10.26.09 | Can a Power of Attorney Sign my Stafford MPN?

Posted in FAFSA, Financial Aid, Stafford Loan, Student Loans by Kristin Morris

Power of AttorneyYes, a third party with power of attorney for the borrower may sign a Stafford promissory note if the borrower is unable to sign.

Use of a power of attorney when signing an MPN limits the use of the MPN to
one loan. If the borrower submits his or her MPN through the school, the school must retain a copy of the original power of attorney and submit a copy with the MPN to the loan holder. A photocopy or a fax of the power of attorney is acceptable.

If the note is signed with a power of attorney, the student must authorize the
school in writing to credit the loan funds to his or her account at the school. In addition, the school must pay any remaining balance to the student for living expenses.

10.09.09 | Satisfactory Academic Progress Standards

Posted in Financial Aid, Stafford Loan by Kristin Morris

satisfactory_academic_progressDid you realize that when you withdraw from a class it may hurts your federal aid?  Isn’t that ridiculous?  At least I think so.  As it is you are already out the money for the class, but you may get hit with a double whammy.

I say you “may” get hit because each school handles this differently. While The official eligibility requirement states that students must maintain a “C” average, or standing consistent with graduation requirements, it does not speak specifically to the attempted vs. completed credit hours.

Many schools require that you complete 75% of the credits you attempt (including all transfer credits) in order to be eligible for federal aid.  Make sure you check with your school to confirm what your satisfactory academic progress standards are.

09.15.09 | Federal Loan Bankruptcy Claim – A Student’s Revenge

Posted in Graduate Loans, Stafford Loan, Student Loans by Kristin Morris

Tuesday Observation

I’ve heard from hundreds of malcontent students about the bailout packages the government has been handing out like beads at Mardi Gras this year. It’s not that they disagree with the plans necessarily, but rather, are asking where’s mine? I even blogged about the cash for clunkers plan last month and how those funds would be better served through the Pell grant program. But it appears some crafty scholars could wait no longer to see if the federal government would throw them a life line. They took the bull by the horns and made their own bailout plan.

Whether by keen instinct, dumb luck, or fantastic legal counsel students in financial peril have watched gleefully as their federal loans have been charged off. So how are they doing it? They are filing for bankruptcy. But that in itself is not the bailout of which I speak. The bailout is tied to the fact that these are currently enrolled students. What that means of course is that their debt is not due while they are in school, but bankruptcy courts have been rolling these good standing loans in with all of their other financial discharges.

So basically these students are getting a free education (or partly free) while their lender receives a bankruptcy claim on their non-defaulted student loan. Schools are not too happy about this because it goes against their cohort default rate, but students are skipping in the streets. In addition, because their loans never officially fell into a default status they remain eligible for more student loans in the future.

These students are clever little devils.

08.27.09 | Private Student Loans, Good for All Seasons

Posted in Private Student Loans by Kristin Morris

Imagine having an application for school with NO deadline. What’s that you say? An application like that already exists? Which one? Oh, I didn’t realize a private student loan application could be completed at anytime – even in the middle of the semester.

I think most of us naturally assume that every school related application has a specific financial aid deadline, and for good reason. Most applications do have specified deadlines. I recall when I entered my junior year of school, back in the golden age, that people were telling me to make sure my SAT prep class and test were taken by this date, and that I needed to send out my college application(s) by the end of this particular month, and that I was crazy if I hadn’t completed my FAFSA and scholarship applications by the middle of January of my senior year. By the way, for a complete list of grade by grade college preparation plans from 8th to 12th, visit college action plans. The process of getting into college was completely overwhelming to me.

I had been so used to letting Mom handle things for me and now I was the one in the center of the storm. That’s why it’s good to know there is a floating deadline when it comes to student loans. After the Mom and Dad ATM runs out it’s comforting to have a place to go to get the funds you need.

Lean More About Private Loans

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05.11.09 | Defaulted Student Loan Consequences (1 of 2)

Posted in Financial Aid, Student Loans by Kristin Morris

I’ve fielded many questions from concerned students of late regarding their federal loans and what happens if they default on them.

The questions have ranged from “can they withhold my transcript” to “can they throw me in jail for not paying?” In the first of my two blog series, Defaulted Student Loan Consequences, we shall get to the heart of the matter.

Potential Defaulted Loan Consequences

Your entire loan balance (principle and interest) may be due in full immediately
Your college records may be placed on hold
Your account may be turned over to a collection agency and you’ll have to pay additional charges, late fees and collection costs, all of which become part of your debt
Your federal and state income tax refunds can be withheld and applied to student loan debt. This is called a tax offset
You may not be able to obtain a professional license or get hired by an employer that performs credit checks

Five most recent student loan help blog posts:

02.13.09 | Stafford Loans Are a Must

Posted in Student Loan Links by Kristin Morris

federal_stafford_loanWith tuition costs at record highs, and federal Pell Grants only covering a fraction of the cost, Stafford loans have grown in importance and serve as an essential ingredient for today’s students looking to fund their college education.

