Loans
Although it is sometimes necessary to borrow money to finance an education, caution is advised. Generally, a student should not rely primarily on loans and is advised not to borrow more than what is needed to meet expenses.
LOAN TYPES
Federal Direct Subsidized Stafford
Federal Direct Unsubsidized Stafford
Federal Direct Grad PLUS
Know your Loan FAQs
Understand your Loan Limits
News
FEDERAL LOAN INFORMATION
You must be enrolled half-time to receive a loan.
If you withdraw from all your classes during a term, you may owe part or all of your funds back to the federal programs.
You must report outside assistance that pays your tuition Outside Resource Form or your aid may be reduced.
You understand that, by accepting the financial aid award, you give UAHuntsville permission to use these funds to pay any and all direct institutional charges incurred incidental to your enrollment.
Repayment begins six months after graduation or when the student drops below half-time attendance.
The interest on the subsidized loans is paid by the federal government while the student is in school.
The interest on the unsubsidized loans will start accruing immediately as the loan is disbursed.
The amount a student may borrow is limited to financial eligibility. Also, Stafford loans will be subject to a 3% origination fee.
Interest rates are variable up to 8.25% maximum.
Total indebtedness cannot exceed $31,000 for a dependent undergraduate, $57,500 for an independent, or $138,500 as a graduate or professional student
Satisfactory Academic Progress - Students must maintain satisfactory academic progress to receive federal aid.
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Annual Maximum Loan Limits |
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Dependent Student |
Independent Student |
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Freshman: 0 - 32 credit hours |
$5,500 (no more than $3500 subsidized) |
$9,500 (no more than $3500 subsidized) |
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Sophomore: 33 - 63 credit hours |
$6,500 (no more than $4500 subsidized) |
$10,500 (no more than $4500 subsidized) |
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Junior/Senior: 64+ credit hours |
$7,500 (no more than $5500 subsidized) |
$12,500 (no more than $5500 subsidized) |
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Graduate Professional |
N/A |
$20,500 (no more than $8500 subsidized) |
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Aggregate Maximum Loan Limits |
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Amount |
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Dependent Student |
$31,000 (no more than $23,000 subsidized) |
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Independent Student |
$57,500 (no more than $23,000 subsidized) |
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Graduate Professional |
$138,500 (no more than $65,500 subsidized) |
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Veterinary Medicine |
$189,125 (no more than $65,500 subsidized) |
Higher Maximum Loan for Independent Students
The higher maximum loan for independent students reflects a combination of Federal Direct Subsidized and Unsubsidized Stafford Loans. The annual maximum Subsidized Loan Stafford eligibility is limited to the dependent eligibility for each class level.
FEDERAL DIRECT SUBSIDIZED STAFFORD
A Federal Direct Subsidized Stafford Loan is awarded on the basis of the student's financial need and other specific federal requirements. The federal government does not charge interest on these loans while borrowers are enrolled at least half-time, during a six-month grace period, or during authorized periods of deferment the federal government does not charge interest on these loans while borrowers are enrolled at least half-time, during a six-month grace period, or during authorized periods of deferment.
It is the U.S. Department of Education's major form of self-help aid and is available through the William D. Ford Federal Direct Loan Program. For undergraduate students, Federal Direct Subsidized loans offered from July 1, 2011 until June 30, 2012 have a fixed interest rate of 3.4% and from July 1, 2012 – June 30, 2013 have a fixed interest rate of 6.8% For graduate/professional students, Federal Direct Subsidized loans have a fixed interest rate of 6.8%. The federal government pays interest on the loan until you begin repayment.
• Graduate students are no longer eligible for Federal Subsidized loans (beginning July 1, 2012).
Apply for a Federal Direct Subsidized Loan
To apply for a Federal Direct Subsidized Loan, you must complete the FAFSA. To be eligible, you must be enrolled for at least six hours per semester. If you are eligible for a Federal Direct Subsidized Loan, it will be included on your Financial Aid Award.
