How to apply for a Federal Stafford Loan

The Federal Stafford Loan is the largest and most commonly used student loan program for funding undergraduate education. Stafford Loans are low interest rate loans that the student borrows in his or her own name. Stafford loans are regulated and guaranteed against default by the federal government. There are two types of Federal Stafford Loans:

Federal Subsidized Stafford Loans

Need based
Government pays interest while the student is enrolled
Interest and repayment begins 6 months after graduation, withdrawal, or enrollment falls below half time.
Annual interest rate of 6.8%
Financial aid exit counseling required before graduation
Award maximums (including subsidized and unsubsidized amounts):

$3,500 for freshman year
$4,500 for sophomore year
$5,500 for junior/senior years

Federal Unsubsidized Stafford Loan

Not need based
Must be enrolled at least half time (6 or more credits)
Interest begins accruing when loan is disbursed. Students can pay interest as they go, or let it accumulate as part of the principal amount of the loan.
Repayment begins 6 months after graduation, withdrawal, or enrollment falls below half time.
Annual interest rate of 6.8%
Financial aid exit counseling required before graduation
Award maximums (including subsidized and unsubsidized amounts):

$4,000 for freshman year
$4,000 for sophomore year
$5,000 for junior/senior years

Criteria

In order to apply for and receive a Federal Stafford Student loan at KCAI, you must be able to answer yes to the following statements:

You have been admitted to KCAI for 2008-2009.
You have submitted a Free Application for Federal Student Aid (FAFSA) form, it has been processed (Student Air Report), and KCAI has received the results. KCAI school code: 002473.
Your financial aid application has been reviewed by the KCAI Financial Aid Office and a financial aid award notification has been sent to you for the 2008-2009 academic year.
You are eligible for and have been awarded a Federal Stafford student loan (subsidized or unsubsidized) for the 2008-2009 academic year.

Steps to apply:

Complete online entrance counseling. If you are borrowing a Stafford or Perkins Loan for the first time at KCAI, federal regulations require that you complete an entrance interview counseling session prior to receiving your first loan disbursement. The purpose of the sessions is to outline borrower rights and responsibilities. The information presented is loan-specific; therefore, both a Stafford and a Perkins counseling session must be completed if a student is borrowing from both loan programs.
Complete Stafford Loan data sheet.
Complete and e-sign the Master Promissory Note with your chosen lender - see preferred lender list.

You will need to submit a FAFSA before applying for an Unsubsidized Stafford Loan or PLUS Loan to determine if you have any subsidized eligibility.

KCAI preferred list of Federal Stafford loan lenders

If you plan on borrowing a Federal Stafford Loan and have not previously borrowed from the program, you will need to select a lender. The lender is the institution from which the money is actually borrowed, but the interest rates and terms of the loan are set by the U.S. Department of Education. Therefore the real difference among lenders is measured in terms of customer service, savings programs and repayment options.

Reasons for selecting a particular lender vary from person to person. Some choose a lender based on name recognition. Others prefer the immediate benefit of lower origination fees. For some the deciding factor is the long-term advantage of repayment savings programs, like an interest rate reduction as a reward for making payments on time.

To assist families in this decision, the Office of Financial Aid has compiled a list of institutions we consider excellent in the educational lending field. We have found each of these lenders to provide prompt reconciliation of loan issues. They also provide fast electronic payment of loan funds directly to your university billing account, and offer a variety of savings programs during loan repayment.

How was the lender list developed?

The Financial Aid Office is committed to choosing lenders who provide good service and benefits to our students. We are also committed to choosing lenders who we believe are in the student loan business for the long haul. In November 2007 over 30 lenders were asked to provide information regarding their benefits and services via a Request for Information.

The lender’s responses to the RFI were ranked using criteria developed by the National Association of Student Financial Aid Administrators (NASFAA). The results of these rankings and responses to the RFI were examined by a committee of financial aid administrators and members of the business office. In March 2008 fourteen lenders who submitted an RFI were personally interviewed by the committee mentioned above.

The committee made recommendations to the Executive Vice President for Administration and the Vice President for Enrollment Management taking into account efficient processing, customer service (for parents, students, and administrators) and benefits to the borrower. The final selection was approved by the Executive Vice President for Business and the Vice President for Enrollment Management.

Kansas City Art Institute continues to provide students and their families with a Preferred Lender List despite current concerns regarding such lists because we believe that it is helpful to our students, who often request guidance in the selection of the lender.

The preferred lender list is intended as a guide only. The Financial Aid Office will process a loan from any lender selected by a student. Please check the lenders’ Web sites to confirm Stafford benefits offered as they are subject to change.

Feel free to contact the KCAI financial aid office at financialaid@kcai.edu or 816-802-3337 if you have questions about the process or the lender selection

How to apply for a Federal PLUS Loan

"Plus" stands for "Parent Loan for Undergraduate Students." this is a federal loan for parents of dependent students. Eligibility for this loan is not based on financial need or family income. Parents applying for a PLUS Loan undergo a credit check. The loan amount is approved by the financial aid office.

You do not need to have been offered a PLUS Loan on your award letter in order to apply for a PLUS loan. Completion of the FAFSA is required to be considered for this loan. You must submit an application to the lender if you decide to borrow; this is done by completing a PLUS Loan Master Promissory Note with the lender. Most lenders are now able to provide an instant credit decision if you apply online. Anticipated PLUS loan credits are applied to your university invoice only after your completed loan application has been approved by your lender and certified by the Financial Aid Office.

Parent PLUS Loan

Cost of education minus other financial assistance
Credit-based loan; not based on financial need; parent of dependent undergraduate is borrower; no aggregate loan limits
Repayment: interest and principal payments by parent borrower begin 60 days after disbursement
Must file the FAFSA. KCAI school code: 002473.
Complete the PLUS Loan data sheet.
Current annual interest rate is fixed at 8.5%
Complete and e-sign the Master Promissory Note with your chosen lender - see preferred lender list.

KCAI preferred list of Federal PLUS Loan lenders

You have a choice in selecting a lender for the PLUS Loan. Your family may already have a relationship with a lender and would prefer to borrow with that lending institution. For example, many families use the same lender from which the student borrowed the Stafford Loan. Others prefer to research on their own for the best service and repayment benefits offered. Our office will certify a PLUS Loan with any lender you select. We do offer information on our preferred lender list for those families who would like some assistance in making their choice.

The following is a list of preferred lenders for the PLUS Loan program, which provides a summary of each lender's borrower benefits and a link to their Web site. Our preferred lenders have been selected based on their ability to provide excellent customer service to our students. They also provide fast electronic payment of loan funds directly to your university billing account, and offer a variety of savings programs during loan repayment. Please be aware when reviewing the borrower benefits that you may lose an interest rate reduction due to late or delinquent payments. Ask your lender if they offer the ability to recover the benefit in the event that it is lost.

How was the lender list developed?

Feel free to contact the KCAI financial aid office at financialaid@kcai.edu or 816-802-3337 if you have questions about the process or the lender selection.