Since the late 70′s, tuition and fees at private four-year colleges have increased nearly tenfold. And while those fees have far outpaced inflation the same can not be said for the federal Pell Grant. The Pell Grant was created in 1976 to help aid lower-income students with the cost of higher education, but those funds don’t go nearly as far today as they once did.

When the Pell Grant program was first launched it covered about 70% of the cost of attendance at a typical four-year institution. Today the Pell Grant covers a mere 30% on average. One notable way students help bridge the widening gap between tuition costs and Pell Grant funds (for those who are eligible) is with the federal Stafford loan.

Stafford loans are federally backed and available to students attending Title IV certified schools. The loans, however, do hold yearly maximum allotments. The maximum allotments are determined by your year in school as well as your status (dependent or independent). Unlike Pell Grants, Stafford loans must be repaid after you graduate, and generally hold a 10-year repayment term. In addition, Stafford loans are divided into two categories, subsidized and unsubsidized.

Subsidized Stafford loans are awarded based on financial need. You will not be charged interest before you begin repayment or during periods of deferment. The federal government “subsidizes” (or pays) the interest during these times. No payments are expected on the loan while you are enrolled as a full or half time student.

Unsubsidized Stafford loans are not awarded based on financial need. Any eligible student can take out Unsubsidized Stafford Loans. You will be charged interest from the time the loan is disbursed, to the time the loan is repaid in full. No payments are expected on the loan while you are enrolled as a full or half time student.

For the upcoming 2009-2010 academic year the interest rate for subsidized Stafford loans, for undergraduate students, is fixed at 5.6%. If you fall into the unsubsidized category you will be extended a 6.8% fixed interest rate. To determine your eligibility and see if you qualify for a subsidized or unsubsidized Stafford loan you must first complete a FAFSA.

FAFSA stands for free application for federal student aid, and is available to all U.S. citizens, U.S. nationals, and U.S. permanent residents who have an I-151, I-551, or I-551C (permanent resident card). The FAFSA is your key to any federal loan or Pell Grant.

It’s true that tuition costs are out of control, but don’t focus on that. Set your sites on matters you can control, like getting the financial aid you need for school. You have the financial aid tools, now it’s time to put them to good use.

Apply for a Stafford Loan Now


Five most recent Stafford loan help blog posts:


08.11.08 | Watch out for Stafford Loan Fee’s!

Posted in FAFSA, Stafford Loan, Student Loan Links by Kristin Morris

I have a question for you. Have you ever stopped to consider what fees are associated with your Stafford loan undergraduate application? If you have than you are in the minority. Most students generally have trouble just navigating the student loan process on the whole; fee’s become an afterthought.

The simple fact is many lenders charge fees ranging from 1-2%. Fee’s are about the only thing these days which delineate one lender from another. The interest rates are fixed and can not be negotiated, but fee’s can fluctuate.

Here at staffordloan.com we work with Discover Student Loans on undergraduate Stafford loans and are happy to inform you that we waive the fees for you! There are zero fees! The application process is quick and easy. Just make sure to complete your FAFSA first!

To apply now (click here).

06.30.08 | Stafford loan reminder: File your FAFSA

Posted in FAFSA, Student Loan Links by Kristin Morris

Just a reminder for folks who have waited a little longer before applying for federal financial aid – the FAFSA is a required form that must be completed and filed prior to receiving any federal financial aid, including the Stafford loan. If you haven’t filed your FAFSA, pretty much your only option is a private student loan, which typically has fewer advantages than federal student loans.

Filing your FAFSA takes a relatively short amount of time for the benefits it delivers – file today if you haven’t already done so.

09.19.07 | You've Signed a Stafford Promissory Note….Now What?

Posted in Student Loan Links by Kristin Morris
Applying for a Stafford Loan can be a daunting task….but it does not have to be. Here is a quick break down of how the process works once you fill out the Stafford Loan Promissory Note (MPN). See the steps below.
Let’s assume you opt for an online signature:

A. You fill out your personal information on staffordloan.com.

  • Tip 1: Be sure that both of your references do not have the same address as each other. This will cause a delay.
  • Tip 2 : Be sure you put the correct school and campus. If your school is not listed, call them to see where you should get the MPN.

B. Check your email for the link to your electronic MPN. Click the link and follow the instructions on how to “docusign”.

C. Approximately 36 hours from your signature – a school certification form will be sent to your school’s Financial Aid Office.

  • Tip 3: Follow up with your school to make sure they fill that form out and return it…or else your loan will not be completed…if you are not sure if your school will certify the loan just double check on your financial aid award letter to see if you were in fact eligible to borrow a Stafford loan.

D. Remember that Promissory Notes are good for up to 10 years, but typically you have to “accept” the loan every year. Do not assume that because you filled this out freshman year, it will automatically renew. Stay on top of it before every school year. If you need information about other ways to pay for school visit any one of the sites below.

Private Student Loans
ACT Loan
Scholarships