Accept/Reduce/Decline a Federal Direct Subsidized Loan
You can accept or decline a Federal Direct Subsidized Loan on your Banner Self Service Account. Follow these steps:
• View your financial aid offer online.
• Enter Banner Self Service.
• Enter Secure Area with your UAH user ID and password.
• By selecting "Accept" or "Decline" provided box on the Award Letter Accept/Decline Awards page. You can reduce your loan by selecting "Accept" in the dropdown box and entering a lower award amount in the "Partial Accept" field. If you wish to request loan changes, or request loans for one term only, you should use the printable form "Loan/ Change/Request form"
• A Master Promissory Note (MPN) and Entrance Counseling are required for Federal Direct Loans before the loan funds will be disbursed. In most cases, you will only be required to complete one MPN and complete one entrance counseling session during your college career.
FEDERAL DIRECT UNSUBSIDIZED STAFFORD
A Federal Direct Unsubsidized Stafford Loan is not based on the student's financial need, but students must also meet specific federal requirements. Interest is charged throughout the life of the loan. The borrower may choose to pay the interest charged on the loan or allow the interest to be capitalized (added to the loan principal).
It is available to you through the William D. Ford Federal Direct Loan Program, if your Estimated Cost of Attendance (COA) is greater than your financial aid and you have not reached your annual maximum loan limit through the Federal Direct Subsidized Loan. The interest rate for Federal Direct Unsubsidized loans disbursed on or after July 1, 2006 is fixed at 6.8%. You are charged interest on this loan from the time the loan is disbursed until it is paid in full. If the interest is allowed to accumulate, the interest will be added to the principal amount of the loan and increase the amount to be repaid.
Apply for a Federal Direct Unsubsidized Loan
To apply for a Federal Direct Subsidized Loan, you must complete the FAFSA. To be eligible, you must be enrolled for at least six hours per semester. If you are eligible for a Federal Direct Unsubsidized Loan, it will be included on your Financial Aid Award Letter.
Accept/Reduce/Decline a Federal Direct Unsubsidized Loan
You can accept or decline a Federal Direct Subsidized Loan on your Banner Self Service Account.
• View your financial aid offer online.
• Enter Banner Self Service.
• Enter Secure Area with your UAH user ID and password.
• By selecting "Accept" or "Decline" provided box on the Award Letter Accept/Decline Awards page. You can reduce your loan by selecting "Accept" in the dropdown box and entering a lower award amount in the "Partial Accept" field. If you wish to request loan changes, or request loans for one term only, you should use the printable form "Loan/ Change/Request form"
• A Master Promissory Note (MPN) and Entrance Counseling are required for Federal Direct Loans before the loan funds will be disbursed. In most cases, you will only be required to complete one MPN and complete one entrance counseling session during your college career.
FEDERAL DIRECT PARENT PLUS
Parent Loans for Undergraduate Students (Federal Direct Parent PLUS) are federal loans that parents with good credit histories may borrow to help pay the educational expenses of an undergraduate student enrolled in at least 6 credit hours per semester.
A parent may borrow up to the total of the estimated cost of attendance less resources and all other financial aid received by the student. The interest rate is a fixed interest rate of 7.9% and is charged on the loan from the time the loan funds are disbursed until it is paid in full.
Apply - Complete a Federal Direct Parent PLUS Loan Request Form
Complete the 2012-13 Federal Direct Parent PLUS Loan Application for Fall 2012, Spring 2013 and Summer 2013
Complete the Master Promissory Note for Parent Loan
Parent Eligibility
The PLUS Loan application allows a credit check by the United States Department of Education to be eligible for a Federal Direct Parent PLUS Loan. You authorize the credit check when you sign the PLUS loan application.
Federal Direct Parent PLUS Loan Processing / Receipt of Funds
The Direct Loan Processor will notify the parent borrower of the result of the credit check. The borrower cannot be 90 days or more delinquent on the repayment of any debt or the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment or write-off of a Title IV debt during the last five years. If credit is approved, loan funds will be posted to the student's university account. The funds will be applied to tuition, fees, and other university charges.
