependent of a veteran, veterans’ educational benefits

may be available. Check with your local U.S. Department of Veterans Affairs office. Information is

also available through the Internet at www.gibill.va.gov

• Two federal income tax credits—dollar-for-dollar reductions in tax liability—are available for higher education expenses. The Hope tax credit, worth up to $1,500 per student, is available to first- and second-year

students enrolled at least half time.* The Lifetime Learning tax credit is a tax benefit equal to 20 percent of

a family’s tuition expenses, up to $5,000, for virtually any postsecondary education and training, including

subsequent undergraduate years, graduate and professional schools, and even less than half time* study.

For more information on the Hope and Lifetime Learning tax credits, and other tax benefits for postsecondary students, call the IRS at 1-800-829-1040. TTY callers can call 1-800-829-4059. IRS Publication

970, Tax Benefits for Higher Education, also explains these credits and other tax benefits.

• The Internet also has information on private sources of aid. Search under the keywords “financial

aid,” “student aid,” “scholarships,” etc.

Scholarship Scams

Be careful when searching for information on student financial assistance. Make sure information

and offers are legitimate. Don’t fall prey to fraud. Estimates show that families lose millions of

dollars to scholarship fraud every year.

The College Scholarship Fraud Prevention Act enhances protection against fraud in

student financial assistance. The Federal Trade Commission (FTC) cautions students to

look for these telltale lines:

• “The scholarship is guaranteed or your money back.”

• “You can’t get this information anywhere else.”

• “I just need your credit card or bank account number to hold this scholarship.”

• “We’ll do all the work.”

• “The scholarship will cost some money.”

• “You’ve been selected by a ‘national foundation’ to receive a scholarship” or “You’re a finalist” in a contest you never entered.

To file a complaint, or for free information, call 1-877-FTC-HELP (1-877-382-4357) or

visit www.ftc.gov/scholarshipscams
5

*See “Important Terms,”page 33.

General Information

Student Eligibility

TO RECEIVE AID from any of the federal student aid programs discussed in this publication, you must

meet all of the following criteria:

• demonstrate financial need, except for some loan programs.

• have a high school diploma or a General Education Development (GED) Certificate,* pass a test

approved by the U.S. Department of Education, meet other standards your state establishes that are

approved by the U.S. Department of Education, or complete a high school education in a home

school setting that is treated as a home school or private school under state law. See your financial

aid administrator for more information.

• be enrolled or accepted for enrollment as a regular student* working toward a degree or certificate in an

eligible program.* (You may not receive aid for correspondence or telecommunications courses unless

they are part of an associate, bachelor’s, or graduate degree program.)

• be a U.S. citizen or eligible noncitizen.*

• have a valid Social Security Number (unless you’re from the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau). If you need a Social Security Number, you can

find out more about applying for one through the Internet at www.ssa.gov

• meet satisfactory academic progress* standards set by the postsecondary school you are or will

be attending.

• certify that you will use federal student aid only for educational purposes.

• certify that you are not in default* on a federal student loan and that you do not owe money on a

federal student grant.

• comply with the Selective Service registration,* if required. If you’re a male aged 18 through 25, and

you haven’t yet registered, you can give the Selective Service permission to register you by checking a

box on the FAFSA. You can also register through the Internet at www.sss.gov

The law suspends aid eligibility for students convicted under federal or state law of sale or possession of illegal drugs. The period of ineligibility varies and depends on whether the conviction was for

sale or possession, and whether the student had previous offenses. The student regains eligibility when

the period of suspension ends, or in some cases, only when the student completes an acceptable drug

rehabilitation program. If you have a conviction or convictions for these offenses, call 1-800-4-FEDAID (1-800-433-3243) to find out how, or if, this law applies to you. Even if you’re ineligible for federal aid, you should complete the FAFSA and answer Question 35 because schools use this information

in awarding nonfederal aid. If you leave Question 35 of the FAFSA blank, you will automatically become ineligible for federal student aid.

Incarcerated persons have limited eligibility for federal student aid. An incarcerated person is eligible

for a Pell Grant only if he or she is incarcerated in a nonfederal or nonstate penal institution, such as a

local or county jail.

When you apply for aid from the FSA programs, the U. S. Department of Education verifies some of

your information with the following federal agencies:

• Social Security Administration (for verification of Social Security Numbers and U.S. citizenship status)

• Selective Service System (for verification of Selective Service registration* status, if applicable)

• U.S. Immigration and Naturalization Service (for verification of eligible noncitizen* status, if applicable)

• U.S. Department of Justice (for verification that an applicant has not been denied federal student aid

by the courts as the result of a drug-related conviction)

• U.S. Department of Veterans Affairs (for verification of veteran status, if applicable)
6

*See “Important Terms,”page 33.

Financial Need

Aid from most of the programs discussed in this publication is awarded on the basis of financial

need (except for unsubsidized Stafford and PLUS loans—see page 18).

When you apply for federal student aid, the information you report on the FAFSA is used to calculate

your Expected Family Contribution (EFC). The formula used to calculate your EFC is established by

law and is used to measure your family’s financial strength based on their income and assets. The EFC

is used to determine your eligibility for federal student aid.

If your EFC is below a certain amount, you’ll be eligible for a Federal Pell Grant, assuming you

meet all other eligibility requirements (see page 5). There isn’t a maximum EFC that defines

eligibility for the other financial aid programs (see pages 13 through 28 for information on these

programs). Instead, your EFC is used in the following equation to determine your financial need:

Cost of Attendance*

— Expected Family Contribution

=Financial Need

Your financial aid administrator calculates your cost of attendance* and subtracts the EFC. If there’s

anything left over, you’re considered to have financial need. In attempting to meet your need for aid from

FSA programs, your financial aid administrator must first consider other aid you’re expected to receive.

NOTE: The financial aid administrator puts together a financial aid package* that comes as close as

possible to meeting your need. However, because funds are limited, the total amount awarded to

you might fall short of the amount you’re eligible for. Also, except for Federal Pell Grant aid, the

amount of federal student aid you receive is affected by other sources of aid you might get—

scholarships, state aid, etc.

Your financial aid administrator can adjust data used to calculate your EFC or adjust your cost of

attendance* if he or she believes your family’s financial circumstances warrant it based on the

documentation you provide. However, the financial aid administrator does not have to make such an

adjustment. For more information on special circumstances, see page 11.

You can get worksheets that show how the EFC is calculated by downloading them from our Web

site at www.ifap.ed.gov At the site, under “FSA Library,” click on “Current Publications by Title.” Then

click on “E” in the alphabet list across the top of the page. Then go to “EFC Formula Information.”

You can also get the worksheets by contacting the Federal Student Aid Information Center at the

address or phone number given on page 12.

Dependency Status

When you apply for federal student aid, your answers to certain questions will determine whether

you’re considered dependent on your parents or independent. If you’re considered dependent, your

parents’ income and assets as well as your own must be reported on the FAFSA. If you’re independent, you’ll report only your own income and assets (and those of your spouse, if you’re married).

Not living with your parents does not necessarily classify you as independent.

Students are classified as dependent or independent because federal student aid programs are based

on the principle that students (and their parents or spouse, if applicable) are considered the primary

source of support for postsecondary education.
7

*See “Important Terms,”page 33.

For the 2003-2004 academic year, you’re an independent student if at least one of the following

applies to you:

• you were born before January 1, 1980;

• you’re married;

• you are or will be enrolled in a master’s or doctoral program (beyond a bachelor’s degree) during the

2003-2004 school year;

• you have children who receive more than half their support from you;

• you have dependents (other than your children or spouse) who live with you and who receive more

than half their support from you and will continue to receive more than half their support from you

through June 30, 2004;

• you’re an orphan or ward of the court (or were a ward of the court until age 18); or

• you’re a veteran of the U.S. Armed Forces (“veteran” includes students who attended a U.S. service

academy and who were released under a condition other than dishonorable).

In unusual cases, an aid administrator can determine that a student who doesn’t meet the above criteria should still be treated as an independent student. The financial aid administrator can change your dependency status if he or she thinks circumstances warrant it based on the documentation you provide.

But remember, the aid administrator won’t automatically do this. The decision is based on the aid

administrator’s judgment and is final—it can’t be appealed to the U.S. Department of Education.

Applying

How do I apply?

If you applied for federal student aid for the 2002-2003 school year, you probably will be able to file

a 2003-2004 Renewal FAFSA. Renewal FAFSAs are discussed on page 8.

If you didn’t apply for federal student aid for the 2002-2003 school year, you can apply for the

2003-2004 school year by completing and submitting the 2003-2004 FAFSA. You can apply through

the Internet, using FAFSA on the Web, or you can complete a paper FAFSA.

FAFSA on the Web. With this method, you can complete a FAFSA online and submit it via the

Internet. You can access FAFSA on the Web (on a computer equipped with Internet capability)

through the same Department Web site where you can get general student aid information:

www.studentaid.ed.gov At the site, click on the FAFSA logo in the left column.

If you can, you should use FAFSA on the Web because if you file electronically, the software

immediately identifies potential errors and allows for on-the-spot correction. Plus, once you transmit

it, your information goes right into the U.S. Department of Education’s Central Processing System

(CPS). The CPS will process your application in one to five days, provided you (and your parents, if

applicable) have provided electronic signatures (see the PIN discussion below).

Mailing a paper FAFSA. To apply by completing a paper FAFSA, you can get one from your high

school, local library, postsecondary school, or from the Federal Student Aid Information Center at the

address or phone number given on page 12. Complete the application and mail in the pre-addressed

envelope that’s in your FAFSA packet. Or, before mailing it, you could check to see if your school, or a

school that interests you, offers the option of submitting your FAFSA information electronically (which

is different from you submitting it over the Internet).

What is a PIN, and who gets it?

A PIN is an electronic access code number that serves as an identifier. A PIN lets you access your personal federal student aid information online in various U.S. Department of Education systems. It works

much like the personal identification number you get from your bank. Whether you complete a paper

FAFSA or file an application using FAFSA on the Web, you can get a PIN. The process for getting and using a PIN is described below.
8

If you fill out a FAFSA using FAFSA on the Web, having a PIN allows you (and your parents, if they

have a PIN and you’re a dependent student) to “sign” your FAFSA electronically, which means the

student aid process can be completed totally online. Your electronic signature holds the same legal

status as a written signature, so don’t give out your PIN to anyone. Once you get a PIN, you should

remember it, because you use the same PIN in the future to apply electronically for student aid and

to access your U.S. Department of Education records.

FAFSA on the Web filers who are new applicants should request a PIN through www.studentaid.ed.gov

At the site, click on “Apply for PIN,” right under “My FSA” in the left column.

You should get a PIN before completing FAFSA on the Web, so you (and your parents, if applicable) can

electronically sign your application at the time you submit it. You can request a PIN, and your parents can

request their own PIN, anytime before you complete the FAFSA. If you don’t request a PIN, you can always

print out, sign, and mail in a signature page, but the application process will take longer.

When requesting a PIN, you’ll need to provide your name, Social Security Number, date of birth, and

mailing address, and submit your request. After that information has been verified with the Social

Security Administration’s records, a PIN will be generated. If you provide an e-mail address, you’ll get

an e-mail response that contains a link to your PIN so you can get it quickly, through the Internet. If

you don’t provide an e-mail address, you’ll get your PIN through regular mail.

