Federal Direct Stafford Loan

Direct Loan Process for the 2010–2011 School Year

What is a Federal Direct Stafford Loan?
The Federal William D. Ford Direct Stafford Loan is a loan for matriculated students made through the U.S. Department of Education. Direct Loans are either subsidized or unsubsidized. A subsidized loan is awarded on the basis of financial need. If you qualify for a subsidized loan, the federal government pays interest on the loan until you begin repayment. An unsubsidized loan is not awarded on the basis of need. If you qualify for an unsubsidized loan, you will be charged interest from the time the loan is disbursed until it is paid in full. You can choose to pay the interest or allow it to accumulate. If you allow the interest to accumulate, it will be capitalized—that is, the interest will be added to the principal amount of your loan and will increase the amount you have to repay. If you pay the interest as it accumulates, you will repay less in the long run.

The total debt you can have outstanding from all Direct Loans and Federal Family Education Loans combined is:

• $31,000 as a dependent undergraduate student; (no more than $23,000 of this amount may be in subsidized loans)
• $57,500 as an independent undergraduate student; (no more than $23,000 of this amount may be in subsidized loans)

How Do I Apply?

To apply for a Federal Direct Student Loan, all applicants must first file a Free Application for Federal Student Aid (FAFSA). Students who indicate on the FAFSA that they are interested in student loans will automatically be offered a student loan when their financial aid awards are packaged. Students who do not indicate on their FAFSA that they are interested in a student loan, but would like to borrow a student loan, should contact the CIA Financial Aid Office.

Students who are borrowing a Federal Direct Student Loan at CIA for the first time are required to complete Loan Entrance Counseling.

Once the Loan Entrance Counseling session is completed, the CIA Financial Aid Office will receive an electronic confirmation. Students should print the confirmation form at the end and keep it for their records. Students who do not complete Loan Entrance Counseling session will NOT receive their Direct Loans.

Also, students who are borrowing a Federal Direct Student Loan for the first time are required to sign a Master Promissory Note (MPN). By signing the MPN, the student agrees to the terms and conditions of the loan. Signing the MPN is done electronically using the student's Federal PIN at the Federal Direct Loan Web site. Student will be notified by the CIA Financial Aid Office if they need to sign a MPN.

How Is My Loan Disbursed?

The U.S. Department of Education will pay your student loan funds through The Culinary Institute of America. Your loans will be disbursed in two equal installments, one at the beginning and one at the midpoint of the loan period. Your loan money must first be applied to your school account to pay for tuition and fees, and other school charges. If loan money remains, you will be eligible for a refund.

How Do I Repay My Student Loan?

The U.S. Department of Education will pay your student loan funds through The Culinary Institute of America. Your loans will be disbursed in two equal installments, one at the beginning and one at the midpoint of the loan period. Your loan money must first be applied to your school account to pay for tuition and fees, and other school charges. If loan money remains, you will receive a refund at Bursar's office.

For more information on Repayment of student loans, visit the Repaying section of the Federal Student Aid Web site. In addition, the repayment plans will be explained in more detail during entrance and exit counseling sessions.

For more information of the Federal Direct Student Loan program, you can go to the Federal Student Aid Direct Loan Web site.