Federal Stafford Loans

Federal Stafford Loans are long-term, low interest education loans made to undergraduate and graduate students by private lending institutions, such as banks, savings and loan associations or credit unions, through a federal program administered by American Education Services (AES), which is a division of PHEAA.  Interest payments may be tax deductible for Stafford loans.  Consult your tax preparer for details.  There are two types of Stafford loans, subsidized and unsubsidized; depending on your financial need the student may be eligible for one or both loans. The financial aid office at your school will determine your eligibility for a subsidized or unsubsidized loan.  The maximum amount that a student can borrow depends on their grade level, and if they are considered to be dependent or independent for financial aid purposes in the academic year they are applying.  

Stafford Loan Eligibility Requirements:

• Complete a Free Application for Federal Student Aid (FAFSA) for the appropriate academic year.
• Be a U.S. citizen or eligible non-citizen.
• Be accepted for enrollment in a participating school; or, if enrolled, be making satisfactory progress.
• Be classified as at least a half-time student working toward a degree or certificate.
• Not be in default on an education loan.
• If required, be registered with the Selective Service.
• Have financial need in order to receive a Subsidized Stafford Loan. 

Interest Rates & Fees

The interest rates on all Federal Stafford Loans first disbursed on or after July 1, 2008 and before July 1, 2009 will be fixed at 6.8% with the exception of the undergraduate subsidized Stafford which will be fixed at 6%. The same rate applies to in-school, grace and repayment periods. The interest rate on any existing Stafford Loans will continue to be a variable rate adjusted annually each July 1st, not to exceed 8.25%. Two fees, an origination fee and a guaranty fee, are deducted from each loan disbursement. The U. S. Department of Education charges an origination fee of 1% and there is a 1% Guaranty Fee, also known as Federal Default Fee. First National Bank participates in the KeystoneBEST loan program, with zero origination fees.  Click here for details.

Repayment

Repayment on a Federal Stafford Loan begins after you are no longer attending school on at least a half-time basis at an approved school (whether through graduation, withdrawal, dropped classes or other reason) and after an allowable grace period has passed.  Generally, the grace period is six months, and the payment level will equal an amount that will pay off the loan, with interest, within 10 years.  Details of deferring repayment for longer periods are provided on the back pages of the application.  In addition, other options for repayment, such as loan consolidation, may be available depending on your individual circumstances.  Information on your responsibilities and available options may be obtained from AES/PHEAA.  

Stafford Loan Application Procedure:

STEP ONE: Complete the Free Application for Federal Student Aid (FAFSA) or a Renewal FAFSA.  When the FAFSA is processed, your school will receive the results and after reviewing will inform you of your loan eligibility.  

STEP TWO: Complete the Federal Stafford Loan Master Promissory Note (MPN) if you have not previously completed one, or if your school requires a new MPN to be signed annually. (Since the MPN can be used as a multi-year note, returning students should check with their school or lender to see if they need to complete a new application.)

You can go to any of our branch offices to pick up a student loan packet, or you can e-mail our Student Loan Officer at studentloans@fnbn.com and request to have an application sent to you.  You can also apply online at www.aessuccess.org.

The lender code for First National Bank is 809507.