Even if you file electronically and don’t request a PIN, or even if you file a paper FAFSA, you’ll

receive a PIN if the personal data mentioned above matches the Social Security Administration’s

records. A PIN has other uses besides just signing an application electronically. So, whether you’re a

paper or an electronic filer, you can use your PIN to

• access your Student Aid Report (SAR), which is your processed FAFSA data;

• make corrections to your application information;

• electronically sign a master promissory note*;

• complete your Renewal FAFSA (see below); and

• access your applicant data records online. You can, among other things, check your student loan history

through the U.S. Department of Education’s National Student Loan Data System (NSLDS)—see page 31—

and access your Direct Loan account through Direct Loan Servicing.

If you file for 2003-2004 using a paper FAFSA, you can use your PIN to apply for federal student aid

electronically in 2004-2005, if you choose.

What if I have questions about the PIN?

You can get answers about the PIN process by going to www.studentaid.ed.gov At the site, click on

“Apply for PIN” in the left column, right below “My FSA.” Or, you can call the Federal Student Aid

Information Center at 1-800-4-FED-AID.

Can I request a PIN from the Federal Student Aid Information Center?

No, you can only request a PIN by going online.

I applied for federal student aid in 2002-2003. Can I use a Renewal FAFSA?

Yes. Using a Renewal FAFSA means you’ll have fewer questions to answer than if you applied with a

new application, because most of the Renewal form will be filled in already with information you

provided on your 2002-2003 FAFSA. You’ll only have to update any information that has changed

since 2002-2003 and fill in a few answers.

If you applied for federal student aid electronically in 2002-2003, you’ll get a reminder, either through

regular mail or e-mail (depending on whether you provided your e-mail address) that it’s time for you to

reapply. The reminder will include your PIN, which you’ll use to go online to complete your Renewal

FAFSA on the Web and sign it electronically. (See page 7 for more on the PIN.)

If you applied using a paper FAFSA in 2002-2003, usually you’ll receive a paper Renewal FAFSA for

2003-2004. If so, review the pre-printed information on the Renewal FAFSA, add what needs to be
9

filled in or changed, sign it, and mail it. In some cases, instead of a paper Renewal FAFSA, students will

receive a reminder notice containing a PIN. You’ll get this if (1) you used the Web to make corrections

in 2002-2003, (2) your school requests that you receive a PIN, or (3) you’re a graduate or fifth- year

undergraduate student. If you get a PIN, use it to access the Renewal FAFSA on the Web, complete it

online, and sign it electronically.

You’ll receive either the paper Renewal FAFSA or the reminder notice containing your PIN in November or

December 2002, but you cannot submit your application (whether it’s paper or electronic) before January 1,

2003 (see page 10).

Check with your financial aid administrator if you have questions about the Renewal FAFSA or contact

the Federal Student Aid Information Center at the address or toll-free number listed on page 12.

What information do I need to complete a FAFSA accurately?

First, read the instructions carefully! Most mistakes are made because applicants don’t follow instructions.

If you apply using FAFSA on the Web, you can print a pre-application worksheet if you want to

practice filling out the form before you submit your information online. Filling out the worksheet can

help you see what information you need and help you provide the correct, complete data. The preapplication worksheet follows the order of the questions as they are presented on the Web (the order is

somewhat different from that on the paper FAFSA). The worksheet will also reference the question

numbers as they appear on the paper FAFSA, however.

When you fill out your application, pay special attention to questions on income; most errors

occur in this area. When you apply, you should have the 2002 tax return on hand.1 You’ll need to

refer to your tax return, your parents’ return (if you’re a dependent student—see page 6), and your

spouse’s return (if you’re married and your spouse filed a separate return). Referring to the tax

form will make it easier to answer the questions when you apply. Other records such as W-2 forms

and bank statements also will be useful.

You might not have to report certain asset or income information on your FAFSA if you (and your

parents, if you’re a dependent student) don’t have income over a certain amount and filed, or were

eligible to file, a 1040A or 1040EZ (that is, not required to file a 1040). The paper or electronic FAFSA

will provide instructions to determine if you qualify. Note that even if you do qualify, some states and

schools require this information anyway. Check with the schools you’re interested in.

You should save all records and all other materials used in completing the application because you

might need them later to prove the information you reported is correct. The process of proving your

information is correct is called verification. If verification is required, and you don’t provide the proof

your school requests, you won’t receive aid from FSA programs, and you might not receive aid from

other sources.

You should photocopy your application (or print out a copy of your FAFSA on the Web application) so

you’ll have a copy for your own records.

What if I need help filling out my application?

If you apply using FAFSA on the Web, help is built into the program.

You can also go to www.ed.gov/prog_info/FSA/FAFSA

You can also contact the Federal Student Aid Information Center with questions on either the

paper or electronic FAFSA (see page 12 for contact information). Or, contact your school’s financial

aid office. Remember, you can get the help you need for free from one of these sources; you don’t

have to pay for assistance.

1 Note that if you (or your parents, if you’re a dependent student) are eligible for the Earned Income Credit, make sure

you get it by filing a tax return. Also, you’ll have an accurate record of your earnings.
10

*See “Important Terms,”page 33.

Will I need to fill out forms in addition to the FAFSA to receive aid?

For most of the federal student aid programs, the FAFSA (or Renewal FAFSA) is the only form you

need to file. To receive a PLUS Loan, your parents will have to complete different forms (see page 24).

Remember, applying for federal student aid is free.

To be considered for nonfederal aid such as institutional aid (aid from the school), you might have

to fill out additional nonfederal forms. Check with your school. Be sure to ask about any deadlines.

When do I apply for federal aid?

Apply as soon AFTER January 1, 2003, as possible. (If you apply before this date, your application

will be rejected, so do not sign [in print or electronic format], date, or send your application before

January 1.) If you want to apply through FAFSA on the Web, you can apply beginning January 2, 2003.

It’s easier to complete the application when you already have a completed 2002 income tax return (see

page 9), so you might want to complete your tax return as early as possible.

If you use a paper FAFSA, send your completed application in the envelope provided. It’s already addressed, so your application will automatically reach the correct place.

NOTE: You must reapply for federal student aid every year. Also, if you change schools, your aid doesn’t

automatically go with you. Check with your new school to find out what steps you must take to

continue receiving aid.

How do I know if my application has been received?

If it’s been more than four weeks since you submitted your application and you haven’t heard anything, you can check on your application through the FAFSA on the Web site, even if you didn’t apply

using FAFSA on the Web. You can also check by contacting the Federal Student Aid Information Center

at the address or toll-free number listed on page 12.

If you want confirmation that your paper application was received, send in the postcard that comes

with the paper FAFSA. Just fill in the required information, attach a stamp, and mail it along with the

FAFSA. When the FAFSA processor receives your application, the postcard will be stamped with the date

it’s received and mailed back to you for your files. If you don’t hear anything within four weeks of the

date stamped on the postcard, contact the Federal Student Aid Information Center and refer to the date

stamped on the postcard.

What happens after I apply?

After the Department’s processing system receives your completed application, generally you’ll receive a

Student Aid Report (SAR), if you applied using the paper FAFSA, or a SAR Information Acknowledgement

if you applied electronically. If you provided your e-mail address on your paper or electronic FAFSA, however, you’ll instead get back an e-mail that contains a secure link so you can access your SAR data on the

Web. You’ll get this e-mail in one to five days provided you (and your parents, if applicable) signed your

application at the time you applied. If you don’t have or provide an e-mail address, you’ll get a SAR

within four weeks or a SAR Information Acknowledgement within two weeks.

Your SAR or SAR Information Acknowledgement will list all the information you reported on your

FAFSA. If there are no questions or requirements for additional information, your SAR will contain

your Expected Family Contribution (EFC), the number used in determining your eligibility for federal

student aid. (See page 6.) Your EFC will appear in the upper right-hand portion of your SAR. Whether

you apply electronically or with a paper form, the Department will send your data electronically to the

schools you list on the FAFSA.

What do I do with my SAR?

You must review it carefully to make sure it’s correct and complete. If it is, and it contains your Expected

Family Contribution (EFC), your school will use your SAR as the basis to pay you federal student aid funds.
11

*See “Important Terms,”page 33.

If you need to make corrections, you can make them in a number of ways.

• You can make corrections online through the Department of Education’s FAFSA on the Web site, even

if you didn’t apply using FAFSA on the Web.

• Your school might be able to submit the corrections electronically.

• You can make corrections on the paper SAR (if that’s what you received) and return it to the address

provided. If you don’t have a copy of your SAR, you can request one from the Federal Student Aid Information Center at the address or toll-free number on page 12. (If you send a written request for a

duplicate SAR, make sure you include your full name, permanent address, Social Security Number,

date of birth, the school year for which you’re applying for aid, and your signature.) Your duplicate

SAR will be sent to the address you reported on your application. If your address has changed, include your old and new mailing addresses and ask for a change of address.

Note that you can’t use a SAR Information Acknowledgement to make corrections (just to check the

information reported). You’ll make corrections using FAFSA on the Web.

If you want to have your application information sent to a school you didn’t list on your FAFSA, you can

• contact the Federal Student Aid Information Center to have your information sent to the school,

• give the school permission to request your information, or

• correct your paper SAR to add the school or make the correction on the Web.

If you ask the Federal Student Aid Information Center to send your information or give permission

to the school to request the information, you’ll need to provide your Data Release Number (DRN), located in the lower left hand corner of the first few pages of the SAR.

If your address changes after you receive your SAR, you should correct your address as soon as

possible. You can do this online at the FAFSA on the Web site, by contacting the Federal Student Aid

Information Center at the address or toll-free number given on page 12 (you’ll need to provide your

DRN), or by correcting the SAR and mailing it to the address listed on the SAR.

Although the formula used to determine eligibility for federal student aid is basically the same for all

applicants, there is some flexibility.

In some cases, your financial aid administrator might adjust your cost of attendance* or the information used to calculate your EFC to take into account any special circumstances you might have. These

circumstances could include a family’s unusual medical expenses or tuition expenses. Also, an adjustment

might be made if you, your spouse, or either parent (if applicable) has been recently unemployed. If

conditions such as these apply to you or your family, contact your financial aid administrator.

Also, check with your financial aid administrator if you think you have any other special circumstances

that might affect your dependency status or the amount you and your family are expected to contribute.

But, there have to be very good reasons for the financial aid administrator to make any adjustments, and

you’ll have to provide adequate proof to support those adjustments. Note that the financial aid

administrator’s decision is final and cannot be appealed to the U.S. Department of Education.

If you should withdraw from school, the law states that the amount of FSA program assistance you

have “earned” up to the point of withdrawal must be determined by a specific formula. If you received

more assistance than you earned, the excess funds must be returned.

The amount of assistance you’ve earned is determined on a pro-rata basis. That is, if you completed 30

percent of the payment period or period of enrollment, you earned 30 percent of the assistance you were

originally scheduled to receive. Once you’ve completed more than 60 percent of the payment period or

period of enrollment, you earn all of your assistance.

If you received excess funds that must be returned, your school can explain what portion of those

funds you must return.

Special

Circumstances

Withdrawals
12

*See “Important Terms,”page 33.

Deadlines

Application Submission The application processor must receive your application by June 30, 2004,

for the 2003-2004 school year. There are no exceptions to this deadline.

Apply as soon as you can on or AFTER January 1, 2003. (Please note that

your application will be rejected if you apply before that date, so don’t sign,

date, or send your application before January 1.) If you want to apply through

FAFSA on the Web, you can apply beginning January 2, 2003.