Refunds
If the Federal Direct Parent PLUS disbursement generates a refund after university charges are paid, the refunded amount will go to the parent unless the parent borrower checks the appropriate box on the PLUS Loan application form authorizing that the refund be sent to the student.
Denied
If a Federal Direct Parent PLUS Loan Application is denied, it may be possible for a student to borrow an additional amount of unsubsidized loan by signing the top portion of the PLUS Loan application or completing a loan/change request form. The dependent student annual maximum allowable loan limit will be replaced by the independent student maximum allowable loan limit at the same class level. If the application is denied, the student should contact the Student Financial Services Office for more information.
Repayment of Federal PLUS Loans
Repayment begins within 60 days of the final loan disbursement during the academic year. Principal and interest payments may be deferred if the borrower meets deferment requirements. In-school deferments are available for borrowers enrolled at least half-time in a degree seeking program and are not automatic.
FEDERAL DIRECT GRAD PLUS
Grad PLUS Loans are federal loans that graduate students with good credit histories may borrow to help pay educational expenses. Recipients must be enrolled in at least 6 credit hours per semester.
With a Grad PLUS Loan, graduate students may borrow up to the full cost of attendance less other financial aid. The interest rate is fixed at 7.9%. There is a 4.0% loan origination fee deducted from the loan by the U.S. Department of Education. This loan fee includes an up-front 1.5% rebate, which is retained by making your first 12 monthly payments on time. The Grad PLUS Loan is credit-based and requires credit approval.
Apply - Complete a Federal Grad Plus Loan Request Form
Complete the 2012-2013 Federal Direct Grad Plus Loan Application for Fall 2012, Spring 2013, and Summer 2013.
Complete the Master Promissory Note and entrance counseling for Grad Plus Loan.
Student Eligibility
The Grad Plus Loan application initiates a credit check by the United States Department of Education to be eligible for a Federal Direct Grad PLUS Loan. You authorize the credit check when you sign the Grad Plus loan application.
Federal Direct Grad Plus Loan Processing
The Direct Loan Processor will notify the student borrower of the results of the credit check. The borrower cannot have been 90 days or more delinquent on the repayment of any debt or the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment or write-off of a Title IV debt during the last five years. If credit is approved, loan funds will be posted to the students school award.
Receipt of Funds
The funds will be applied to tuition, fees, and other university charges. If the Federal Direct Grad Plus disbursement generates a refund after University charges are paid, the amount will be applied to the students account and refund via Direct Deposit though the Bursar’s Office.
Denied
Credit approval is valid for 90 days. Your credit is evaluated every time you request a new loan, unless you have had a credit decision within the preceding 90 days.
If you think you may have one or more of the items outlined in the credit requirements listed above, you may want to obtain your credit report in advance of applying for a Grad PLUS Loan. You should work to correct negative items on your credit report as soon as possible.
Credit denial options include:
Apply for the loan with an endorser, which is a credit-worthy loan cosigner
Correct any invalid information on your credit report and reapply
If a Federal Direct Grad PLUS Loan Application is denied, you will need to contact Direct Loans to add a cosigner: 1-800-848-0979.
Repayment of Federal Grad PLUS Loans
Payments can be deferred until after graduation while the student is enrolled at least half time. Accrued interest can be paid quarterly while in school or capitalized (added to) the loan when you enter repayment if you prefer. You will accrue future interest based on the higher principle balance while in repayment.
LOAN FAQ'S
Loans require half-time enrollment.
The lender of your student loans or Parent PLUS Loan is the Department of Education or Direct Loans.
Direct Loans has multiple servicers; the servicers are contracted by the Department of Education to manage the Direct Loan. They are responsible for the billing, collection and processing for all deferments, forbearance's and cancellations.
UAHuntsville processes and disburses loan funds to your account. You can accept, reduce, cancel or adjust your loans on your Banner Account or by completing a Loan Change Request form in our office, UC 212.
You may locate your servicer at www.nslds.ed.gov.
You must complete a FAFSA each year you need aid.
The student has a one-time 6 month grace period and repayment begins 6 months after graduation or 6 months after the student ceases half-time enrollment.
