Stafford Loan

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What is a Stafford loan?
Federal Stafford Loans are low-interest loans made to students attending school on at least a half-time basis. A student may be eligible for a Federal subsidized Stafford Loan and/or a Federal unsubsidized Stafford Loan. The "subsidized" loan is need-based and the government pays the interest on the loan while the student is in school or in deferment. The "unsubsidized" loan is non-need based and the student is responsible for the interest while in school and during deferment and grace periods.

What is the first step to the application procedure for a Stafford loan?
To be considered for this type of aid, a student must: complete the Free Application for Federal Student Aid (FAFSA). A student's eligibility for other Federal aid (i.e. Pell Grant) must be determined before a loan can be processed.

What is the interest rate of a Stafford loan?
Variable interest rates are set each June by the U.S. Department of Education. To check the current interest rates you may call FAME at 1-800-228-3734 or visit their website at: www.famemaine.com. You may also contact your Servicer or visit their website.

Other than interest, is there a charge to get a Stafford loan?
You'll pay a fee of up to 4 percent of the loan, deducted proportionately from each loan disbursement. (Part of the fee is for insurance used to pay off loan defaults; the rest reduces the cost of the loan to the government.) Because of this deduction, you may receive slightly less than the amount you're borrowing.

How will I be notified of my eligibility?
A student is usually notified of his/her Stafford loan eligibility through the institution's award letter. Initial award letters are mailed to the student; updated award letters are available on Bengal Tracker (DSIS).

Note: To log onto Bengal Tracker (DSIS) your 9 digit identification number is your social security number and your 6 digit pin number is your birth date. If your birthday is on March 1, 1974, your pin number will be entered as 030174 (MMDDYY).

How much can I borrow?
The student's borrowing limit will be determined by the school within the federal limits. Stafford Loan borrowing limits vary depending if the student is a dependent or independent undergraduate and the student's class level. Also, a student cannot borrow more than the cost of education. Lifetime aggregates also apply.

How do I request Stafford loan funds and what are the application requirements?
In order to receive a loan, there are 4 (four) things you need to do, each of which is explained in detail below:

  1. If this is your first time borrowing a Stafford loan at UMFK, complete Entrance Counseling to learn about the loan.
  2. Tell us you want the loan and how much you want to borrow by completing a Stafford loan application.
  3. Choose a lender. If this is not your first Stafford at UMFK, you might choose to stay with the same lender you used before.
  4. If this is your first Stafford Loan from this lender, complete the Master Promissory Note (MPN.)
All requirements must be completed before this office can proceed with your loan application.

Application Requirements

Step 1: Complete the Entrance Counseling Session
Your loan application cannot be processed until your Entrance Counseling session is completed.

If this is NOT your first-time borrowing a Stafford Loan at UMFK, you can skip this step.

Note: If you are a continuing student and if you are not sure if you have completed a Stafford Entrance Counseling session, you may login to your Financial Aid record in Bengal Tracker (DSIS), look under "Document Status" (top toolbar). If you see a "Stafford Loan Entrance Interview" entry with a file Status marked as "Received" and a "Date" received entry, then you have completed this process. If you do not see this information, you will need to complete one.

If this IS your first Stafford Loan at UMFK, complete the Entrance Counseling to learn about your rights and responsibilities in regard to the money you are borrowing.

For Direct Lending Entrance Counseling session go to: https://www.dlssonline.com.

For all others (lenders) go to: http://mappingyourfuture.org.

We will be notified by email when you have done so.

Step 2: Accept your Stafford Loan
You will need to affirm to the financial aid office that you want the Stafford loan that we "offered" to you.

You may accept and apply for your Stafford loan by placing a check mark in front of the Stafford loan award listed on the front-side of the award letter, complete the back side of the award letter (including the loan section), and return the paper copy to the financial aid office.

OR, you may "accept" and "apply" for your Stafford loan on-line by going to the campus website www.umfk.maine.edu.

Log into the Bengal Tracker (DSIS), select "financial aid", select "award information" read the statement if provided, and continue to the next level. Here you will be able to view your financial aid award letter. Accept or decline the aid offered to you. You must accept your loan before continuing to the next step. Lastly click on the "Stafford/Direct Loan Application" link provided. Complete the information requested and submit as directed. The financial aid office will receive your loan request electronically.

DSIS Note: When logging into DSIS student will be asked for an ID. This will be the student’s social security number. It will also ask for a PIN number. This will be the student’s date of birth. A birth date of February 14, 1990 would be entered as 021499, month, day year, (MMDDYY).