Schools and states often set deadlines early in the calendar year that students must

meet to receive certain types of funds, including aid from the federal “campus-based”

program funds (see page 13 for information on these programs). Make sure you know

your school’s deadlines so you won’t miss out on any aid.

SAR Submission Your correct, complete application information must be at your school by your last day of enrollment in 2003-2004 or by August 31, 2004, whichever is earlier (check with your school’s financial aid

office). If your school hasn’t received your application information electronically, you must submit your

SAR to the school by the deadline. Be sure you know your last day of enrollment in 2003-2004—it might

be earlier than August 31.

NOTE: If you’re selected for verification (see page 9), additional deadlines apply to you. Your financial aid

administrator can tell you what they are.

The Federal

 Student Aid

 Information

 Center

You can get information from the Center for free by calling this number: 1-800-4-FED-AID

(1-800-433-3243)

Information specialists at this number can

• help you complete the FAFSA (either electronic or paper).

• answer your questions about a PIN.

• help you make corrections to your SAR.

• tell you whether a school participates in the federal student aid programs and tell you the school’s

student loan default* rate.

• explain federal student aid eligibility requirements.

• explain the process of determining financial need and awarding aid.

• have your application information sent to a specific school.

• send federal student aid publications to you.

• answer questions about federal student loans.

You can use an automated response system at this number to

• find out if your FAFSA application has been processed.

• request a copy of your SAR.

TTY users may call 1-800-730-8913.

Callers from locations that do not have access to 800 numbers may call 1-319-337-5665. This is not

a toll-free number.

You can also write to the Federal Student Aid Information Center at the following address:

Federal Student Aid Information Center

P.O. Box 84

Washington, DC 20044-0084

For a list of other frequently requested telephone numbers and Web sites, see the inside front

cover of this guide.
13

*See “Important Terms,”page 33.

Types of Student Aid

What is a Federal Pell Grant?

A Federal Pell Grant, unlike a loan, does not have to be repaid. Generally, Pell Grants are awarded only

to undergraduate students who have not earned a bachelor’s or professional degree. (A professional degree is usually obtained after a bachelor’s degree in a field such as medicine, law, or dentistry.) In some

cases, you might receive a Pell Grant for attending a post-baccalaureate teacher certificate program.

Pell Grants are usually a foundation of financial aid, to which aid from other federal and nonfederal

sources might be added.

How do I qualify?

To determine if you’re eligible, the U.S. Department of Education uses a standard formula, established by Congress, to evaluate the information you report when you apply (see “Financial Need” on

page 6). The formula produces an EFC number. Your SAR contains this number, in the upper right

portion of page 1. This number will determine if you’re eligible for a Pell Grant and for how much.

How much money can I get?

Pell Grants for the 2003-2004 award year (July 1, 2003 to June 30, 2004) will depend on program

funding. The maximum Pell Grant for the 2002-2003 award year was $4,000. How much you get will

depend not only on your EFC but also on your cost of attendance,* whether you’re a full-time or part-time

student, and whether you attend school for a full academic year* or less. You may receive only one Pell

Grant in an award year, and you may not receive Pell Grant funds from more than one school at a time.

How will I be paid?

Your school may credit the Pell Grant funds to your school account, pay you directly (usually by check),

or combine these methods. The school must tell you in writing how and when you’ll be paid and how

much your Pell Grant will be. Schools must pay you at least once per term (semester, trimester, or quarter).

Schools that don’t use formally defined, traditional terms must pay you at least twice per academic year.*

Can I receive a Federal Pell Grant if I’m enrolled less than half time?*

Yes, if you’re otherwise eligible. You won’t receive as much as if you were enrolled full time, but your

school must disburse your Pell Grant funds in accordance with your enrollment status and can’t refuse

you an award simply because you’re enrolled less than half time.*

The three programs discussed in this section are called campus-based programs because they’re

administered directly by the financial aid office at each participating school. Not all schools participate in

all three programs. The Federal Supplemental Educational Opportunity Grant (FSEOG) Program awards

grants; the Federal Work-Study Program offers jobs; and the Federal Perkins Loan Program provides lowinterest loans. Even though each program is different, they have these characteristics in common:

• How much aid you receive depends on such factors as your financial need (see page 6), the amount of

other aid you’ll receive, and the availability of funds at your school. Unlike the Federal Pell Grant Program, which provides every eligible student with funds, each school participating in any of the campusbased programs receives a certain amount of funds each year from the federal government for each program. When that money is gone, no more awards can be made from that program for that year.

• Each school sets its own deadlines for students to apply for campus-based funds. The deadlines will

usually be earlier than the U.S. Department of Education’s deadline for filing a FAFSA (for 2003-

2004, June 30, 2004). Check with the financial aid office about the school’s deadlines. You might

miss out on aid from these programs if you don’t apply early.

Federal Pell

Grants

Campus-Based

Programs

*See “Important Terms,”page 33.
14

*See “Important Terms,”page 33.

Federal Supplemental

Educational Opportunity

Grants (FSEOG)

What is a Federal Supplemental Educational Opportunity Grant?

An FSEOG is for undergraduates with exceptional financial need—that is, students with the lowest EFCs—

and gives priority to students who receive Federal Pell Grants. An FSEOG doesn’t have to be paid back.

What’s the difference between an FSEOG and a Federal Pell Grant?

The U.S. Department of Education guarantees that each participating school will receive enough money to

pay the Federal Pell Grants of its eligible students. There’s no guarantee every eligible student will be able to receive an FSEOG; students at each school will be awarded these funds based on availability at that school.

How much money can I get?

You can receive between $100 and $4,000 a year, depending on when you apply, your need, the funding

level of the school you’re attending, and the policies of the financial aid office where you attend school.

How will I be paid?

Your school will credit your account, pay you directly (usually by check), or combine these methods.

Schools must pay students at least once per term (semester, trimester, or quarter). Generally, schools

that do not use traditional terms must pay you at least twice during the academic year.*

Federal Work-Study What is Federal Work-Study?

The Federal Work-Study Program provides jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses. The program encourages community service work and work related to each student’s course of study.

How much will I make?

You’ll earn at least the current federal minimum wage, but the amount might be higher depending

on the type of work you do and the skills required. Your total Federal Work-Study award depends on

when you apply, your level of need, and the funding level of your school. Commissions or fees must

not be paid to Federal Work-Study students.

How will I be paid?

If you’re an undergraduate, you’ll be paid by the hour. If you’re a graduate student, you might be

paid by the hour or you might receive a salary. Your school must pay you at least once a month. Also,

your school must pay you directly, unless you request that the school make payments to your bank account or use the money to pay for your institutional charges such as tuition, fees, and room and board.

Are Federal Work-Study jobs on campus or off campus?

Both. If you work on campus, you’ll usually work for your school. If you work off campus, your

employer will usually be a private nonprofit organization or a public agency, and the work performed must be in the public interest. Some schools might have agreements with private for-profit

employers for Federal Work-Study jobs, which must be judged relevant to your course of study (to

the maximum extent possible). If you attend a proprietary school, there might be further restrictions

on the jobs you can be assigned.

Can I work as many hours as I want?

No. The amount you earn can’t exceed your total Federal Work-Study award. When assigning work hours,

your employer or financial aid administrator will consider your class schedule and your academic progress.

Federal Perkins Loans What is a Federal Perkins Loan?

A Federal Perkins Loan is a low-interest (5 percent) loan for both undergraduate and graduate students

with financial need. Your school is your lender. The loan is made with government funds, and your school

contributes a share. You must repay this loan to your school.
15

*See “Important Terms,”page 33.

Examples of Typical Payments for Perkins Loan Repayment

Total Loan 

Amount

Number of 

Payments 

Approximate 

Monthly Payment

Total Interest 

Charges

Total 

Repaid

 $4,000 120 $42.43 $1,091.01 $5,091.01

 $5,000 120 $53.03 $1,364.03 $6,364.03

 $15,000 120 $159.10 $4,091.73 $19,091.73

How much can I borrow?

Depending on when you apply, your level of need, and the school’s funding level, you can borrow up to

• $4,000 for each year of undergraduate study (the total amount you can borrow as an undergraduate

is $20,000).

• $6,000 for each year of graduate or professional study (the total amount you can borrow as a graduate/

professional student is $40,000, including any Federal Perkins Loans you borrowed as an undergraduate).

Other than interest, is there any charge to get these loans?

No, you’re not charged any fees to take out the loan. But, if you skip a payment, make a payment

late, or make less than a full payment, you might have to pay a late charge. If you continue not making

payments as required, you might have to pay collection costs as well.

How will I be paid?

Your school will either pay you directly (usually by check) or credit your account. Generally, you’ll

receive the loan in at least two payments during the academic year.*

Can I cancel the loan if I change my mind, even if I’ve signed the

promissory note* agreeing to the loan’s terms?

Yes. Your school must notify you in writing whenever it credits your account with your Perkins Loan

funds. The school must send you this notification no earlier than 30 days before, and no later than 30 days

after, the school credits your account. You may cancel all or a portion of your loan if you inform your

school you wish to do so within 14 days after the date your school sends you this notice, or by the first day

of the payment period, whichever is later. (Your school can tell you the first day of your payment period.)

If you receive Perkins Loan funds directly by check, you may refuse the funds by returning the check.

When do I pay back this loan?1

If you’re attending school at least half time,* you have nine months after you graduate, leave school, or

drop below half time* status before you must begin repayment (you might have longer than nine months

if you’re on active duty with the military). This period of time is called a grace period. If you’re attending

less than half time,* check with your financial aid administrator to determine your grace period. At the end

of your grace period, you must begin repaying your loan. You may be allowed up to 10 years to repay.

How much will I have

to repay each month?

Your monthly payment amount will

depend on the size of your debt and the

length of your repayment period.

The table at left shows typical monthly

payments and total interest charges for

three different 5-percent loans over a

10-year period.

1 The U.S. Department of Education (ED) has issued special guidance for those called to active duty as a result of the September 11 terrorist attacks. If a borrower’s loans are in an in-school status, in-school deferment status, or in a grace period

when the borrower is ordered to active duty or reassigned, the loan holder must maintain the loans in that status during

the period of the borrower’s active duty service or reassignment, plus the time necessary for the borrower to resume enrollment in the next regular enrollment period reasonably available to the borrower. The maintenance of loan status may not

exceed a total of three years, including the period of time necessary for the borrower to resume enrollment.

For a borrower whose loans are in repayment, the loan holder must grant a forbearance (temporary suspension of repayment) for the expected period of the borrower’s active duty status, beginning on the first day of active duty, not to exceed one

year. Forbearance beyond the initial period will require supporting documentation and a written agreement by the borrower.

For more information about loan repayment options that might be available to a borrower in this situation, the loan

holder should be contacted directly.
16

*See “Important Terms,”page 33.

Are there any tax credits available for paying back these loans?

Yes, there are tax incentives for certain higher education expenses, including a deduction for student

loan interest for certain borrowers. This benefit applies to federal and nonfederal loans used to pay for

postsecondary education costs. The maximum deduction is $2,500 a year. IRS Publication 970, Tax Benefits for Higher Education, explains these credits and other tax benefits. You can find out more by calling

the IRS at 1-800-829-1040. TTY callers can call 1-800-829-4059.

Is it ever possible to postpone repayment of my Federal Perkins Loan?

