Types of Federal Student Aid

Federal Student Aid (FSA), also known as Federal Financial Aid, offers grant and loan programs administered by the U.S. Department of Education. AAU participates in the following grants and loans available through Federal Student Aid.

Federal Grants

Pell Grants

A Federal Pell Grant, unlike a loan, does not have to be repaid. Pell Grants are awarded to undergraduate students who have not earned a bachelor's or a professional degree. Pell Grants are considered a foundation of Federal Student Aid, to which aid from other federal and nonfederal sources might be added.

The maximum Pell Grant award for the 2011-12 award year (July 1, 2011 to June 30, 2012) is $5,550. The amount you receive will depend not only on your financial need, but also on your costs to attend school, your enrollment status, and your plans to attend school for a full academic year or less. Note: Students whose parent or guardian died as a result of military service in Iraq or Afghanistan after Sept.11, 2001 are potentially eligible to receive an increased amount of Federal Student Aid if the student was under 24 years old or enrolled at an institution of higher education at the time of the parent or guardian's death.

All Pell Grant eligible students can only receive the Pell Grant for up to 12 semesters or its equivalent.

The Pell Grant amount awarded will depend on:

• Estimated Family Contribution (EFC)
• Cost of Attendance
• Enrollment Status

Iraq and Afghanistan Service Grant

Students who have an EFC that is not Pell eligible and whose parent or guardian died as a result of military service in Iraq or Afghanistan after Sept.11, 2001 may be eligible for the Iraq and Afghanistan Service Grant (IASG) if the student was under 24 years old when the parent or guardian died, or enrolled at an institution of higher education at the time of the parent or guardian's death.

The Iraq and Afghanistan Service Grant is made under the same terms and conditions as the Federal Pell Grant. Therefore, the maximum award for the 2011-12 award year (July 1, 2011 to June 30, 2012) is $5,550. The amount you are awarded will depend on your costs to attend school, your enrollment status, and your plans to attend school for a full academic year or less. Funds will be disbursed each semester according to the student's enrollment status for the semester.

 

Federal Loans

Federal Direct Stafford Loans

Federal Direct Stafford Loans, also known as Direct Loans, are Federal Student Loans made directly available to college and university students and are used to supplement personal and family resources, scholarships and grants. They may be subsidized by the U.S. Government or may be unsubsidized depending on the student's financial need.

Federal Direct Stafford Loans include the following two types of loans:

1. Federal Direct Subsidized Stafford Loans - Direct Subsidized Loans are for students with financial need. They are awarded on the basis of the student's financial need and other specific eligibility requirements. AAU's Financial Aid Office will review the results of your Free Application for Federal Student Aid (FAFSA) and determine the amount you can borrow. The federal government does not charge interest on these loans while borrowers are enrolled at least half-time or during authorized periods of deferment. Repayment of subsidized loans begins six months after enrollment has ceased or dropped below half-time status.
   

Interest Rate on Direct Subsidized Loans

The interest rate on subsidized loans first disbursed to undergraduate students between July 1, 2011 and June 30, 2012 will be fixed at 3.4%. Note: If your subsidized loan is disbursed before June 30, 2012 the federal government also does not charge interest on these loans during a six-month grace period.

The interest rate on subsidized loans first disbursed to undergraduate students between July 1, 2012 and June 30, 2013 will be fixed at 6.8%. Note: Interest will accrue during a six-month grace period for subsidized loans disbursed after July 1, 2012.

To maintain eligibility for a subsidized loan a student:

• must have financial need (based on your FAFSA results)
• must be enrolled at least half-time
• must meet Satisfactory Academic Progress requirements
• may not exceed the annual or aggregate loan limits

Direct Subsidized Loans Interest rates:

If the first disbursement of your subsidized loan is between July 1, 2010 and June 30, 2011, the interest rate on your loan is fixed at 4.5%. The interest rate on subsidized loans first disbursed to undergraduate students between July 1, 2011 and June 30, 2012 will be fixed at 3.4%.

2. Federal Direct Unsubsidized Stafford Loans - You are not required to demonstrate financial need to receive a Direct Unsubsidized Loan, but must meet specific eligibility requirements. Like subsidized loans, AAU’s Financial Aid Office will determine the amount you can borrow. Interest accrues on an unsubsidized loan from the time it’s first paid out. Interest is charged throughout the life of the loan. You can pay the interest while you are in school and during grace periods and deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principal amount of your loan). If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount. Repayment of unsubsidized loans begins six months after enrollment has ceased or dropped below half-time status.
   

