The Stafford Loan Program
Loan Processing Fees
Borrowing Limits
Repayment
Stafford Application Process
Parent PLUS Loans
Alternative Loans

The Stafford Loan Program
Stafford Loans are part of the Federal Family Education Loan Program (FFELP).  The Stafford Loan Program offers two types of low interest, variable rate loans for student borrowers: subsidized Stafford Loans and unsubsidized Stafford Loans. Both have a variable interest rate, with a cap of 8.25 percent.  The subsidized and unsubidized loans both require the student be registered in at least six degree required credits.  The average amount that students borrowed at Columbia Basin College during the 2005-2006 academic year was $5,240.27.   

Subsidized Stafford Loans
With a subsidized Stafford Loan, the government makes the interest payments on your loan at certain times, such as while you are in school or in deferment.  To qualify for a subsidized Stafford Loan, you must demonstrate financial need by submitting the Free Application for Federal Student Aid (FAFSA).  The results reveal how much you and your family should contribute toward your education costs.  Your cost of attendance minus your expected family contribution establishes your financial need.

Unsubsidized Stafford Loans
With an unsubsidized Stafford Loan, you are responsible for interest  payments, even while you are in school.  You can either make interest payments or postpone them.  If you postpone interest payments, the lender will add the accrued interest to your principal balance.  This is known as capitalization.  Capitalization increases the total amount you will repay.  You will save money by making your interest payments.  Financial need is not required to qualify for an unsubsidized Stafford Loan, but the cost of your education must exceed any other financial aid you have been awarded.

Return to top
Loan Processing Fees 
All federal Stafford Loans are subject to origination fees.  These fees are paid to the federal government to offset administrative costs.  Loan origination fees will be deducted from your loan proceeds prior to disbursement, and you are responsible for the repayment of all such fees.

Borrowing Limits 
The Stafford Loan Program has limits on the amount you can borrow each year.  The CBC Student Financial Services office personnel will determine how much you are eligible to borrow.

Keep in mind that you may be repaying your Stafford loan for as long as 10 years.  The more you borrow, the higher your monthly payment will be.  Borrow only what you need.  The size of your monthly payments may make the difference between manageable and unmanageable debt in your  future.

Return to top

Academic Grade Level/Loan Type	Maximum Loan Amount
First-Year Undergraduates	Dependent Student	Independent Student or Dependent Student whose Parent is Ineligible for PLUS Loans
Base Stafford Loan eligibility (subsidized and unsubsidized)	$3,500.00	$3,500.00
Additional unsubsidized Stafford Loan eligbility	$2,000.00	$6,000.00
Maximum First-Year Total	$5,500.00	$9,500.00
Second-Year Undergraduates
Base Stafford Loan eligibility (subsidized and unsubsidized)	$4,500.00	$4,500.00
Additional unsubsidized Stafford Loan eligbility	$2,000.00	$6,000.00
Maximum Second-Year Total	$6,500.00	$10,500.00
Aggregate (total) Undergraduate	$31,000.00 (no more than $23,000 of which may be subsidized)	$57,500.00 (no more than $23,000 of which may be subsidized)

*If you have been accepted into the Bachelors in Applied Science degree program contact the financial aid office regarding borrowing limits.

Repayment
When you graduate, leave school, or drop to less than half-time status, you have a six-month grace period before repayment begins.  Within 30 to 45 days after the grace period ends, you must begin to make monthly payments.  The payment amount depends on the repayment option you select.  If you want to select a plan other than standard repayment, please contact your lender before you enter your repayment period.  You may prepay all or part of your loan at any time with out penalty.  You will save money by paying off your loans early.

Repayment Options 
Standard Repayment
With the standard repayment plan, you make the same payment every month for the entire term of the loan.  The payment terms will not exceed 10 years, and the minimum monthly payment is $50.

Graduate Repayment
The graduated repayment plan initially requires lower payments, then  gradually increase the payment amount over the repayment period.  This option results in higher interest costs over the life of the loan as compared to the standard repayment schedule.  There is a 10-year maximum repayment period, and payments must be at least the amount of the monthly interest.

Income-Sensitive Repayment
The income-sensitive repayment plan adjusts borrower payment annually based on income.  As income fluctuates, so do the payments.  Depending on the size of the debt and your monthly income, you may be granted up to 15 years to repay your loan.  Payments must be at least the amount of the monthly interest.

Extended Repayment
Stafford borrowers with no outstanding FFELP Loans disbursed prior to October 7, 1998, are eligible for extended repayment if they have a FFELP Loan debt of more than $30,000.  Through extended repayment, borrowers may pay under a fixed or graduated plan and must repay the loan with in 25 years.  Borrowers interested in extended repayment must request this option from their lenders.

Return to top

The Application Process

1. CBC certifies most Stafford Loan applications electronically.
2. You will be sent a Financial Aid Notification by postal or email with the maximum amount you are eligible to receive or the maximum amount of your request, whichever is lower.
3. Your lender will process your loan and disburse the appropriate funds by the Electronic Funds transfer process to CBC quarterly.  Two disbursements in one quarter will be made for one-quarter loan periods.
4. Your loan funds will be mailed to you.  You must be sure that your tuition/fees are paid.
5. Federal regulations require you to complete an Exit Counseling session upon termination at CBC, whether you graduate or withdraw.  This  session will give you additional information about your rights and responsibilities as a borrower.  CBC requires you to complete your Exit Counseling before your last check for the academic year will be released to you.  You will be notified of Exit Counseling session dates and times.
6. To apply for a  Stafford Loan, you must complete all of the following steps:
   
   
   1. Your financial aid application is complete at CBC and you are determined to be eligible for a loan.
   2. All Federal Stafford Loan borrowers are required to complete an Entrance Counseling session prior to applying for your loan.  The purpose of the Entrance Counseling session is to help you understand your rights and responsibilities as a borrower so that you can properly manage your future indebtedness.  Please visit mapping-your-future to complete your entrance counseling.
   3. Complete, print, and submit the debt/salary wizard screen showing your estimated monthly payments and required salary to repay these loans.  Use the debt/salary wizard to complete this step.
   4. Print, complete, and submit the 2009-2010 Student Loan Worksheet along with the debt salary wizard to the Student Financial Services office.
      *If you have been accepted into the Bachelors of Applied Science degree program contact the Financial Aid office before completing this step.
   5. Complete and electronically sign your Master Promissory Note with your lender.

Return to top

Parent PLUS Loans
Parent PLUS Loans are non-need based loans available to parents of dependent students to help with educational costs.  Dependency status is determined by information on the student's FAFSA.  The yearly maximum loan limit cannot exceed the total cost of attending CBC minus other financial aid awarded.  The interest rate is 8.5 percent.

The following lenders have demonstrated timeliness of disbursement, borrower benefits, and quality service.  Lenders provide different benefits, so you should investigate to learn what each lender can offer you.  You may use any lender you wish, even lenders that are not listed below. Some lenders that do Parent PLUS loans are Bank of America, CHELA, Nellie Mae, US Bank, and Wachovia.

Alternative Loans
Alternative loans are non-need based private loans.  Eligibility and loan criteria is determined by the lending institutions.  When considering alternative loans here are some questions for your prospective lenders: What is your lowest interest rate and fee combination and how can I get it?  Is the rate only for a limited period, or is it for the life of the loan?  Is there a limit on how high the variable rate can go?  How often is the interest rate adjusted, and how is it determined?  What interest rate can I get on a fixed-rate loan?  How long will I be repaying the loan?  Is there any penalty for paying it off early?  What proportion of your borrowers get the discounts you offer?  Are your discounts guaranteed or are they subject to change later?