1. What is a Federal Stafford Loan?
Federal Stafford Loans are made by private lending institutions such as banks or credit unions to undergraduate and graduate students to help them cover the costs of higher education. These loans are typically the least expensive loan option with interest rates lower than private credit loans, no payments while the student is in school at least half time, up to a 6 month period preceding repayment when no payments are required and up to 10 years to repay. Students are encouraged to exhaust their federal loan eligibility before looking in to Private Loans. There are two types of Stafford Loans, "subsidized" and "unsubsidized". Apply for a Federal Stafford Loan.
2. What is the difference between a subsidized or unsubsidized Federal Stafford Loan?
Subsidized Federal Stafford loans are awarded on the basis of financial need. The federal government pays the interest on these loans during in school, grace and deferment periods. Unsubsidized Federal Stafford loans are available to students regardless of financial need. Students are responsible for paying the interest that accrues on the loan from the time the loan is disbursed until it is paid in full.
3. What is a Federal PLUS Loan?
Federal PLUS loans are available to graduate and professional students to
borrow on their own behalf. Federal PLUS loans are also available to the
parents of dependent, undergraduate students. All PLUS borrowers may borrow
up to the full cost of attendance minus other aid received. However, before
pursuing a Graduate PLUS loan, graduate and professional students should
exhaust their federal Stafford loan eligibility (subsidized and
unsubsidized).
Apply for a Federal Parent PLUS
Loan
Apply for a Federal Graduate PLUS
Loan
4. What expenses can be covered by Federal Stafford and Federal PLUS Loans?
Money borrowed through Federal Stafford and Federal PLUS Loans can be used to cover tuition, room and board, books, and other education-related expenses.
5. Who is eligible for a Federal Stafford or a Federal PLUS Loan?
Undergraduate and graduate students who are pursuing post-secondary education are eligible to apply for Stafford loans. Parents of undergraduate, dependent students may apply for a PLUS loan. In addition, graduate and professional students may apply for a Federal PLUS Loan on their own behalf.
6. What is a FAFSA?
The Free Application for Federal Student Aid (FAFSA) is a form to be completed by students who are interested in applying for federal and state student grants, work-study and loans. The FAFSA form can be completed online at www.fafsa.ed.gov or paper copies may be obtained from the Financial Aid office at many high schools and colleges.
7. Who is the primary borrower on a Federal Stafford Loan or Federal PLUS Loan?
The undergraduate or graduate student is the borrower on a Federal Stafford Loan. The parent of a dependent, undergraduate student of the graduate student themselves is the borrower on a Federal PLUS Loan.
8. Whom do I contact with a question that is not found here in the FAQs?
If you have questions, please call 1-800-UPROMISE (1-800-877-6647).
1. What does the Tuition Answer Loan cover?
The Tuition Answer Loan covers any college-related expense: tuition, supplies and lab fees, books, room and board, a new computer or computer upgrade, discretionary costs of attending school, travel expenses, studying abroad, and fraternity/sorority or club dues.
2. What is the Tuition Answer Loan interest rate?
The interest rate is a variable rate, set monthly and is based on the Prime Rate, not to exceed the highest Prime Rate as published in The Wall Street Journal plus a margin. The interest rate on your Tuition Answer Loan will increase or decrease if the Prime Rate increases or decreases.
Refer to your Truth in Lending disclosure statement for your loan's detailed interest rate and APR information.
3. How is the interest rate for this loan calculated?
Rates and fees are determined by the borrower's and any cosigner's credit history at the time of application and the repayment option chosen. Interest rates are subject to change monthly based on the fluctuation of the Prime Rate as published in The Wall Street Journal. If you have excellent credit and begin repayment immediately, you'll get the lowest rates and fees.
4. How do I check the status of my loan?
Visit www.tuitionanswer.com and complete the "Check my loan status" box. You will need a confirmation number and Social Security number to view your account status.
5. What information is needed to process my loan?
To process your loan, Sallie Mae needs:
The school document must show the student name, school name, and the current academic period for which the loan is requested.
6. What is the process for faxing documents to Sallie Mae?
7. When and how will checks be mailed?
Please allow 5-7 business days after the disbursement date for your check to arrive.
Tuition Answer Loan checks are sent through the U.S. Postal Service.
8. How is my loan payment determined?
Your Tuition Answer loan payment is determined by the following:
You will receive a Truth in Lending disclosure before your loan is disbursed that shows your interest rate and payment schedule.
