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Stafford Loans
The Federal Stafford Loan can be funded by a bank, credit union or other eligible lender. Loan funds are disbursed directly to the school on the borrower's behalf.
Loan Limits
According to federal regulations, borrowers are limited to certain amount of loan funds each year based on their dependency status and year in school.
- Dependent students (as defined on the FAFSA) are allowed to borrow up to $5,500 their freshman year, $6,500 their sophomore year.
- Dependent students may borrow an additional $4,000 the first two years if their parents are denied a PLUS Loan.
- Dependent undergraduates may not exceed a combined total of $31,000 in Stafford loan funds.
- Independent students are allowed to borrow up to $9,500 their freshman year, $10,500 their sophomore year.
- Independent students (or students whose parents were denied a PLUS Loan) may not exceed a combined total of $57,500 for undergraduate students or $138,500 for graduate students.
Interest Rates & Payments
Based on financial need as demonstrated on the Free Application for Federal Student Aid (FAFSA),
a borrower may receive subsidized or unsubsidized Stafford loan funds.
- Subsidized Stafford loan - loan funds where the government pays the interest for the borrower while the borrower is in school or in an eligible deferment.
- Unsubsidized Stafford loan - loan funds where the borrower is completely responsible for all interest that accrues on the loan.
How to Apply for a Loan
- Complete the application process on the Applying for Financial Aid
page to get started.
- Carefully consider the Borrower's Rights and Responsibilities.
- Complete and submit to the Financial Aid Office a Stafford Loan Request Form, and review the Stafford loan lender list which is available on the Financial Aid Forms page.
- Register for a minimum of 6 credit hours. (Loan requests are not processed until the student is enrolled in a minimum of 6 credit hours of a financial aid eligible program.)
- The Financial Aid Office then certifies your loan eligibility and forwards that information to the Michigan Guaranty Agency (MGA) and your Lender for further processing.
If you have not previously signed a Master Promissory Note with WCC, you will be notified to complete and
Electronically Sign (E-Sign) Your Master Promissory Note (MPN)
(using your Lender's E-Sign Process).
Federal regulations require first time student borrowers to complete entrance counseling before receiving a Stafford loan. The process of E-Signing your MPN includes
entrance counseling, which provides useful tips and tools to help you develop a budget for managing your educational expenses and helps you to understand your loan
responsibilities.
Federal regulations require that loan amounts be prorated if a student is not attending a full academic year. A loan proration is determined by the graduation date indicated on the loan request form and the program of study the student is completing.
Disbursement of Loan Funds
The scheduled disbursement date of your loan is the date that WCC is scheduled to receive your loan funds.
- If this is your first semester in any college - your funds are not disbursed until thirty days after the start of the semester.
- One semester loans - if you are taking out a loan for only one semester your funds will be disbursed twice during the semester.
- All loans must be disbursed in two equal amounts.
- Lenders will send your loan funds by electronic funds transfer (EFT). Funds will automatically be applied to your WCC account balance. Any funds remaining after tuition, fees, and authorized charges have been paid will be refunded by mail to you in a check from the Cashier's Office or by direct deposit, if authorized.
- If you decide to cancel all or a part of your loan, contact the Financial Aid Office.
Exit Counseling
For information on Stafford Loan Exit Counseling, visit the
Exit Counseling page.
Repayment Options
When you applied for a student loan, you signed a legal and binding note to repay your lender.
As you leave school, it is important that you fulfill this obligation. Consider the following options.
- Standard Repayment: Typically this is the least-expensive option in terms of total interest costs. Most federal education-loan borrowers choose this option. This option provides a fixed monthly payment of at least $50 over a period of up to 10 years. A lender may permit a borrower to make smaller payments than otherwise required if the reduced scheduled monthly payment equals at least the amount of interest due on the loan.
- Graduated Repayment: This plan starts off with low payments, which then gradually increase every two years. The loan term varies depending on the total loan amount. Unless you consolidate several federal education loans, the maximum repayment term under this option is 10 years. No single payment will be more than three times greater than any other payment.
- Income-Sensitive Repayment: Monthly payments in this plan begin low and increase as the borrower's income increases. Repayment terms can be adjusted annually to adapt to income changes. While this benefits the borrower with smaller initial payments, borrowers should be aware that by reducing early payments, the long-term interest costs will increase.
- Extended Repayment: This plan is for borrowers with accumulated loan balances of $30,000 or more received on or after Oct. 7, 1998. Under this plan, you may reduce the amount of your monthly payment by spreading payments over a period of up to 25 years. You may choose to make payments over this extended period under a level or graduated schedule. Because payments are stretched over a longer term, total interest costs will be significantly higher than under the other repayment plans. Although a borrower's monthly payment will be lower, the total amount of money paid back over the life of the loan will be more than standard repayment.
If you experience trouble repaying your loans, read the section on
Defaulting on Student Loans,
which describes the consequences of defaulting and suggests other options.
You may also wish to consider Consolidation Loans.
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