Interest Rate on Direct Unsubsidized Loans

The interest rate on unsubsidized loans is fixed at 6.8% for all borrowers (undergraduate and graduate).

To maintain eligibility for an unsubsidized loan a student:

• must complete a FAFSA
• must be enrolled at least half-time
• must meet Satisfactory Academic Progress requirements
• may not exceed the annual or aggregate loan limits
Unsubsidized Stafford Loans

• Non-need based
• Interest is paid by the student; may be paid during school, or deferred until after
• Must be enrolled at least half-time

Borrower Requirements:

In order to receive federal student loans, you must meet certain requirements. The Department of Education has created a web site (www.studentloans.gov) to manage borrower requirements and provide valuable information regarding federal student loans. The three items listed below are required from all student loan borrowers..

• Entrance Counseling
  To ensure that you understand your rights and responsibilities as a student loan borrower, the Federal Government requires you to participate in loan counseling prior to receiving a Direct Loan, if you have not previously received a Direct Loan, Federal Family Education Loan or Supplemental Loans to Students (SLS) Loan. You must complete entrance counseling before receiving your first Direct Loan disbursement at AAU. Entrance Counseling may be completed at www.studentloans.gov. Your Federal PIN is required in order to complete the Entrance Counseling.
• Sign Master Promissory Note (MPN)
  The Master Promissory Note, commonly referred to as MPN, is a document that must be signed in order to receive a federal student loan.  The signed MPN binds you to the federal government as a promise to repay the student loan you intend to take out to help cover your educational expenses. The MPN provides valuable information about the rights and responsibilities you have as a borrower. You must sign an MPN before receiving your first Direct Loan disbursement at AAU. An MPN may be signed at www.studentloans.gov .
• Exit Counseling
  Prior to graduating, leaving school, or dropping below half time status, Direct Loan borrowers must complete exit counseling. The Direct Loan Exit Counseling will explain your rights and responsibilities as a Direct Loan Borrower. Your Federal PIN is required in order to complete the Exit Counseling because your personal loan information will be provided. Exit Counseling may be completed at www.nslds.ed.gov.

Annual and Aggregate Loan Limits

The following chart provides maximum annual and aggregate (total) loan limits for subsidized and unsubsidized Direct Stafford Loans.

Year	Dependent Undergraduate Student (except students whose parents are unable to obtain PLUS Loans)	Independent Undergraduate Student (and dependent students whose parents are unable to obtain PLUS Loans)	Graduate and Professional Degree Student
First Year	$5,500 - No more than $3,500 of this amount may be in subsidized loans.	$9,500 - No more than $3,500 of this amount may be in subsidized loans.	$20,500 - No more than $8,500 of this amount may be in subsidized loans.
Second Year	$6,500 - No more than $4,500 of this amount may be in subsidized loans.	$10,500 - No more than $4,500 of this amount may be in subsidized loans.
Third and Beyond (each year)	$7,500 - No more than $5,500 of this amount may be in subsidized loans.	$12,500 - No more than $5,500 of this amount may be in subsidized loans.
Maximum Total Debt from Stafford Loans When You Graduate (aggregate loan limits)	$31,000 - No more than $23,000 of this amount may be in subsidized loans.	$57,500 - No more than $23,000 of this amount may be in subsidized loans.	$138,500 - No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes Stafford Loans received for undergraduate study.

Note: These annual loan limit amounts are the maximum yearly amounts you can borrow in both subsidized and unsubsidized loans. You can have one type of loan or a combination of both. Because you can't borrow more than your cost of attendance minus any other financial aid you'll get, you may receive less than the annual maximum amounts. Also, the annual loan limits assume that your program of study is at least a full academic year.

Federal Direct Plus Loans for Parents

Federal Direct PLUS loans enable parents to borrow money to pay the educational expenses of their children. Each child must be a dependent undergraduate student enrolled at least half time in an approved college or university. The primary benefit of PLUS Loans is that it allows parents to borrow federally guaranteed low interest loans to help pay for their child's education. The loans are not based on need, but when combined with other resources cannot exceed the student's cost of education. The interest rate is fixed at 7.9%. Interest is charged from the date of the first disbursement until the loan is paid in full.

 

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