Federal Financial Aid Information

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Student Loan Information

Gratz College participates in the William D. Ford Federal Direct Loan Program. Students borrow directly from the federal government. Separate applications from banks or other lenders are NOT REQUIRED to receive Direct Stafford Loans.


Federal Direct Stafford Loans are for undergraduate, graduate and professional degree students, enrolled at least half-time, who meet the general requirements to receive federal aid.

There are two types of Stafford Loans: subsidized and unsubsidized. The subsidized loan is need-based. (Financial need is determined by the difference between the Cost of Attendance and your Expected Family Contribution.) Students borrowing the subsidized loan do not pay interest on the loan while they are enrolled at least half-time. The U.S. Department of Education pays interest while the borrower is in school and during grace and deferment periods.

Unsubsidized loans are non-need-based. Students are not required to demonstrate financial need to borrow an unsubsidized loan. Students borrowing unsubsidized loans must pay interest while they are enrolled in school.

Applying for a Federal Direct Loan

When students complete the Free Application for Federal Student Aid or the Renewal Free Application for Federal Student Aid, they are applying for all of the aid programs for which they may be eligible, including direct loans.

If a William D. Ford Federal Direct Stafford Loan (subsidized or unsubsidized) has been offered as part of a student’s aid package it will appear on their Financial Aid Award Letter. They can accept or decline these loans just as they would any other aid program assistance offered to them. Additionally, if a student is  accepting all or part of their loan, they are required to complete and sign a Master Promissory Note and inform the financial aid office of the amount that they wish to borrow.

General Requirements

To qualify for a federal direct loan, students must fulfill certain conditions. These include, but may not be limited to:

  • Completion of a Loan Entrance Interview: An entrance interview is a counseling session designed to help students better understand their obligation as a borrower, and also provides useful information regarding the loan process. Entrance interviews are required for all first-time borrowers.
  • Signing the Master Promissory Note (MPN):  Direct Stafford Loan borrowers must complete an MPN at https://studentloans.gov using their federal PIN number. The same PIN used for the online FAFSA is used to sign the MPN. To obtain a federal PIN, visit www.pin.ed.gov.

Using Your Loan to Pay Your Term Bill

Each semester, the Federal Direct Student Loan will be posted to the students billing account after the drop/add period for courses in which they are enrolled.

Refund Checks

If financial aid, including student loan, exceeds charges for the term, students will be issued the difference in the form of a refund check.

Refunds are generally mailed within 10 days after the Federal Direct Loans are posted to their billing account.

Federal Direct Student Loan Limits

The chart below lists the maximum annual subsidized and unsubsidized combined amounts a student may borrow in the federal Stafford loan program.

The amounts shown include the increase to the unsubsidized loans authorized by Congress. The annual maximum amount may be awarded to you as a combination of subsidized and unsubsidized William D. Ford Federal Direct Stafford Loan. Students must pay the interest on the portion that is unsubsidized while in school, and during any grace or in-school deferment periods, unless they elect to have the interest added to the principal. This is called capitalization. Having the interest capitalized will mean larger payments when they begin repayment.

Financial Aid Chart

Loan Repayment

Gratz College wants students to understand that they must repay loans. All students are required to participate in exit counseling after they graduate, drop to less than half time status, or cease enrollment. Exit counseling sessions can be completed at www.mappingyourfuture.com.

Students, who borrow a Federal Direct Student Loan and have borrowed a Federal Stafford Loan in the past, can have their loans consolidated so that they will be making only one payment. Loan consolidation will be made at the request of the student when entering repayment. The financial aid office will provide more information to you regarding this option as you approach graduation.

Loan repayment begins six months after you leave school or cease to be enrolled an at least a half-time basis. These six months are referred to as a grace period.

  • The federal government offers various loan repayment options listed below.
  • The standard loan repayment plan requires fixed monthly repayment amount paid over a fixed period of time.
  • The extended repayment plan assumes a fixed annual repayment amount paid over an extended period of time.
  • The graduated repayment plan establishes annual repayment amounts at two or more levels. Repayments are paid over a fixed or extended period of time.
  • The income contingent repayment plan calls for varying annual repayment amounts based on the Adjusted Gross Income (AGI) of the borrower over an extended period of time, as determined by the U.S. Department of Education. There is a .25% point interest rate deduction for borrowers paying off loans electronically.

While students are enrolled in school, no payments are due on their subsidized Federal Direct Student Loan, and no interest accrues (unless they are repaying a previous loan and are enrolled less than full time). The Federal Government pays the interest for the student during this time.

The grace period for the unsubsidized Federal Direct Student Loan is the same as the subsidized, but students are responsible for the interest on the loan while in the grace period. Repayment on the Federal Direct PLUS Loan begins shortly after the loan is fully disbursed.

State Programs

Pennsylvania State Grant Program- (Undergraduate students only)

Available for full- and at least half-time students from Pennsylvania who are U.S. citizens or eligible non-citizens and a graduate of an approved high school or a recipient of a Commonwealth Secondary School Diploma. Grants may be awarded based on the financial needs of the student's family. The application deadline is May 1st. For more information, call the Pennsylvania Higher Education Assistance Agency (PHEAA) at 1-800-692-7435.