Frequently Asked Questions
What is the difference between a Subsidized and an Unsubsidized Federal Stafford Loan?
For the Subsidized Stafford Loan, the federal government pays the interest for the student while he is in school at least half time, and during the 6 month grace period before repayment begins. For the Unsubsidized Stafford Loan, the student is responsible for the interest while in school. The interest can be paid on a quarterly basis while the student is in school, or can be capitalized (that is rolled into the principle) and payment deferred.
What is a Master Promissory Note?
The Master Promissory Note (MPN) is a Serial Note for the Federal Stafford Loan or Federal PLUS, valid for up to 10 years. Once a student has signed an original Master Promissory Note with Direct Loan, a new MPN will not be required for subsequent years unless there is a change in the lender. There is also a Master Promissory Note for the Federal Perkins Loan, held by Union University.
What are the interest rates on Educational Loans?
2014-15 interest rates on Direct Stafford loans (subsidized and unsubsidized) are 4.66%. An origination fee of 1.073% will be deducted by the Department of Education prior to disbursement of the Stafford Loan. 2015-16 rates will be set by federal government in June 2015.
2014-15 Federal Grad PLUS Loan rate is 7.21% with an origination fee of 4.292%. Rates for 2015-16 will be set by the federal government in June 2015. Rates on Alternative Loans are based on creditworthiness and vary with each lender.
How will I be notified I have an approved loan?
Students will be notified in an Award Letter of the amount(s) each academic year. If the student wants to decline or lower the amount, they should indicate such changes on the Award Letter, sign it, and return it to the Office of Student Financial Planning.
When will the loan funds be credited to my student account?
The Office of Student Financial Planning will notify the student by email when the funds are credited to your Student Account. Federal regulations require that funds be credited to the student within 3 days after funds are received. Note that first-time borrowers must complete Entrance Counseling before funds will be awarded and credited to their student account.
What is Entrance Counseling?
In order to ensure that every federal loan borrower understands completely the loan program, the federal government requires first time borrowers at Union to complete entrance counseling before funds can be credited to the student’s account. After completion of online entrance counseling, the Office of Student Financial Planning will be notified by email, and your funds will be disbursed. This applies to Federal Stafford, Perkins, & Grad PLUS loans.
If I have an overage (credit balance) on my account when the loan funds come in, how and when can I get that money?
Students who have a credit balance on their student account as a result of loan funds will receive a direct deposit to the bank account the student set up via Web Advisor. Funds are normally available 14 days after the credit balance occurs. See our Schedule of Loan Refund Dates.
When does the Federal Stafford Loan have to be paid back?
Repayment of a Federal Stafford Loan begins 6 months after the student obtains his degree or ceases to be at least a ½ -time student.
Can my loans be forgiven or canceled?
General Loan Forgiveness Information
Federal Stafford Loan Teacher Forgiveness Program
Federal Perkins Loan Teacher Cancellation
American Federation of Teachers