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Student Loan and Financial Aid Frequently Asked Questions

Applying for a Student Loan can be confusing and you may have a lot of questions before you even begin. Click the questions below to view the answers. If you have any other questions not listed, click here or call 1-800-239-4376.

What is financial aid?

How and when do I apply for financial aid?

Do I need to apply every year for financial aid?

What is my first step when applying for a Student Loan?

My parents’ income may be too high for me to qualify for a Student Loan, should I still apply?

What is the difference between an Unsubsidized and Subsidized Student Loan?

What are the maximum amounts I can receive from federal funding?

I’m not eligible to receive the maximum loan amount for the Subsidized Student Loan, is there another loan available for additional funding?

Once my Student Loan is approved, when will my funds be disbursed?

Is there a federal loan available that my parents can apply for to help with college expenses?

What other loan options are available for college funding?

When does repayment of my loan(s) begin?

I have four Student Loan payments, can I consolidate my loans?

What is financial aid?
Financial aid is educational funding that is given to you as grants, scholarships or federal and private loans. It’s available to students of any income level and provided by private sources, state and federal government agencies or colleges and universities.

How and when do I apply for financial aid?
In the fall of the year before you plan to attend school, obtain a copy of the Free Application for Federal Student Aid(FAFSA) from your financial aid office and submit the form as soon as possible after January 1.

Do I need to apply every year for financial aid?
Financial aid does not automatically renew every year. The amount of financial aid you receive depends on your family’s financial situation and government regulations. Since this may change from year-to-year, you have to apply each year.

What is my first step when applying for a Student Loan?
Complete the Free Application for Federal Student Aid (FAFSA) from the financial aid office of the school you’ll be attending and mail it to the listed government agency. You’ll receive an Award Letter from your school informing you of the loan type and amount you’re eligible to receive. Next, complete the Borrower Section on the application and the Master Promissory Note and follow the mailing instructions on the application.

My parents’ income may be too high for me to qualify for a Student Loan, should I still apply?
Yes. The Federal Stafford Loans are awarded based on financial need, which determines how much your family is expected to contribute regardless of income. If you do not qualify for a Subsidized Loan, you can apply for an Unsubsidized Loan. Private loans may also be available.

What is the difference between an Unsubsidized and Subsidized Student Loan?
Subsidized Loans are awarded based on financial need. The federal government will pay the interest while you are in school up until repayment begins after the six-month grace period.

Unsubsidized Loans are not awarded based on financial need.
You will be responsible for making the interest payments when the loan is disbursed. You may qualify for this loan even if your family’s income exceeds the guidelines.

What are the maximum amounts I can receive from federal funding?
The maximum loan amounts depend on what year you are in and whether you are considered a dependent or independent student. See chart below.

Maximum Annual Stafford Loan Amounts
Student Year	Dependent Student	Independent Student
1st Year Undergraduate	$2,625	$6,625
2nd Year Undergraduate	$3,500	$7,500
3rd – 4th Year Undergraduate	$5,500	$18,500
Graduate/Professional Student	$8,500	$18,500

Student’s Enrollment Level	Total Loan Maximum	Total Loan Maximum
Undergraduate	$23,000	$46,000
Graduate/Professional	$65,000	$138,500

I’m not eligible to receive the maximum loan amount for the Subsidized Student Loan, is there another loan available for additional funding?
Yes. There are Private/Alternative Loans, such as the Signature Student Loan,^® that can help provide supplemental funding that financial aid or Federal Stafford Loans don’t cover. These loans are not federally funded and are awarded based on the borrower’s credit rating.

Once my Student Loan is approved, when will my funds be disbursed?
It takes approximately five days to disburse the funds to your school. Although, if the application is not completed correctly, this will delay the process.

Is there a federal loan available that my parents can apply for to help with college expenses?
Yes, the Parent Loan for Undergraduate Students (PLUS) is a government guaranteed student loan program designed to help parents and independent graduate students pay for educational expenses at post-secondary schools. This loan may be used separately or in addition to Stafford Loans.

What other loan options are available for college funding?
If you are a homeowner, you may have sufficient equity in your home to take out a home equity loan or line of credit. Home equity loans and lines of credit can be used for any number of purposes, with education financing being one of the most popular. And remember, the interest you pay on a home equity loan or line of credit may be tax deductible (consult your tax advisor regarding the deductibility of interest). Click here to learn more about Dollar Bank’s Home Equity Loan options.

When does repayment of my loan(s) begin?
If you have a Subsidized Loan, repayment will begin six months after graduation or termination of education or if you are less than a part-time student. The government pays the interest while you are in school.

For an Unsubsidized Loan, your principal payments are deferred while you are in school and for a six-month grace period after graduation. You are responsible for making the interest payments while enrolled. You can request to have your interest payments deferred, but the interest will continue to accrue and will be added onto the principal loan amount.

Repayment of PLUS Loans begin within 60 days after the last loan disbursement is made. You cannot defer PLUS Loans unless the borrower is in school or have another PLUS Loan prior to July 1, 1993.

I have four Student Loan payments, can I consolidate my loans?
You can consolidate or combine your loans into one monthly payment after graduation or termination of your education.

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