Allegany College of Maryland

What is a Federal Stafford Loan?
What are the loan limits?
What is an E-Signature?
What is a Master Promissory Note?
How will funds be disbursed?
How does ACM select Recommended Lenders?
How does a student choose a lender?
Steps in Applying for a Stafford Loan?
- Loan Change Request Form

Student Loan Application Guide

College Center at dusk

If you are interested in the Federal Family Education Loan Program,
PLEASE READ THIS ENTIRE DOCUMENT CAREFULLY.

School Code: 002057

WHAT IS A FEDERAL STAFFORD LOAN?

The Federal Stafford Student Loan Program is a federal loan designed to help students pay for educational expenses. The loan is issued from a lender or bank after approval and certification from the school. There are two types of these loans:

Subsidized Loan - is awarded on the basis of need. If a borrower qualifies for a subsidized loan, the federal government pays interest on the loan ("subsidizes") until the student finishes college, ceases enrollment, and during authorized periods of deferment.

Unsubsidized Loan - is not awarded on the basis of need. If a borrower qualifies for an unsubsidized loan, interest is charged from the time the loan is disbursed until it is paid in full.

Loans may be processed for one or the other or a combination of the two, depending on the borrower's eligibility.

WHAT ARE THE LOAN LIMITS?

Maximum Undergraduate Federal Stafford Loans
Per Academic Year

Grade Level	BASE Limit	ADDITIONAL Limit
	(Sub/Unsub)	(Unsub Only)
Freshman Grade l (0-27 earned/transfer credits)	$3,500 + $2,000 Unsub	$4,000

Sophomore Grade 2 (28 credits and above)	$4,500 + $2,000 Unsub	$4,000

ACM can only certify loan eligibility through the sophomore level.

Loan funds may be subject up to a 2 percent fee withheld by the lender prior to each disbursement.

Dependent Students (those required to use Parental Information) can only apply up to the BASE Limit amount plus $2,000 Unsubsidized. Dependent students with a PLUS Loan Denial may apply for ADDITIONAL amounts.

Independent Students (those not required to use Parental Information) can apply for the BASE plus $2,000 Unsubsidized and the ADDITIONAL amounts.

Students must take at least six credits per semester in order to have a loan processed.

Average Loan Indebtedness at Allegany College of Maryland is currently $10,077 per graduate!

Please contact the Financial Aid Office at 301-784-5213 if you have any questions.

The following web site http://mapping-your-future.org/apps/debtwizard/ is an interactive calculator which helps students and parents determine:

how much salary is needed to make the payments on current and future student loan debt and
how much can be borrowed based on future expected earnings

Monthly Repayment Chart (PDF - 340KB)

Electronic Signature (E-sign) is the new, convenient and fast way to sign your loan application on-line rather than by printing a promissory note signature page, signing it in ink, and then sending it through the U. S. mail. E-sign is an electronic process or symbol that a student/parent uses to show intent to "sign" a legally binding document. You may need to have your “Pin Number” from your FAFSA to e-sign your promissory note.

The Master Promissory Note (MPN) is a contract students sign when Stafford loans are processed. It is a binding legal document that indicates commitment to repay student loan(s). The note includes important information regarding the rights and responsibilities of the borrower.

The MPN can be used as a multi-year note, meaning the student may receive multiple loans for multiple years by signing only one MPN. A MPN is good for 10 years from the date the loan is signed. A MPN may be used for any loan period that begins within the 10-year time frame, providing the first loan is disbursed within 12 months after signing the note. The MPN should make the borrowing process easier for borrowers and schools alike.

Once the loan is guaranteed the loan funds are sent to the school by EFT (Electronic Funds Transfer). Proceeds are then applied to the student's account and any remaining funds will be disbursed to the student. The Business Office will mail each refund check to the student so please keep the college posted of your current address, temporary & permanent.

The loan will be disbursed in at least two payments; no payment may exceed one-half of the total loan amount.

NOTE: All First-year First-time borrowers at Allegany College of Maryland will have the first disbursement held until 30 days from the first day of the semester.

We strive to provide the best loans possible to our students. In doing so, we have created a recommended lender list for students at ACM to use; however, students are informed that they are free to choose any lender that they wish in order to process a federal student loan for them.

The recommended lender list was formed on the basis of the following factors:

Quality of customer service to students and financial aid administrators
Front end fees/benefits for borrowers
Repayment incentives/benefits for borrowers
On-line and web products offered
Name recognition and stability of lender
Hold/sell loans after origination
Marketing techniques/ethics of the lender
Compliance with Common Line and all federal, state, and local regulations

Each year the recommended lender list is reviewed and analyzed according to the above criteria by our Student Loan Officer, Student Loan Counselor, and the Director of Student Financial Aid. Lenders will be added or removed as necessary.

The recommended lender list appears on the ACM Financial Aid webpage under “How to Select a Lender,” and includes the statement that students are free to choose any lender they wish. Please direct any additional questions to the Student Financial Aid Office.
Revised December 2007

HOW DOES A STUDENT CHOOSE A LENDER?

Students must select a lender that participates in the Stafford Loan Program. Allegany College of Maryland has developed a list of recommended lenders from which to choose and who have a reputation for excellent service with the college.

Allegany College of Maryland will process loans from any lender as long as the student provides name of lender, lender code & guarantee agency. This may delay the payment of the students loan!!

STEPS IN APPLYING FOR A STAFFORD LOAN

Students must complete the Free Application for Federal Student Aid (FAFSA) and the ACM Finanical Aid Application and have a complete file for the academic year before the loan process will begin.

A completed file includes:

FAFSA results
Allegany College of Maryland Financial Aid Application
Signed Federal tax returns for students and/or parents, as requested
Non-tax filing statement, if applicable
Verification Worksheet.

Once the student is registered for at least 6 credits and has a completed file, the loan will be certified.
New/Transfer Borrowers:
- Cancel all loan(s) and other aid at prior institution that cover the same period of enrollment desired at Allegany College of Maryland.
- Financial Aid may not be received at more than one institution for the same period of time.
- Notify previous lender(s) and/or servicer of:
  - the decision to transfer to Allegany College of Maryland & Request a Loan Deferment form
  - the new anticipated graduation date from Allegany College of Maryland

All Stafford Loan borrowers at Allegany College of Maryland will be required to complete the on line Entrance Counseling Session and Quiz. Previous borrowers at other institutions must still complete the Entrance Counseling. The results of the on-line quiz will be e-mailed to the Financial Aid Office.

When the loan has been awarded, an Award Letter confirming the approved loan amount is mailed to the student.

NOTE: A school can refuse to certify a loan or can certify a loan for an amount less than requested if the school documents the reason in writing. The school's decision is final and cannot be appealed to the U. S. Department of Education.

Financial Aid Office - 301.784.5213 financialaid@allegany.edu