Interest in a Subsidized Loan is paid by the government while the student is in school.
Unsubsidized Loans accrue interest once it disburses and is the responsibility of the student.
Dependent Students have a maximum loan limit of $31,000 while obtaining their undergraduate degree.
Independent Students have a maximum loan limit of $57,500 while obtaining their undergraduate degree.
A Master Promissory Note (MPN) is a promise to repay the loan and must be completed before disbursement will occur.
Entrance Counseling is a tutorial and quiz that will explain your rights and responsibilities as a Direct Loan borrower and is required before a loan will disburse.
The MPN and Entrance Counseling is good for 10 years.
Exit Counseling is required and will explain your rights and responsibilities as a Direct Loan borrower. Direct Loan Exit Counseling is required when you drop below half-time student status or cease to be a student at UAHuntsville.
By accepting your financial awards, you are agreeing to give UAHuntsville permissions to use the funds to pay any and all direct institutional charges incurred incidental to your enrollment.
Outside assistance that pays tuition must be reported on the Outside Resource Form or your aid maybe reduced or cancelled.
Parent PLUS Loan FAQ's
Parent PLUS Loan's require 2 steps:
1.) Submitting the Parent PLUS Loan Application to our office, UC 212 or Fax to (256)824-6212.
2.) Completing a Master Promissory Note (MPN) if the Parent Loan is approved.
A declined Parent PLUS Loan changes the student's loan limit from the dependent loan limit of $31,000 to the independent loan limit of $57,500.
Grad PLUS Loan FAQ's
The Grad PLUS Loan requires 3 steps, completing the Grad PLUS application, a separate Masters Promissory Note (MPN) in addition to a subsidized/unsubsidized MPN, and separate Entrance Counseling.
The student must be credit-worthy for a Grad PLUS Loan.
WHAT IF?
What if I have to withdraw from all my classes in the midst of a term? Will I have to repay any or all of my aid?
The student would be required to repay a portion of any federal aid they receive during the term. A percentage of the completed semester is calculated and the percentage of aid earned is determined; please see the section on policy for more information.
What if I only have to withdraw (drop) one class?
You would not owe funds back immediately; however, it could affect your Satisfactory Progress and potentially your eligibility for future aid; see the section on Satisfactory Progress.
*EFFECTIVE JULY 1, 2012...
Graduate and professional students are no longer eligible to receive Federal Direct Subsidized Loans. The terms and conditions of Direct Subsidized Loans received by any student for loan periods beginning before July 1, 2012, for either graduate or undergraduate study, are not affected by this change.
The aggregate loan limit for graduate and professional students remains unchanged at $138,500, not more than $65,000 of which may be in subsidized loans. All Federal Direct loans originated after July 1, 2012 will have an increased Origination Fee with one exception as noted+ below, the Budget Control Act of 2011 (BCA) terminates the authority of the Department of Education (the Department) to offer any repayment incentives to Direct Loan borrowers to encourage on-time repayment of loans, including any reduction in the interest rate or origination fee, effective for loans first disbursed on or after July 1, 2012.As a result of this change, the up-front interest rebate that has been provided to Direct Loan borrowers at the time of their loan disbursement will no longer be offered on any Direct Loan Program with a first disbursement date that is on or after July 1, 2012.
NOTE: Undergraduate borrowers will begin accruing interest on new loans during the six-month grace period. The consolidated Appropriations Act of 2012 initiated Federal Direct Subsidized loan interest to begin accruing during the six-month grace period for all loans originated from July 1, 2012 through June 30, 2014.The interest rate for Federal Direct Subsidized loans will change from 3.4 percent(%) to 6.8 percent(%) beginning July 1, 2012. Unsubsidized Stafford loans will remain at a fixed 6.8 percent(%) rate.
+The law continues to authorize the Department to offer interest rate reductions to Direct Loan borrowers who agree to have payments automatically electronically debited from bank account.
WE'RE HERE TO HELP!
If you have questions about loans email or call 256.824.6241.
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