Note: You must indicate the loan amount that you want to borrow. To find the total amount that you are eligible to borrow, simply add the Stafford loan amounts listed in the columns of your award letter. You may add the fall and spring column amounts together for your total academic year loan eligibility. When applying for a loan, you apply for the two semesters at once, unless you are only planning to attend one semester. You may accept a smaller Stafford loan amount than the maximum eligibility amount we have offered to you on your award letter. Do not borrow more money than you need.

Step 3: Choose a Lender and Tell Us Who
If this is NOT your first Stafford Loan at UMFK and you want to stay with the same lender, you may indicate this on the backside of the paper award letter and return it to us. Or, you may log onto DSIS, chose your lender while you complete your Stafford/Direct loan application. (Details of the on-line loan application process are available in Step 2.).

If this IS your first Stafford Loan at UMFK, you need to choose a lender and tell us who it is, using the paper letter or DSIS. We do not recommend lenders. There are many lenders. The basic interest rate and repayment terms of the loan are the same, but some lenders do offer incentives to borrowers. These incentives come in two ways: Front End and Back End benefits.

Front End benefits usually consist of reduced or no loan fees. The Higher Education Act of 1965 requires that lenders withhold up to 4% of the loan proceeds as insurance and processing fees. In some cases, lenders have chosen to pay these fees on behalf of the borrower, so you, the borrower, may pay less fees and receive a little more actual cash. For instance, if you borrow $1000 and there is a 3% fee withheld, you will only receive $970, but your loan will be $1000 to repay with interest.

Back End benefits generally consist of either lowered interest rates or reductions to the principal, usually based on good repayment behavior by the borrower. For instance, the lender may reduce the interest rate on the loan by a quarter of a percent if the borrower agrees to repay the loan by direct debit rather than sending in payments.

As mentioned, there are many lenders which we will place in two different groups:

  1. Financial institutions (i.e., banks, credit unions) To help you to make a lender selection, you can access many lenders links here and the benefits they provide:
    http://www.famemaine.com.

  2. Direct Lending where the U.S. Government is the lender. More information regarding Direct Lending is available at: http://www.ed.gov.

This is only a sampling of all the lenders available across the country. You may use any lender you choose. Just let us know who.

Step 4: Complete the Master Promissory Note (MPN)
If this is NOT your first Stafford Loan with this lender, you do not have to complete this step.

If this IS your first Stafford Loan with this lender, you will need to complete a MPN by logging onto one of these sites, based on the lender you have chosen:

Note: The lender you have selected for your Stafford loan application that you completed either on your award letter or on DSIS should be the same lender you will write in on your MPN. The quickest way to process your loan is to complete your MPN on the appropriate link below.

  1. Direct Loans: https://dlenote.ed.gov.
  2. Nelnet: http://www.nelnet.com; click on E-sign Promissory Note
  3. All other lenders go to: http://www.salliemae.com; click on E-sign Your Loan. If you do not see your lender listed, choose the "Other" category.

If you select to not complete your MPN online, once the school certifies your loan, an MPN will be mailed to you from your lender/servicer with instructions. Complete the MPN and immediately forward it to the address indicated. An MPN must be completed and returned to the lender before the lender will disburse any loan funds to the school/student.

When you sign a promissory note and receive loan funds, you are agreeing to repay the loan according to the terms of the note. Except in cases where the loan is discharged (for instance in the death of the student) the loan must be repaid with interest, even if the student does not complete the program, does not like the program, or is unable to procure employment after completing the program.

How and when do I get my Stafford loan money?
Loan funds are not disbursed until the semester begins.

Stafford Loan funds are usually credited to a student's University account in two equal disbursements, half of the total amount each semester. Funds are credited to the student's account only when: the student's financial aid file is complete, the Stafford Loan Entrance Counseling session is complete, the Master Promissory Note is complete, the Stafford loan funds are received from the lender, the student is registered and the semester has begun.

Once the loan is applied to a student's account, the student will receive a refund for any semester amount which exceeds indebtedness to the University. Note: About Availability of Refund Checks: Refund checks will be issued according to the Business Office check writing schedule. This process takes 4-7 additional days from the time your money is applied to your student account to the time your refund check becomes available. The schedule varies depending on the actual day funds are received on your account at the Business Office. For more information contact the Business Office.