Yes, under certain conditions, you can receive a “deferment” or “forbearance” on your loan, as

long as the loan isn’t in default.* During a deferment, you’re allowed to temporarily postpone

payments, and no interest accrues (accumulates). Look under “Perkins Loans” on the chart on page 31

for the list of deferments available. Also, the school that made you your loan must automatically

defer your Federal Perkins Loan(s) during any periods where you perform a service that qualifies

you for loan cancellation. (See below for a description of loan cancellation; see the next page for a

list of service cancellations.)

Deferments are not automatic. You must apply for one through your school, generally by using a deferment request form your school can give you. You must file your deferment request on time or you’ll

pay a late charge. For more details on deferments, contact your school’s financial aid office.

If you temporarily can’t meet your repayment schedule but aren’t eligible for a deferment, you can

receive forbearance for a limited and specific period. During forbearance, your payments are postponed

or reduced, or your repayment period might be extended. Interest continues to accrue, however, and

you’re responsible for paying it.

Forbearance isn’t automatic either. You may be granted forbearance in intervals of up to 12 months

at a time for up to 3 years. You must apply in writing for forbearance to the school that made your loan

or to the agency the school employs to service your loan. You’ll have to provide documentation to

show why you should be granted forbearance.

You must continue making scheduled payments until you’re notified that deferment or forbearance has been granted. Otherwise, you could become delinquent or go into default.*

Is it ever possible to have my Federal Perkins Loan canceled?

Yes. Federal Perkins Loans can be canceled if the borrower dies or becomes totally and permanently

disabled, for example. A loan can also qualify for cancellation under certain other conditions, as long

as you’re not in default.* See the table on the next page for the list of cancellation provisions. For more

information, contact your financial aid office.

If you serve as an enlisted person in certain specialties of the Armed Forces, the U.S. Department of

Defense might, as an enlistment incentive, repay a portion of your student loan. Note that this is not a

cancellation. For more information, contact your recruiting officer.

Another type of repayment assistance (again, not a cancellation) is available through the U.S. Department of Health and Human Services’ Nursing Education Loan Repayment Program (NELRP). This

program will help repay student loans for registered nurses in exchange for their service in eligible facilities located in areas experiencing a shortage of nurses. All NELRP participants must enter into a contract agreeing to provide full-time employment in an approved eligible health facility (EHF) for 2 or 3

years. In return, the NELRP will pay 60 percent of the participant’s total qualifying loan balance for

two years or 85 percent of the participant’s total qualifying loan balance for three years. For more information, call NELRP, toll-free, at 1-866-813-3753 or visit www.bhpr.hrsa.gov/nursing/loanrepay.htm

If you have any questions about the terms of your Federal Perkins Loan, repayment obligations, deferment, forbearance, or cancellation, check with the school that made you the loan. Only that school

may grant deferment, forbearance, or cancellation, or make other decisions concerning your loan.
17

*See “Important Terms,”page 33.

Cancellation Conditions Notes Amount Forgiven

Borrower’s total and permanent disability2

 or death 

Full-time teacher in a designated 

elementary or secondary school serving students from 

low-income families

Full-time special education teacher (includes teaching 

children with disabilities in a public or other nonprofit elementary or secondary school) 

Full-time qualified professional provider of early intervention services for the disabled

Full-time teacher of math, science, foreign languages, bilingual education, or other fields designated as teacher 

shortage areas

Full-time employee of a public or nonprofit child- or family-services agency providing services to high-risk children 

and their families from low-income communities

Full-time nurse or medical technician

Full-time law enforcement or corrections officer

Full-time staff member in the education component of a 

Head Start Program

Vista or Peace Corps volunteer 

Service in the U.S. Armed Forces

Bankruptcy (in rare cases)

Closed school (before student could complete program of 

study) 

Service qualifies for deferment also.

Service qualifies for deferment also.

Service qualifies for deferment also. 

Service qualifies for deferment also. 

Service qualifies for deferment also.

Service qualifies for deferment also. 

Service qualifies for deferment also.

Service qualifies for deferment also.

Service qualifies for deferment also. 

Service qualifies for deferment also.

Service qualifies for deferment also.

Cancellation is possible only if the 

bankruptcy court rules that repayment would cause undue hardship.

For loans received on or after 

January 1, 1986.

100%

Up to 100% 

Up to 100%

Up to 100%

Up to 100%

Up to 100%

Up to 100%

Up to 100%

Up to 100%

Up to 70%

Up to 50% in areas 

of hostilities or imminent danger

Up to 100%

100%

1 As of October 7, 1998, all Perkins Loan borrowers are eligible for all cancellation benefits regardless of when the loan

was made or the terms of the borrower’s promissory note. However, this benefit is not retroactive to services performed

before October 7, 1998.

2 Beginning July 1, 2002, a borrower who is determined to be totally and permanently disabled will have his or her loan

placed in a conditional discharge period for three years from the date the borrower became totally and permanently

disabled. During this conditional period, the borrower doesn’t have to pay principal or interest. If the borrower

continues to meet the total-and-permanent disability requirements during, and at the end of, the three-year conditional

period, the borrower’s obligation to repay the loan is canceled. If the borrower doesn’t continue to meet the cancellation

requirements, the borrower must resume payment. Total and permanent disability is defined as the inability to work

and earn money because of an injury or illness that is expected to continue indefinitely or to result in death. For more

information on qualifying for this discharge, review your promissory note* and contact your loan holder.

More information on teaching service cancellation/deferment options can be found at www.studentaided.gov At the

site, click on “Repaying,” then on “Cancellation and Deferment Options for Teachers.”

Perkins Discharge/Cancellation Summary1
18

*See “Important Terms,”page 33.

FFEL and Direct Loan Programs

Besides the Federal Perkins Loan Program (see page 14), the U.S. Department of Education administers the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan

(Direct Loan) Program. Eligibility rules and loan amounts are identical under both programs, but the

repayment plans differ somewhat (see page 21). The main difference, however, is that you receive FFEL

funds from private lenders (such as banks, credit unions, or other lenders that participate in the FFEL

Program). Direct Loan funds come from the federal government to your school, which delivers the

loan proceeds to you. Often, a school will participate in just one or the other of these programs but

sometimes will participate in both. You can receive both FFELs and Direct Loans, but not both types for

the same period of enrollment at the same school.

Both the FFEL and Direct Loan programs consist of what are generally known as Stafford Loans (for

undergraduate and graduate students) and PLUS Loans, for the parents of dependent undergraduates

(see page 6 for a discussion of dependency status).

Stafford Loans What are Stafford Loans?

Direct and FFEL Stafford Loans are either subsidized or unsubsidized. You can receive a subsidized

loan and an unsubsidized loan for the same enrollment period.

A subsidized loan is awarded on the basis of financial need (see page 6). You won’t be charged any

interest before you begin repayment or during authorized periods of deferment (see page 22). The federal government “subsidizes” the interest during these periods.

An unsubsidized loan is not awarded on the basis of need. You’ll be charged interest from the time the

loan is disbursed until it’s paid in full. If you allow the interest to accrue (accumulate) while you’re in

school or during other periods of nonpayment, it will be capitalized—that is, the interest will be added

to the principal amount of your loan, and additional interest will be based on that higher amount.

NOTE: If your interest is capitalized, it will increase the amount you have to repay. You can choose to pay

the interest as it accumulates; if so, you’ll repay less in the long run.

Who can get a Stafford Loan?

If you’re a regular student* enrolled in an eligible program* at least half time,* you may receive a

Direct or FFEL Stafford Loan. You must also meet other general eligibility requirements (see page 5).

How do I get this loan?

You apply using the FAFSA or Renewal FAFSA (see “Applying,” page 7), just the way you would for other

federal student aid. Then, you sign a promissory note* that you’ll get from your lender, for FFEL Staffsord

Loans, or from your school, for Direct Loans. The promissory note* is a binding legal document; when you

sign it, you’re agreeing to repay your loan under certain terms. Read the note carefully and save it.

How much can I borrow?

If you’re a dependent undergraduate student (see “Dependency Status,” page 6), you can borrow annually up to

• $2,625 if you’re a first-year student enrolled in a program of study that is at least a full academic year.*

• $3,500 if you’ve completed your first year of study and the remainder of your program is at least a

full academic year.*

• $5,500 if you’ve completed two years of study and the remainder of your program is at least a full

academic year.*

If you’re an independent undergraduate student or a dependent student whose parents are unable to

get a PLUS Loan (see page 24), you can borrow annually up to

• $6,625 if you’re a first-year student enrolled in a program of study that is at least a full academic

year* (only $2,625 of this amount may be in subsidized loans).
19

*See “Important Terms,”page 33.

1st

Year

2nd

Year

3rd & 4th

Years

Maximum Total 

Debt from 

Stafford Loans 

When You 

Graduate

Dependent

Undergraduate Student

$2,625 $6,625—Only $2,625 of this amount 

may be in subsidized loans.

$3,500 $7,500—Only $3,500 of this amount 

may be in subsidized loans.

$5,500

$23,000 as a dependent 

undergraduate student

$46,000 as an independent undergraduate student (only $23,000 of this 

amount may be in subsidized loans).

$138,500 as a graduate or professional student 

(only $65,500 of this amount may be in 

subsidized loans). 

The graduate debt limit includes Stafford Loans 

received for undergraduate study.

$10,500—Only $5,500 of this amount 

may be in subsidized loans.

Up to $18,500 each academic year 

(only $8,500 of this amount may be in 

subsidized loans).

Independent 

Undergraduate Student 

Graduate 

Student

• $7,500 if you’ve completed your first year of study and the remainder of your program is at least a full

academic year* (only $3,500 of this amount may be in subsidized loans).

• $10,500 if you’ve completed two years of study and the remainder of your program is at least a full

academic year* (only $5,500 of this amount may be in subsidized loans).

For periods of study that are less than an academic year,* the amounts you can borrow will be less

than those listed. Check with your school’s financial aid office to find out how much you can borrow.

NOTE: Stafford Loans are not made to students enrolled in programs that are less than one-third of an

academic year.*

Generally, if you’re a graduate student, you can borrow up to $18,500 each academic year.* (Only $8,500

of this amount may be in subsidized Stafford Loans.)

NOTE: The amounts given above are the maximum yearly amounts you can borrow in both subsidized and

unsubsidized loans. You might receive less than these amounts if you receive other financial aid

that is used to cover a portion of your cost of attendance.*

Generally, the total debt you can have outstanding from all Stafford Loans combined is

• $23,000 as a dependent undergraduate student.

• $46,000 as an independent undergraduate student (only $23,000 of this amount may be in subsidized loans).

• $138,500 as a graduate or professional student (only $65,500 of this amount may be in subsidized

loans). The graduate debt limit includes any Stafford Loans received for undergraduate study.

NOTE: Your school can refuse to certify your loan application or can certify a loan for an amount less than

you would otherwise be eligible for if the school documents the reason for its action and explains

the reason to you in writing. The school’s decision is final and cannot be appealed to the U.S.

Department of Education.

Annual Loan Limits for Subsidized and Unsubsidized Stafford Loans

How will I receive my Stafford Loan?

The loan funds will be sent to your school. In most cases, your loan will be disbursed in at least two

installments, and no installment will be greater than half the amount of your loan.

Your loan money must first be used to pay for your tuition, fees, and room and board. If loan funds

remain, you’ll receive them by check or in cash, unless you give the school written permission to hold

the funds until later in the enrollment period.
20

*See “Important Terms,”page 33.