9. What are the repayment options?
10. Are student loans better than credit cards?
Low interest education loans are the most financially sound way to finance your education. Student loans usually carry a much lower interest rate than credit cards and can allow you to choose repayment terms that fit your budget. Additionally, if you experience financial hardship you may request forbearance of your student loan payment without penalty.
11. How do student loans protect my retirement funds?
Low interest education loans can be a great alternative to liquidating higher-yielding investments. Remember, you can borrow money to send your child to school, but you cannot borrow for your retirement.
12. What is good credit?
During the application process, Sallie Mae will review each applicant's credit history and FICO score. In addition to generally accepted FICO ranges indicating good credit, to meet Sallie Mae's credit requirements for the Tuition Answer Loan, creditworthy borrowers or cosigners must:
Many undergraduate students will not meet minimum credit requirements and are encouraged to apply with an eligible cosigner who does. A cosigner can be a parent or any other eligible adult sponsor-such as another relative or spouse.
For more information on creditworthiness and FICO scores, visit www.myfico.com/CreditEducation.
13. Why and when is a creditworthy cosigner needed for a Tuition Answer Loan?
14. What is the benefit of applying with a creditworthy cosigner?
Applying with a creditworthy cosigner may reduce the overall cost of borrowing as the interest rate and fees charged are lower then if you borrowed on your own.
15. How do I cancel my Tuition Answer Loan?
Contact customer service to request a cancellation. If you have received
your check, please return it to:
Sallie Mae Tuition Answer Loan
P.O. Box 859243
Braintree, MA 02185-9243
16. How do I change my loan amount?
Your loan amount may be decreased only if the loan has not been scheduled for disbursement. A verbal request to decrease the loan amount is acceptable. Please contact customer service at (800) 749-9100.
The loan amount may be increased if the loan has not been scheduled for disbursement:
17. How do I stop payment on my Tuition Answer Loan check?
Please allow at least 10 business days from the time the check was mailed before you request a stop payment.
If the check is not received after the 10th business day, please call customer service at (800) 749-9100 to request a stop payment on your check. You may be asked to submit your request in writing.
18. How is a check reissued after a stop payment?
The check will be mailed by U.S. Postal Service directly to the borrower. Before a check is reissued, Sallie Mae will send a Reissue Request Letter that you will need to sign and return to Sallie Mae along with a copy of one of the following:
1. What is a Consolidation Loan?
A Consolidation Loan allows you to combine many different student loans into one loan as a tool to manage your educational debt. The main advantages of consolidation are locking in a fixed, lower interest rate with a single monthly payment on your education debt.
Apply for a Consolidation Loan.2. What loans are eligible to be consolidated?
The following federal loan programs are eligible for student loan consolidation:
Subsidized Federal Stafford Loans
Unsubsidized Federal Stafford Loans
Federal Direct Student Loans
Federal Perkins (formerly NDSL)
Health Professional Student Loans
FISL
Federal PLUS Loans (Parent and Graduate PLUS)
Federal Consolidation Loans
Nursing Student Loans
Federal Supplemental Loans for Students (SLS)
3. Who is eligible for a Consolidation Loan?
Anyone with an eligible federal education loan may apply for a Federal Consolidation Loan. Federal loans must be in grace, repayment, deferment or forbearance status to be eligible to consolidate. Stafford loans that are in an in-school (pre-grace) status cannot be consolidated.
4. Will my monthly payments decrease with a Consolidation Loan?
Typically, monthly payments will decrease. Under consolidation rules, existing student loans are being combined into a new loan with a fixed interest rate and new repayment term. The new repayment term can range from 10 years to as long as 30 years, depending on the borrower's level of education indebtedness. The longer payback period can reduce a borrower's monthly payment by as much as 45%.
5. Is there a credit check?
Private lenders are not required to impose any credit check requirements when consolidating federal education loans under the Federal Consolidation Loan program.
6. Are there any fees for consolidation?
No, there are no application fees or prepayment fees.
7. Do borrowers sacrifice any key federal benefits when they consolidate their Federal education loans?
No, consolidation loans are eligible for important deferment and forbearance benefits. In addition, subsidized Stafford loans retain their federal interest subsidy after being consolidated.
8. Whom do I contact with a question that is not found here in the FAQs?
If you have questions, please call 1-800-UPROMISE (1-800-877-6647).
© 2008 Upromise, Inc. All rights reserved. The lender for the Upromise Student Loan Program is RBS Citizens, N.A., Member FDIC and Equal Opportunity Lender.