How will I know if my loan funds have been applied to my student account/bill?
To check if your Stafford Loan funds have been received and applied to your UMFK student billing account, go to: www.umfk.maine.edu, click on Current Students, then click on Maine Street, then click on Log in with your UMS login and Password, then click on Student Self Service, from there you can go right into the Student Center or into the User Guide Demo.

If "Subsidized Loan" and/or "Unsubsidized Loan" is listed as a "Payment" the amount shown has been received and deducted from your bill. Review the amounts for accuracy. If your UMFK bill is paid in full and any balance remains, that balance will be refunded to you. Contact the UMFK Business Office at 207-834-7552.

What you need to know about paying back your Stafford loan?
Stafford Loans require repayment. After a student graduates, leaves school or drops below half-time, a student has a six month grace period before beginning repayment. If a student has a subsidized Stafford Loan, neither the interest nor the principal needs to be paid during the grace period. If a student has an unsubsidized Stafford Loan, the student will be responsible for the interest from the time the loan is disbursed until the loan is paid in full. More information about deferments and/or forbearance etc. is available at:

What are my borrower responsibilities after I leave school?
A student who has borrowed from either the Stafford and/or Perkins loan program(s) during his/her undergraduate career who has either withdrawn from school, left school, dropped to less than 6 credits hours or graduated, is required to complete an Exit Counseling session. Students who have not met this requirement will have had a "Hold" (negative service indicator) placed on his/her UMFK account. Students are also required to notify their lender if their address changes.

A "Hold" on a student's account will prevent a student's official academic transcript and diploma from being released. To remove a "Hold", you will need to resolve the hold with the office/department that has placed the hold on your account.

To release a Stafford/Perkins "Hold" you will need to complete the appropriate (i.e., Staford/Perkins) Exit Counseling session. To do so, simply go to the UMFK campus website www.umfk.maine.edu - search under financial aid, and under loans. Select Exit type (i.e., Staford/Perkins) and follow instructions carefully making sure to complete all sections completely.

If you prefer to complete a paper Stafford Exit process, contact the financial aid office at 207-834-7605, or email the office at: umfkaid@maine.edu to request a packet. Make sure to provide us with: your name, social security number, address and telephone number when doing so. Note: The (snail) mail process will require a longer period of time to process. The best method to expedite the process is the online method.

What lender(s) did I borrow from and how can I contact them?
LoanLocator is the National Student Loan Clearinghouse's newest web site service, designed specifically to help students track their education loans. Available through www.nslc.org, LoanLocator delivers to students an up-to-date list of loan providers and means for contacting them via telephone or Internet.

Lender/Servicer Contact Information
Note: You should know the name of your servicer before making contact with them. If you are unsure about who your lender/servicer or guarantor is, how much you borrowed, when you borrowed, etc., you may contact the Finance Authority of Maine (FAME). FAME can be reached at 1-800-228-3734 (in-state) or (207) 623-3263; Fax: (207) 623-0095; E-mail: info@famemaine.com; web site;www.famemaine.com.

Servicer Telephone Number Internet Address
Sallie Mae 1-888-272-5543 Salliemae.com
FISC 1-800-370-3472 or 207-783-2928 LoanServ@FISCorp.com
Nelnet 1-888-486-4722 Nelnet.net

Where can I find more information regarding Stafford loan Repayment, Consolidation and Deferments?
A good place to begin looking for answers to your questions is with your lender/servicer. The majority of UMFK's Stafford loans are process through either Sallie Mae or Nelnet. Call your lender or go to YOUR lender/servicer's website and search for information by entering key words.

OSFA Ombudsman Information
The SFA Ombudsman is working with student loan borrowers to informally resolve loan disputes and problems. They help borrowers having problems with the following federal loans:

  • Direct Loans - Subsidized and Unsubsidized Direct Student Loans, Direct PLUS Loans (for parents), and Direct Consolidation Loans
  • Federal Family Education Loans - Subsidized and Unsubsidized Stafford Loans, FFEL, PLUS Loans (for parents), and FFEL Consolidation Loans
  • Guaranteed Student Loans, SLS Loans
  • Perkins Loans

Ombudsman Contact Information

Website: http://ombudsman.ed.gov/

Mail:
U.S. Department of Education
FSA Ombudsman
830 First Street, NE
Fourth Floor
Washington, DC 20202-5144

Customer Service Line (Toll Free): 1-877-557-2575
Fax Number: (202) 275-2549

Where can I find more information?