If you’re both a first-year undergraduate student and a first-time borrower, your first disbursement

can’t be made until 30 days after the first day of your enrollment period. That way, you won’t have to

repay the loan if you withdraw during the first 30 days of classes. (However, you might owe money to

the school for a portion of tuition or other fees.)

Can I cancel the loan if I change my mind, even if I’ve signed the promissory note*

agreeing to the loan’s terms?

Yes. Your school must notify you in writing whenever it credits your account with your Stafford Loan

funds. This notification must be sent to you no earlier than 30 days before, and no later than 30 days

after, the school credits your account. You may cancel all or a portion of your loan if you inform your

school within 14 days after the date your school sends you this notice, or by the first day of the payment period, whichever is later. (Your school can tell you the first day of your payment period.) If you

receive Stafford Loan funds directly by check, you may refuse the funds by returning the check.

What’s the interest rate on these loans?

The interest rate is variable (might change each year) but does not exceed 8.25 percent. For July 1,

2002 to June 30, 2003, the interest rate for loans in repayment was 4.06 percent. Interest rates are adjusted each year on July 1. You’ll be notified of interest rate changes throughout the life of your loan.

Congress changed the interest rate calculation for Stafford Loans made on or after July 1, 1998. If

you have loans first disbursed before that date, your interest rate might be different. For interest rates on

a FFEL Stafford Loan, check with your lender. For interest rates on a Direct Stafford Loan, check with

the Direct Loan Servicing Center (see page 23).

If you have subsidized loans (see page 18), you won’t be charged interest while you’re enrolled in

school at least half time,* during a grace period, or during authorized periods of deferment (see page 22).

Interest will begin to accrue (accumulate) when you enter repayment.

If you have unsubsidized loans, you’ll be charged interest from the day the loan is disbursed until it’s

paid in full, including in-school, grace, and deferment periods. You can pay the interest during these

periods, or it can be capitalized (see page 18).

Other than interest, is there any charge to get the loans?

You’ll pay a fee of up to 4 percent of the loan, deducted proportionately from each loan disbursement. For a FFEL Stafford Loan, a portion of this fee goes to the federal government, and a portion goes

to the guaranty agency* to help reduce the cost of the loans. For a Direct Stafford Loan, the entire fee

goes to the government to help reduce the cost of the loans. Also, if you don’t make your loan payments when scheduled, you may be charged collection costs and late fees.

When do I pay back these loans?1

After you graduate, leave school, or drop below half time* enrollment, you have six months before

you begin repayment. This period of time is called a grace period.

During the grace period on a subsidized loan, you don’t have to pay any principal, and you won’t be

charged interest. During the grace period on an unsubsidized loan, you don’t have to pay any principal,

but you will be charged interest. You can either pay the interest or it will be capitalized.

1 The U.S. Department of Education (ED) has issued special guidance for those called to active duty as a result of the September 11 terrorist attacks. If a borrower’s loans are in an

in-school status, in-school deferment status, or in a grace period when the borrower is ordered to active duty or reassigned, the loan holder must maintain the loans in that status

during the period of the borrower’s active duty service or reassignment, plus the time necessary for the borrower to resume enrollment in the next regular enrollment period reasonably available to the borrower. The maintenance of loan status may not exceed a total of three years, including the period of time necessary for the borrower to resume enrollment.

For a borrower whose loans are in repayment, the loan holder must grant a forbearance (temporary suspension of repayment) for the expected period of the

borrower’s active duty status, beginning on the first day of active duty, not to exceed one year. Forbearance beyond the initial period will require supporting documentation and a written agreement by the borrower.

For more information about loan repayment options that might be available to a borrower in this situation, the loan holder should be contacted directly.
21

*See “Important Terms,”page 33.

After you leave school or drop below half time* enrollment, your lender will send you information

about repayment and you’ll be notified of the date repayment begins. However, you’re responsible for

beginning repayment on time, even if you don’t receive this information. Failing to make payments on

your loan is likely to have a negative effect on your credit rating.

How do I pay back my Stafford Loans?

You’ll repay your FFEL Stafford Loan to a private lender or loan servicer. You’ll repay your Direct

Loan to the U.S. Department of Education’s Direct Loan Servicing Center. Direct Loan borrowers can

view and pay their bills online through the Servicing Center Web site: www.dl.ed.gov

Both the Direct Loan and FFEL programs offer four repayment plans you can choose from, but the

terms differ slightly. Your school will provide more detailed information on your repayment options

during entrance and exit counseling sessions. The chart on page 22 shows estimated monthly payments

for various loan amounts under each plan.

If you don’t choose a repayment plan when you first begin repayment, you’ll be placed under

the Standard Repayment Plan. You can change plans throughout the life of your loan, as long as

the maximum repayment period under your new plan is longer than the length of time your loans

have already been in repayment. Under the FFEL Program, you can change plans once a year.

Under the Direct Loan Program, you can change plans any time.

In some cases, it might be beneficial for you to combine one or more of your loans into a Consolidation Loan. See page 27 for more information on loan consolidation.

Direct Loans—The Direct Loan Program offers the following repayment plans:

• The Standard Repayment Plan requires you to pay a fixed amount each month—at least $50—for

up to 10 years. The length of your repayment period will depend on your loan amount.

• The Extended Repayment Plan allows you to repay your loan over a period that is generally 12

to 30 years, depending on your loan amount. Your monthly payment might be lower than it

would be if you repaid the same total loan amount under the Standard Repayment Plan, but

you’ll repay a higher total amount of interest over the life of your loan because the repayment

period is longer. The minimum monthly payment is $50.

• Under the Graduated Repayment Plan, your payments will be lower at first and then increase, usually every two years. The length of your repayment period will generally range from 12 to 30 years, depending

on your loan amount. Your initial monthly payments will be equal to either the interest that accumulates

on your loan between payments or half the payment you’d make each month using the Standard Repayment Plan, whichever is greater. However, your monthly payments will never increase to more than 1.5

times what you’d pay under the Standard Repayment Plan. You’ll repay a higher total amount of interest,

though, because the repayment period is longer than it is under the Standard Repayment Plan.

• The Income Contingent Repayment Plan bases your monthly payment on your yearly income, family

size, interest rate, and loan amount. As your income rises or falls, so do your payments. After 25 years,

any remaining balance on the loan will be forgiven, but you’ll have to pay taxes on the amount forgiven.

Loan payments are made to the U.S. Department of Education. For more information on repayment

options, you can access the Direct Loans Repayment Book on the Internet at www.ed.gov/offices/OSFAP/

DirectLoan/index.html

FFEL Program—Under the FFEL Program, aspects of these repayment plans will vary by lender because

individual lenders can tailor the repayment plans. Check with your lender for complete information.

The FFEL Program offers the following repayment plans:

• The Standard Repayment Plan requires you to pay a fixed amount each month—at least $50.

• Under a Graduated Repayment Plan, your payments will be lower at first and then increase over time. Each

payment must at least equal the interest accrued (accumulated) on the loan between scheduled payments.
22

*See “Important Terms,”page 33.

Standard2 Extended 

For Direct Loans only: Income 

Contingent3 (Income=$25,000)

Single Married/HOH4

 $2,500 $50 $3,074 $50 $3,074 $25 $4,029 $22 $4,560 $21 $4,941

 $5,000 $61 $7,359 $55 $7,893 $35 $8,646 $45 $9,120 $42 $9,482

 $7,500 $92 $11,039 $82 $11,840 $53 $12,970 $67 $13,680 $64 $14,223

 $10,000 $123 $14,718 $97 $17,462 $69 $19,175 $90 $18,240 $85 $18,964

 $15,000 $184 $22,078 $146 $26,194 $103 $28,762 $135 $27,360 $127 $28,446

Total Debt 

When

Borrower 

Enters 

Repayment

Per 

Month

Total 

Repaid

Per 

Month

Total 

Repaid

Per 

Month

Total 

Repaid

Per 

Month

Total 

Repaid

Per 

Month

Total 

Repaid

Graduated 

1 Payments are calculated using the maximum interest rate of 8.25% for student borrowers. For July 1, 2002 to

June 30, 2003, the interest rate for loans in repayment was calculated at 4.06 percent. Interest rates are adjusted

each year on July 1.

2 Equal and fixed monthly payments ($50 minimum).

3 Assumes a 5% annual income growth (Census Bureau).

4 HOH is Head of Household. Assumes a family size of two.

Examples of Typical Beginning Payments for Direct and FFEL Stafford Loan Repayment Plans1

Monthly Payments and Total Repaid Under Different Repayment Plans

• An Income Sensitive Repayment Plan bases your monthly payment on your yearly income and your

loan amount. As your income rises or falls, so do your payments. Each payment must at least equal the

interest accrued on the loan between scheduled payments.

• The Extended Repayment Plan is available to new FFEL borrowers who received their first loan on

or after October 7, 1998, and who have FFELs totaling more than $30,000. Under the Extended Repayment Plan, your payments will be fixed or graduated (lower at first and then increased over time)

over a period of up to 25 years.

As is true with Direct Loans, spreading your payments out over time might mean lower monthly payments, but you’ll repay more because you’ll pay more interest.

Are there any tax credits available for paying back these loans?

Yes, there are tax incentives for certain higher education expenses, including a deduction for student

loan interest for certain borrowers. This benefit applies to federal and nonfederal loans taken out to pay

for postsecondary education costs. The maximum deduction is $2,500 a year. IRS Publication 970, Tax

Benefits for Higher Education, explains these credits and other tax benefits. You can find out more by

calling the IRS at 1-800-829-1040. TTY callers can call 1-800-829-4059.

Is it ever possible to postpone repayment of my loan?

Yes, under certain conditions, you can receive a “deferment” or “forbearance” on your loan, as long as

the loan isn’t in default.* A deferment allows you to temporarily postpone payments on your loan. If

you have a subsidized loan, you won’t be charged interest during the deferment. If your loan is

unsubsidized, you’ll be responsible for the interest during the deferment. In that case, if you don’t pay the

interest as it accrues (accumulates), it will be capitalized and the amount you’ll have to pay will increase

(see page 18). See page 31 for the list of deferments available for loans disbursed on or after July 1, 1993.
23

*See “Important Terms,”page 33.

For information on deferments available to borrowers with outstanding loans received before that

date, FFEL Stafford borrowers should contact the lenders or agencies holding the loans. Direct Stafford

Loan borrowers can contact the Direct Loan Servicing Center at

The Direct Loan Servicing Center

Borrower Services: 1-800-848-0979 or 1-315-738-6634

Fax: 1-800-848-0984

TTY: 1-800-848-0983

www.dl.ed.gov

If you’re temporarily unable to meet your repayment schedule, but you’re not eligible for a deferment, your lender might grant you forbearance for a limited and specified period. During forbearance,

your payments are postponed or reduced, or your repayment period might be extended. Whether your

loans are subsidized or unsubsidized, you’ll be charged interest during a period of forbearance. If

you don’t pay the interest as it accrues, it will be capitalized.

You might be granted forbearance if you are

• unable to pay due to poor health or other unforeseen personal problems.

• serving in a medical or dental internship or residency.

• serving in a position under the National Community Service Trust Act of 1993 (forbearance may be

granted for this reason for a Direct or FFEL Stafford Loan, but not for a PLUS Loan).

