Mortgages & Loans

No. Unlike the previous Stafford Loan Application Promissory Note, the Master Promissory Note is simply the promissory note. Rather than completing a separate application, you begin the loan process each year by answering "yes" to the question on the Free Application for Federal Student Aid (FAFSA) that asks if you are interested in student loans. The financial aid office will advise you of any additional steps they require in the application process such as completing a loan request or loan information form.

The Master Promissory Note has replaced the Stafford Loan Application Promissory Note. It is a legally binding document that sets the terms of your student loans. By signing the Master Promissory Note It becomes a legally binding document that sets the terms of your student loans. By signing the Master Promissory Note you are promising to repay your student loan. This is regardless of whether you graduate or are satisfied with your education. You are promising to repay your student loan regardless of whether you graduate or are satisfied with the education you received.

The Federal Perkins loan are low interest federal funded loans for undergraduate and graduate students.
The loans are available on a limited basis to students with very high financial need. 9 months after graduation or leaving school the interest and principal repayment commences.
The repayment term is up to ten years with a $40 minimum payment due.

Federal PLUS loans are low interest rate loans for parents or guardians of dependent undergraduate students. Loans are based on creditworthiness. Parents may borrow up to the cost of attending school minus any financial aid received. Repayment of the loan begins within 60 days of receipt of full disbursement of the loan with a repayment term of up to 10 years. A 3% origination fee may apply.

Federal Subsidized Stafford Loans are low interest loans for students who demonstrate financial need. While in school the interest is paid by the government. Repayment of interest and principal is deffered until 6 months after graduation or when the student leaves school. The repayment term is up to 10 years. As of the year 2000 undergraduates may borrow up to $3,500 for the 1st year, $4,500 the second year and up to $5,500 for each undergraduate year thereafter. Graduate and professional students can borrow up to $20,500 per year. In 2011 new Stafford loans interest rates are at 3.4%. Origination fees of up to 3% may apply. Federal Unsubsidized Stafford Loans are low interest loans for students not based on financial need. While in school you may choose to make interest payments or let the interest build up and pay it with the principal upon 6 months after graduation or leaving school. The repayment terms and maximum loan amounts and interest rates are the same as the Subsidized Stafford Loans.

Title IV Loans were created by the Higher Education Act of 1965. It created several education loan programs which are collectively referred to as the Federal Family Education Loan Program (FFELP). These loans, also called Title IV Loans, are the Federal Stafford Loans (Subsidized and Unsubsidized), Federal PLUS Loans and Federal Consolidation Loans. The Title IV School Codes are needed when you fill out the FAFSA form. You need to supply the Title IV Code for each school to which you are applying. This code is a six-character identifier that begins with one of the following letters: O, G, B, or E.

Named after IRS Code Section 529, it is a qualified state tuition plan. A contribution to a qualified plan is treated as a cpmleted gift passed froma contributer to a benficiary. Contributions are eligible for the annual gift tax exemption of $13,000. Married couples can gift up to $26,000 a year. Investment earnings within college savings programs grow federal income tax deferred. The investment earnings are taxed at the student's rate when withdrawn for college tuition and room and board. You can use the College Savings Program assets to pay any type of qualified higher education expenses such as tuition, fees, room and board, books and supplies. College Savings Program funds can be used at any accredited post secondary public or private school eligible to participate in federal student financial assistance programs anywhere in the U.S. This includes any 2 and 4 year undergraduate programs, technical schools plus graduate and professional schools. Funds can be withdrawn without penalty if the beneficiary receives a scholarship (withdrawals can be made up to the scholarship amount) or in the event of the death or disability of the beneficiary. Ordinary income taxes will be owed on any investment earnings. State tax treatment of contributions may vary. You can take money out of a 529 plan at any time. Your investment earnings are subject to income taxes at the account owner's tax rate plus a 10% federal tax penalty. State income tax treatments on 529 Plan's nonqualified withdrawals vary by state. There are pros and cons to this tax strategy. These accounts may be considered the child's asset when determining financial aid.

Generally, repayment must begin within sixty days after the final loan disbursement for the academic year. There is no grace period for these loans. This means that interest begins to accumulate at the time the first disbursement is made. Your parents must begin repaying both principal and interest while you are in school.

Currently Plus Loans can be obtained at a Fixed interest rate of 8.5%. Your parents will be notified of interest rate changes throughout the life of their loan. Interest is charged on the loan from the date that the first disbursement is made until the loan is paid in full. This loan is based on credit-worthiness and the parent starts repayment 60 days after the full disbursement of the loan. The parent may borrow up to the student's cost of education, excluding awarded financial aid.