• obligated to make payments (on certain federal student loans) that are equal to or greater than 20

percent of your monthly gross income.

This is not a complete list of conditions that might qualify you for forbearance but offers

some examples.

Deferment and forbearance are not automatic. If you have a Direct Stafford Loan, you must contact

your Direct Loan Servicing Center to request either option. If you have a FFEL Stafford Loan, you must

contact the lender or agency that holds your loan. You might have to provide documentation to support your request. You must continue making scheduled payments until you’re notified that the deferment or forbearance has been granted. Not making payments on your loan is likely to have a negative

effect on your credit rating, and your loan could go into default.*

Is it ever possible to have my Stafford Loan discharged (canceled)?

Yes, in certain circumstances. A discharge releases you from all obligations to repay the loan. A complete

list of cancellation provisions is given on the next page.

Your loan can’t be canceled because you didn’t complete the program of study at the school (unless you

couldn’t complete the program for a valid reason—because the school closed, for example), you didn’t like the

school or the program of study, or you didn’t obtain employment after completing the program of study.

For more information about discharge, Direct Stafford Loan borrowers should contact the Direct Loan

Servicing Center. FFEL Stafford Loan borrowers should contact the lenders or agencies holding their loans.

Repayment assistance (not a discharge but another way to satisfy your obligation to repay) might be

available if you serve in the military. For more information, contact your recruiting officer.

Another type of repayment assistance (again, not a discharge) is available through the U.S. Department

of Health and Human Services’ Nursing Education Loan Repayment Program (NELRP). This program will

help repay student loans for registered nurses in exchange for their service in eligible facilities located in

areas experiencing a shortage of nurses. All NELRP participants must enter into a contract agreeing to provide full-time employment in an approved eligible health facility (EHF) for 2 or 3 years. In return, the

NELRP will pay 60 percent of the participant’s total qualifying loan balance for two years or 85 percent of

the participant’s total qualifying loan balance for three years. For more information, call NELRP, toll-free,

at 1-866-813-3753 or visit www.bhpr.hrsa.gov/nursing/loanrepay.htm
24

*See “Important Terms,”page 33.

Cancellation Conditions Amount Forgiven

Borrower’s total and permanent 

disability1 or death

Full-time teacher for five consecutive 

years in a designated elementary or 

secondary school serving students 

from low-income families

Bankruptcy (in rare cases)

Closed school (before student could 

complete program of study) or false 

loan certification

School does not make required return of loan funds to the lender

100% 

Up to $5,000 of the aggregate loan amount 

that is outstanding after completion of the 

fifth year of teaching.

A borrower might qualify for loan forgiveness under the Direct Consolidation and 

the FFEL Consolidation Loan programs. If 

so, only the portion of the consolidation 

loan used to repay Direct Stafford Loans or 

FFEL Stafford Loans qualifies.

100%

100%

Up to the amount that the school was 

required to return.

For a PLUS Loan, includes death but not disability 

of the student for whom the parents borrowed.

For Direct and FFEL Stafford Loans received on or 

after October 1, 1998, by a borrower with no outstanding loan balance as of that date. At least one 

of the five consecutive years of teaching must 

occur after the 1997-98 academic year. (To find 

out whether your school is considered a low-income school, visit www.studentaid.ed.gov.

Click on "Repaying," then click on "Cancellation 

and Deferment Options for Teachers." Or, call 

1-800-4-FED-AID.)

Cancellation is possible only if the bankruptcy 

court rules that repayment would cause undue 

hardship.

For loans received on or after January 1, 1986

For loans received on or after January 1, 1986

Notes

PLUS Loans

(Loans to Parents)

What are PLUS Loans?

They’re loans your parents can take out to pay for your education expenses if you’re a dependent undergraduate student enrolled at least half time.* (See page 6 for a discussion of dependency status.)

Also, your parents must have no adverse credit history. As is true for Stafford Loans (see page 18), there

are FFEL PLUS Loans and Direct PLUS Loans. PLUS Loans are unsubsidized (see page 18).

Can my parents get both a Direct PLUS Loan and a FFEL PLUS Loan for me?

They can apply for either a Direct PLUS Loan or a FFEL PLUS Loan, but not for both for you during

the same enrollment period. Your parents could, however, apply for a Direct PLUS Loan for you and a

FFEL PLUS Loan for one of your siblings, for example.

How do my parents apply?

For a Direct PLUS Loan, your parents must complete a Direct PLUS Loan application and promissory

note,* contained in a single form that you get from your school’s financial aid office.

For a FFEL PLUS Loan, your parents must complete and submit a PLUS Loan application, available

from your school, lender, or your state guaranty agency.* After the school completes its portion of the

application, it must be sent to a lender for evaluation.

Although it’s not a requirement, parents are encouraged to have their dependent children file a FAFSA,

so their children can receive the maximum student aid they’re eligible for.

Direct Loan and FFEL Discharge/Cancellation Summary

1

Beginning July 1, 2002, a borrower who is determined to be totally and permanently disabled will have his or her loan placed in a conditional discharge period

for three years from the date the borrower became totally and permanently disabled. During this conditional period, the borrower doesn’t have to pay principal

or interest. If the borrower continues to meet the total-and-permanent disability requirements during, and at the end of, the three-year conditional period, the

borrower’s obligation to repay the loan is canceled. If the borrower doesn’t continue to meet the cancellation requirements, the borrower must resume payment.

Total and permanent disability is defined as the inability to work and earn money because of an injury or illness that is expected to continue indefinitely or to

result in death. More information on this discharge can be found in the promissory note* and by contacting the loan holder.
25

*See “Important Terms,”page 33.

Are there any borrowing requirements my parents have to meet?

Yes, generally they have to pass a credit check. If they don’t pass, they might still be able to receive a loan

if someone, such as a relative or friend who can pass the credit check, agrees to endorse the loan and

promises to repay it if your parents don’t. Your parents might also qualify for a loan if they don’t pass the

credit check if they can demonstrate that extenuating circumstances exist. For them to borrow for you, you

must meet the general eligibility requirements for federal student aid (see page 5), and your parents must

also meet some of these general requirements. For example, they must meet citizenship requirements or be

eligible noncitizens* and may not be in default* or owe a refund to any FSA program.

Do they need to find a lender?

Not if they borrow under the Direct Loan Program, because their lender will be the U.S. Department

of Education. Your school assists the federal government in administering the Direct Loan Program by

distributing the loan application, processing the loan, and disbursing the loan funds.

Under the FFEL Program, your parents will need to find a participating lender. For help, they should

contact your school or the guaranty agency* that serves your state. For your state agency’s address and telephone number, and for more information about borrowing, your parents can contact the Federal Student

Aid Information Center at the address or toll-free number listed on page 12. A directory of guaranty agencies is also available at this U.S. Department of Education Web site: www.ed.gov/Programs/bastmp/SGA.htm

How much can my parents borrow?

The yearly limit on a PLUS Loan is equal to your cost of attendance* minus any other financial aid

you receive. For example, if your cost of attendance* is $6,000 and you receive $4,000 in other financial

aid, your parents could borrow up to—but no more than—$2,000.

Do they get the money or do I?

Either the U.S. Department of Education (for a Direct PLUS Loan) or your parents’ lender (for a FFEL

PLUS Loan) will send the loan funds to your school. Your school might require your parents to endorse a

disbursement check and send it back to the school. In most cases, the loan will be disbursed in at least two

installments, and no installment will be greater than half the loan amount. The funds will first be applied

to your tuition, fees, room and board, and other school charges. If any loan funds remain, your parents

will receive the amount as a check or in cash, unless they authorize the amount to be released to you or to

be put into your school account. Any remaining loan funds must be used for your education expenses.

Can my parents cancel the loan if they change their minds, even if they’ve

signed the promissory note* agreeing to the loan’s terms?

Yes. Your school must notify your parents in writing whenever it credits your account with PLUS

Loan funds. This notification must be sent to your parents no earlier than 30 days before, and no later

than 30 days after, the school credits your account. Your parents may cancel all or a portion of their

loan if they inform your school within 14 days after the date your school sends this notice, or by the

first day of the payment period, whichever is later. (Your school can tell you the first day of your payment period.) If your parents receive PLUS Loan funds directly by check, they may refuse the funds by

not endorsing the check.

What’s the interest rate on PLUS Loans?

The interest rate could change each year of repayment but does not exceed 9 percent. For July 1, 2002 to

June 30, 2003, the interest rate for PLUS Loans in repayment was 4.86 percent. Interest rates are adjusted

each year on July 1. Your parents will be notified of interest rate changes throughout the life of their loan.

Interest is charged on the loan from the date the first disbursement is made until the loan is paid in full.

Congress changed the interest rate calculation for PLUS loans made on or after July 1, 1998. If your

parents had PLUS loans first disbursed before that date, the interest rate might be different. For interest

rates on a FFEL Stafford Loan, your parents should check with their lender. For interest rates on a Direct

Stafford Loan, they should check with the Direct Loan Servicing Center (see page 23).

NOTE: Your school can

refuse to certify your parents’ loan application, or

can certify a loan for an

amount less than they

would otherwise be eligible

for, if the school documents

the reason for its action

and explains the reason to

your parents in writing.

The school’s decision is

final and cannot be appealed to the U.S. Department of Education.
26

*See “Important Terms,”page 33.

Other than interest, is there a charge to get a PLUS Loan?

Your parents will pay a fee of up to 4 percent of the loan, deducted proportionately each time a loan

disbursement is made. For a FFEL PLUS Loan, a portion of this fee goes to the federal government, and a

portion goes to the guaranty agency* to help reduce the cost of the loans. For a Direct PLUS Loan, the

entire fee goes to the government to help reduce the cost of the loans. Also, if your parents don’t make

their loan payments when scheduled, your parents may be charged collection costs and late fees.

When do my parents begin repaying a PLUS Loan?

Generally, repayment must begin within 60 days after the final loan disbursement for the period of

enrollment for which you borrowed. There is no grace period for these loans. This means interest begins to accumulate at the time the first disbursement is made. Your parents must begin repaying both

principal and interest while you’re in school.

How do my parents pay back the loan?

For Direct PLUS Loans, your parents can choose the Standard, Extended, or Graduated Repayment Plan

(see page 21). The Income Contingent Repayment Plan is not an option for Direct PLUS borrowers. A Direct

PLUS Loan can also be consolidated. (See below for more information on loan consolidation.)

For FFEL PLUS Loans, parents can usually choose the Standard, Extended, Graduated, or Income

Sensitive Plan (see page 21). FFEL PLUS Loans can also be consolidated.

Are there any tax credits available for paying back these loans?

Yes, there are tax incentives for certain higher education expenses, including a deduction for student

loan interest for certain borrowers. This benefit applies to federal and nonfederal loans taken out to pay

for postsecondary education costs. The maximum deduction is $2,500 a year. IRS Publication 970, Tax

Benefits for Higher Education, explains these credits and other tax benefits. You can find out more by

calling the IRS at 1-800-829-1040. TTY callers can call 1-800-829-4059.

Is it ever possible to postpone repayment of a PLUS Loan?

Yes, under certain circumstances, your parents can receive a deferment or forbearance on their loan,

as long as the loan isn’t in default.* Deferment and forbearance are explained on pages 22 and 23.

Generally, the conditions for eligibility and procedures for requesting a deferment or forbearance that

apply to Stafford Loans also apply to PLUS Loans. However, since all PLUS Loans are unsubsidized,

your parents will be charged interest during periods of deferment or forbearance. If they don’t pay the

interest as it accrues, it will be capitalized (see page 18).

Can a PLUS Loan be discharged (canceled)?

Yes, under certain conditions. A discharge releases your parents from all obligation to repay the loan.

(See page 24 for a complete listing of cancellation provisions.)

Your parents’ PLUS Loan can’t be canceled because you didn’t complete your program of study at

your school (unless you couldn’t complete the program for a valid reason—because the school closed,

for example), you didn’t like the school or the program of study, or you didn’t obtain employment after completing the program of study.

For more information about loan discharge or repayment, your parents should contact the Direct

Loan Servicing Center at 1-800-848-0979 if they have a Direct PLUS Loan. If they have a FFEL PLUS

Loan, they should contact the lender or agency holding the loan.
27

*See “Important Terms,”page 33.

Consolidation Loans A Consolidation Loan can help you (and your parents, if they borrowed for you) simplify loan repayment by allowing you (and your parents) to combine several types of federal student loans with

various repayment schedules into one loan. The repayment process is simpler because you make only

one payment a month. Also, the interest rate on the Consolidation Loan might be lower than what

you’re currently paying on one or more of your loans. Even if you’re in default* on a federal student

loan, you might be eligible for a Consolidation Loan if certain conditions are met.

Note that a lender may not refuse to consolidate your loans because of

• the number or type of eligible loans you want to consolidate.

• the type of school you attended.

• the interest rate you would be charged on a consolidation loan.

• the types of repayment schedules available to you.

What types of consolidation loans are there?

Direct Consolidation Loans are available from the U.S. Department of Education. FFEL Consolidation

Loans are available from participating lenders such as banks, credit unions, and savings and loan associations.

There are three categories of Direct Consolidation Loans: Direct Subsidized Consolidation Loans, Direct

Unsubsidized Consolidation Loans, and Direct PLUS Consolidation Loans. If you have loans from more

than one category, you still have only one Direct Consolidation Loan and make only one monthly payment.

Under the FFEL Program, you can receive a Subsidized and/or an Unsubsidized FFEL Consolidation

Loan, depending on the types of loans you’re consolidating. (Federal PLUS Consolidation Loans are

included under the Unsubsidized FFEL Consolidation Loan category.)

What kinds of loans can be consolidated?

All the loans discussed in this publication are eligible for consolidation, and others can be included. For a

FFEL Consolidation Loan, a participating lender can give you a complete list of eligible loans. For a Direct Consolidation Loan, the Loan Origination Center’s Consolidation Department can give you a complete list. Contact

Loan Origination Center’s Consolidation Department

1-800-557-7392

TTY users may call 1-800-557-7395.

www.loanconsolidation.ed.gov

Who’s eligible for a Consolidation Loan?

You can get a FFEL Consolidation Loan during your grace period, once you’ve entered repayment, or during

periods of deferment or forbearance. If you’re in default* on a federal student loan, you still might be able to

receive a FFEL Consolidation Loan, provided the defaulted loan is not subject to a judgment or wage garnishment. For more information, contact a lender that participates in the FFEL Consolidation Loan Program.

You can also get a Direct Consolidation Loan during your grace period, once you’ve entered repayment,

or during periods of deferment or forbearance. You must consolidate at least one Direct Loan or FFEL,

however. If you don’t have a Direct Loan, but you have a FFEL, you must first contact a FFEL lender who

makes FFEL Consolidation Loans to ask about getting a FFEL Consolidation Loan. If you can’t get such a

loan, or you can’t get one with income-sensitive repayment terms acceptable to you—and you’re eligible for

the Direct Loan Income Contingent Repayment Plan—you’re eligible to apply for a Direct Consolidation

Loan. If you’re in default* on a federal student loan, you might be able to receive a Direct Consolidation

Loan. For more information, contact the Loan Origination Center’s Consolidation Department (see above).

One difference between Direct and FFEL Consolidation Loans is that you can get a Direct Consolidation Loan while you’re in school. You must be attending at least half time* and have at least one Direct

Loan or FFEL in an “in-school period.” (Generally, your loan is in an in-school period if you have been

continuously enrolled at least half time* since the loan was disbursed.) In addition, if the school

you’re attending is not a school that participates in the Direct Loan Program, at least one of the loans

you consolidate must be a Direct Loan.
28

*See “Important Terms,”page 33.

How can I get a Consolidation Loan?

You’ll be given more information about Consolidation Loans during entrance and exit counseling

sessions at your school. For a FFEL Consolidation Loan, you can also contact the consolidation department of a participating lender for an application or more information. (Your parents should do the

same thing if they want to apply for a FFEL PLUS Consolidation Loan.) If the same holder holds all the

loans you want to consolidate, you must obtain your consolidation loan from that holder, unless you

haven’t been able to get a loan with income-sensitive repayment terms.

For Direct Loans, you (and your parents, for a Direct PLUS Consolidation Loan) can contact the Direct Loan

Origination Center’s Consolidation Department at the number and Web site address listed on page 27.

Note that if your parents want to apply for a FFEL PLUS Consolidation Loan, no credit checks are required. If they want to apply for a Direct PLUS Consolidation Loan, they are subject to a check for adverse credit history.

How do I pay back a Consolidation Loan?

All the FFEL Stafford Loan repayment plans (see page 21) are available to FFEL Consolidation

Loan borrowers. For Direct Consolidation Loan borrowers, the Direct Loan repayment plans listed

on page 21 generally are available, except that Direct PLUS Consolidation Loans are not eligible to be

repaid under the Income Contingent Repayment Plan or might not be eligible for some discharge/

cancellation benefits.

What’s the interest rate on a Consolidation Loan?

As of February 1, 1999, the interest rate for both Direct Consolidation Loans and FFEL Consolidation Loans became a fixed rate for the entire time you’re repaying the loan. The fixed rate is based on

the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest

one-eighth of a percent. The interest rate does not exceed 8.25 percent.

Prior to February 1, 1999 Consolidation Loans had variable interest rates. For information on these Consolidation Loans, check with your lender if you have a FFEL Consolidation Loan, or with the Direct Loan

Origination Center’s Consolidation Department (see page 27) if you have a Direct Consolidation Loan.

Are there any disadvantages to getting a consolidation loan?

Yes, there could be. Keep in mind that consolidation significantly increases the total cost of repaying

your loans. You might have a longer period of time to repay a consolidation loan, but you’ll make

more payments and pay more interest. In fact, consolidation can double total interest expense. So,

compare the cost of repaying your unconsolidated loans with the cost of repaying a consolidation loan.

You should also take into account whether you lose any borrower benefits offered under non-consolidated repayment plans, such as interest rate discounts or principal rebates, which can significantly

reduce the cost of repaying your loans. Also, you might lose some discharge (cancellation) benefits if

you include a Federal Perkins Loan in a FFEL Consolidation Loan or Direct Consolidation Loan.

Once made, consolidation loans can’t be unmade because the loans that were consolidated have

been paid off and no longer exist. Take the time to study your consolidation options before you apply.
29

*See “Important Terms,”page 33.

Responsibilities WHEN YOU TAKE OUT A STUDENT LOAN, you have certain responsibilities. Here are some

important ones:

• When you sign a promissory note,* you’re agreeing to repay the loan according to the terms of the

note. The note states that except in cases of loan discharge (see pages 17 and 24), you must repay the

loan, even if you don’t complete your education (unless you couldn’t for a valid reason—because the

school closed, for example). Also, you still must repay your loan if you can’t get a job after you complete the program, or you don’t like, or don’t receive, the education you paid for.

• Think about what your repayment obligation means before you take out a loan. If you don’t repay

your loan on time or according to the terms in your promissory note,* you might go into default,*

which has very serious consequences and will affect your credit rating.

• You must make payments on your loan even if you don’t receive a bill or repayment notice. Billing

statements (or coupon books) are sent to you as a convenience, but you’re obligated to make payments even if you don’t receive any reminders. You must also make monthly payments in the full

amount your repayment plan has established. Partial payments do not fulfill your obligation.

• If you apply for a deferment or forbearance, you must continue to make payments until you’re notified

the request has been granted. If you don’t, you might end up in default.* You should keep a copy of

any request form you submit, and you should document all contacts with the organization that holds

your loan. You must notify the loan servicer when you graduate, withdraw from school, or drop below

half time* status; change your name, address, or Social Security Number; or transfer to another school.

• If you borrow a Perkins Loan, either the school that lends you the money will service your loan or an

agency the school employs will.

• If you borrow a Direct Loan, the Direct Loan Servicing Center will service your loan.

• If you borrow under the FFEL Program, your lender or its servicing agent will service your loan. During your loan counseling session, you’ll be given the name of the loan servicer(s).

• Regardless of the type of loan you borrow, you must receive entrance counseling before you’re given

your first loan disbursement, and you must receive exit counseling before you leave school. Your

school will provide the counseling and important information about your loan. Your lender will give

you additional information about your loan.

Rights You have certain rights as a borrower. Listed below are some of them.

• Before your school makes your first loan disbursement, you’ll receive the following information

about your loan from your school, lender, and/or the Direct Loan Servicing Center:

– the full amount of the loan;

– the interest rate;

– the date you must start repaying the loan (based on the anticipated graduation date recorded on the

promissory note*);

– a complete list of any charges you must pay (loan fees) and information on how those charges are

collected;

– information about the yearly and total amounts you can borrow;

– information about the maximum repayment periods and the minimum repayment amount;

– an explanation of default* and its consequences;

– an explanation of available options for consolidating or refinancing your loan; and

– a statement that you can prepay your loan at any time without penalty.

Borrower Responsibilities

& Rights
30

*See “Important Terms,”page 33.

• Your school must notify you (or your parents, for a PLUS Loan) in writing whenever it credits your

account with Stafford Loan, PLUS Loan, or Perkins Loan funds. This notification must be sent no

earlier than 30 days before, and no later than 30 days after, the school credits your account. You (or

your parents, for a PLUS Loan) may cancel all or a portion of the loan by informing your school

within 14 days after the date your school sends this notice, or by the first day of the payment period,

whichever is later. (Your school can tell you the first day of your payment period.) If you or your parents receive loan funds directly by check, the funds may be refused by returning the check.

• Before you leave school, you’ll receive the following information about your loan from your school,

lender, and/or the Direct Loan Servicing Center:

– the amount of your total debt (principal and estimated interest), what your interest rate is, and the

total interest charges on your loan;

– if you have FFELs, the name of the lender or agency that holds your loans, where to send your payments, and where to write or call if you have questions;

– if you have Direct Loans, the address and telephone number of the Direct Loan Servicing Center;

– an explanation of the fees you might be charged during the repayment period, such as late charges

and collection or litigation costs if you’re delinquent or in default;*

– an explanation of available options for consolidating or refinancing your loan; and a statement

that you can prepay your loan without penalty at any time.

If you borrow a Federal Perkins Loan, your school will provide this information to you. If you borrow a Direct Loan or a FFEL, the Direct Loan Servicing Center or your lender will provide this information to you, respectively.

• If you have Direct or FFEL Stafford Loans, your school will also provide the following information

during exit counseling:

– a current description of your loans, including average monthly anticipated payments;

– a description of applicable deferment, forbearance, and discharge provisions;

– repayment options;

– advice about debt management that will help you in making your payments; and

– notification that you must provide your expected permanent address, the name and address of

your expected employer, and any corrections to your school’s records concerning your name, Social Security Number, references, and driver’s license number (if you have one).

• You have the right to a grace period before your repayment period begins. (Your parents do not receive a grace period for a PLUS Loan.) Your grace period begins when you leave school or drop below half time* status.

• Your school, lender, and/or the Direct Loan Servicing Center, as appropriate, must give you a loan

repayment schedule that states when your first payment is due, the number and frequency of payments, and the amount of each payment.

• You must be given a summary of deferment and discharge (cancellation) provisions, including the

conditions under which the U.S. Department of Defense might repay your loan.

• If you or your parents borrow under the FFEL Program, you (or your parents, for a PLUS Loan) must

be notified when the loan is sold if the sale results in making payments to a new lender or agency.

Both the old and new lender or agency must provide this notification and provide the identity of the

new lender or agency holding the loan, the address to which the borrower must make payments, and

the telephone numbers of both the old and new lender or agency.

30

*See “Important Terms,”page 33.
31

*See “Important Terms,”page 33.

Loan

Deferment

Summary

NOTE: You must formally request a deferment through the procedures established by the holder of your loan, and you

must continue making payments until you’re notified that the deferment has been granted.

1For PLUS Loans and unsubsidized student loans, only principal is deferred. Interest continues to accrue.

2Direct Loan borrowers who have outstanding balances on FFEL Loans disbursed prior to July 1993, might be eligible

for additional deferments, provided the outstanding balance on the FFEL existed when the borrower received his or

her first Direct Loan.

3Applies to loans first disbursed on or after July 1, 1993, to borrowers who have no outstanding FFELs or Federal

Supplemental Loans for Students (Federal SLS Program) on the date they signed their promissory note. (Note that the

Federal SLS Program was repealed beginning with the 1994-1995 award year.)

4Many Peace Corps volunteers will qualify for a deferment based on economic hardship.

5

More information on teaching service deferments can be found on the Internet at www.studentaid.ed.gov. At the site,

Click on “Repaying,” then click on “Cancellation and Deferment Options for Teachers.”

Deferment Condition Direct 

Loans1,2 FFELs1,3 Perkins Loans

At least half time study at a postsecondary 

school

Study in an approved graduate fellowship program or in an approved rehabilitation training 

program for the disabled

Unable to find full-time employment

Economic hardship

Engages in service listed under discharge/ 

cancellation conditions (see pages 17 and 24)

 YES YES YES

 YES YES YES

 Up to Up to Up to 

 3 years 3 years 3 years

 Up to Up to Up to 

 3 years4 3 years4 3 years4

 NO NO YES5
32

Keeping Track of Your

Student Aid

YOU CAN FIND OUT ABOUT the student aid you’ve already received from the U.S. Department

of Education’s National Student Loan Data System (NSLDS) Financial Aid Review. NSLDS is

the U.S. Department of Education’s central database for student aid. It receives data from

schools, agencies that guarantee loans, the Direct Loan Program, the Pell Grant Program, and

other U.S. Department of Education programs. NSLDS provides an integrated view of federal

student aid, tracked from aid approval through closure. Keep in mind that if you apply for

federal student aid but haven’t yet received it, you won’t find your financial aid information

through NSLDS.

The NSLDS Web site is available 24 hours a day, seven days a week. (Note that maintenance

of the NSLDS database can occur on the weekends or during late hours. This might cause the site

to be unavailable for a brief period while the maintenance is performed.)

By using your PIN (see page 7), you can access NSLDS to make inquiries about your

loans and/or Pell Grants. The site displays information on loan and/or grant amounts,

outstanding balances, the status of your loans, and disbursements. The NSLDS Glossary of

Terms contains information on terms relating to loans and grants.

You may access your NSLDS information on the Internet at www.studentaid.ed.gov At the site,

click on “Repaying,” then click on “Get Your Loan Information.”

32
33

33

Important Terms

Academic Year A period of time schools use to measure a quantity of study. For example, a school’s academic

year may consist of a fall and spring semester during which a student must complete 24 semester

hours. Academic years vary from school to school and even from educational program to educational program at the same school.

Cost of Attendance (COA) The total amount it will cost a student to go to school—usually expressed as a yearly figure. It’s determined using rules established by law. The COA includes tuition and fees; on-campus room and board

(or a housing and food allowance for off-campus students); and allowances for books, supplies, transportation, loan fees, and, if applicable, dependent care; costs related to a disability; and miscellaneous

expenses, including an allowance for the rental or purchase of a personal computer. Also included are

reasonable costs for eligible study-abroad programs. For students attending less than half time,* the

COA includes only tuition and fees and an allowance for books, supplies, transportation, and dependent-care expenses. Talk to the financial aid administrator at the school you’re planning to attend if

you have any unusual expenses that might affect your cost of attendance.

Default Failure to repay a loan according to the terms agreed to when you signed a promissory note.* In

many cases, default can be avoided by submitting a request for a deferment, forbearance, or cancellation and by providing the required documentation before reaching the point of default. The

consequences of default are severe. Your school, the lender or agency that holds your loan, the

state, and the federal government may all take action to recover the money, including notifying

national credit bureaus of your default. This affects your credit rating for a long time. For example,

you might find it very difficult to borrow money from a bank to buy a car or a house. In addition,

the U.S. Department of Education might ask the Internal Revenue Service to withhold your U.S.

individual income tax refund and apply it to the amount you owe, or the agency holding your

loan might ask your employer to deduct payments from your paycheck. Also, you’re liable for expenses incurred in collecting the loan. If you decide to return to school, you’re not entitled to receive any more federal student aid. Legal action might also be taken against you.

Eligible Noncitizen You must be one of the following to receive federal student aid:

• U.S. citizen

• U.S. national (includes natives of American Samoa or Swain’s Island)

• U.S. permanent resident who has an I-151, I-551, or I-551C (Alien Registration Receipt Card)

If you’re not in one of these categories, you must have an Arrival-Departure Record (I-94)

from the U.S. Immigration and Naturalization Service (INS) showing one of the following

designations in order to be eligible:

• “Refugee”

• “Asylum Granted”

• “Indefinite Parole” and/or “Humanitarian Parole”

• “Cuban-Haitian Entrant, Status Pending”

• “Conditional Entrant” (valid only if issued before April 1, 1980)

If you have only a Notice of Approval to Apply for Permanent Residence (I-171 or I-464), you

aren’t eligible for federal student aid.

If you’re in the United States on an F1 or F2 student visa only, or on a J1 or J2 exchange visitor

visa only, you’re not eligible for federal student aid. Also, persons with G series visas (pertaining

to international organizations) are not eligible.

NOTE: Citizens and eligible noncitizens may receive loans from the FFEL program at participating

foreign schools.

Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau are eligible only for Federal Pell Grants, FSEOGs, or Federal Work-Study. These applicants should check with their schools’ financial aid offices for more information.
34

*See “Important Terms,”page 33.

34

Eligible Program: A course of study that leads to a degree or certificate and meets the U.S. Department of

Education’s requirements for an eligible program. To get federal financial aid, you must be enrolled in an eligible program, with two exceptions:

• If a school has told you that you must take certain coursework to qualify for admission into

one of its eligible programs, you can get a Direct Loan or a FFEL for up to 12 consecutive

months while you’re completing that coursework. You must be enrolled at least half time,*

and you must meet the usual student aid eligibility requirements.

• If you’re enrolled at least half time* in a program to obtain a professional credential or certification required by a state for employment as an elementary or secondary school teacher, you

can get a Federal Perkins Loan, Federal Work-Study, a Direct or FFEL Stafford Loan, or your parents can get a PLUS Loan, while you’re enrolled in that program.

Financial Aid Package The total amount of financial aid (federal and nonfederal) a student receives. The financial aid administrator at a postsecondary institution combines various forms of aid into a “package” to help meet a

student’s need. Using available resources to give each student the best possible package of aid is one of

the aid administrator’s major responsibilities. Because funds are often limited, a financial aid package

might fall short of the amount a student is eligible for. Also, the amount of federal student aid in a financial aid package is affected by other sources of aid received (scholarships, state aid, etc.)

General Education Develop- A certificate students receive if they’ve passed a specific, approved high school equivalency test.

ment (GED) Certificate Students who don’t have a high school diploma but who have a GED may still qualify for federal

student aid. A school that admits students without a high school diploma must make available to

those students a GED program in the vicinity of the school and must inform the students about the

program. An applicant without a high school diploma or its recognized equivalent also can be eligible for funds if he or she (1) passes an independently administered ability to benefit (ATB) test approved by the Department of Education and used for determining the student’s ability to benefit

from postsecondary education or (2) enrolls in a school that participates in a process that the state

in which the school is located has prescribed and the Department has approved.

Guaranty Agency The organization that administers the FFEL Program in your state. This agency is the best source

of information on FFELs. To find out the name, address, and telephone number of the agency

serving your state, you can contact the Federal Student Aid Information Center at the address or

phone number listed on page 12. A directory of guaranty agencies is available on the Department

of Education’s Web site at www.ed.gov/Programs/bastmp/SGA.htm

Half time At schools measuring progress in credit hours and semesters, trimesters, or quarters, “half time” is

at least six semester hours or quarter hours per term. At schools measuring progress by credit

hours but not using semesters, trimesters, or quarters, “half time” is at least 12 semester hours or

18 quarter hours per year. At schools measuring progress by clock hours, “half time” is at least 12

hours per week. Note that schools may choose to set higher minimums than these.

You must be attending school at least half time to be eligible for a Direct Loan or FFEL. Half time

enrollment is not a requirement to receive aid from the Federal Pell Grant, FSEOG, Federal WorkStudy, or Federal Perkins Loan programs.

Promissory Note The binding legal document you sign when you get a student loan. It lists the conditions under

which you’re borrowing and the terms under which you agree to pay back the loan. It will include information on how interest is calculated and what the deferment and cancellation provisions are. It’s very important to read and save this document because you’ll need to refer to it

later when you begin repaying your loan.

Regular Student One who is enrolled in an institution to obtain a degree or certificate. Generally, to receive aid from

the programs discussed in this booklet, you must be a regular student. (For some programs, there are

exceptions to this requirement. See the definition of eligible program.)

Satisfactory Academic Progress To be eligible to receive federal student aid, you must maintain satisfactory academic progress toward a degree or certificate. You must meet your school’s written standard of satisfactory progress.

Check with your school to find out about its standard.

Selective Service Registration If required by law, you must register, or arrange to register, with the Selective Service to receive federal student aid. The requirement to register applies to males who were born on or after January 1,

1960, are at least 18 years old, and are not currently on active duty in the U.S. Armed Forces.

(Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, or the

Republic of Palau are exempt from registering.)
State Higher 

These agencies provid

student aid assistance 

career opportunities, a

Education’s database a

addresses. At the site, 

You can also contac

State 

Alabama .....................

Alaska .........................

Arizona .......................

Arkansas .....................

California ...................

Colorado ....................

Connecticut................

Delaware ....................

District of Columbia .

Florida ........................

Georgia .......................

Hawaii ........................

Idaho ..........................

Illinois ........................

Indiana .......................

Iowa ...........................

Kansas .........................

Kentucky.....................

Louisiana ....................

Maine.........................

Maryland ....................

Massachusetts ............

Michigan ....................

Minnesota ..................

Mississippi .................

Missouri .....................

Montana .....................

Nebraska ....................

Nevada .......................

New Hampshire.........