Financial Aid

General Requirements for the Federal Stafford Loan

Students applying for a Federal Stafford Loan and parents applying for a Federal PLUS loan must be U.S. citizens or eligible non-citizens. Students must be enrolled at least halftime in a degree seeking program. Students applying for a Stafford loan must complete the Free Application for Federal Student Aid (FAFSA) each year. The FAFSA is not required for a PLUS loan.

Subsidized Federal Stafford Loans

Students that meet certain financial need criteria may qualify for a Subsidized Federal Stafford loan. The federal government pays the interest on the subsidized loan while students are enrolled at least half time, during the six-month grace period, and when they qualify for an authorized deferment.

Unsubsidized Federal Stafford Loans

Students who do not qualify for a Subsidized Stafford loan may be eligible for an Unsubsidized Stafford loan. The federal government does not pay the interest on an unsubsidized loan. Students have the option of paying the interest while they are in school, or they can choose to have the interest added to their principal balance through a process called capitalization.

Federal Stafford annual loan limits

Dependent Students

• Freshman $2,625
• Sophomore $3,500
• Junior/Senior $5,500

Note: Independent students or dependent students whose parent has been denied a PLUS loan may be eligible for additional unsubsidized Stafford loan. Contact the financial aid office for details.

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PLUS loan

If students are dependent on their parents, their parents may qualify for a Federal PLUS loan. The PLUS loan is available without regard to financial need. However, the lender is required to determine whether the parent has a good credit history. The borrower must be the natural or adoptive parent or stepparent of the student. Annual loan maximum is limited to the difference between the full cost of attendance minus all other financial assistance awarded, including federal Perkins loan, federal Stafford loans and federal work study even if these funds are turned down by the student.

DePauw has arranged easy access to PLUS loans through Sallie Mae's online loan website.

Note: For members of the class of 2008, there is an additional loan option: PACE Gold PLUS.

Guarantee and Origination Fees

The Guarantor may charge a guarantee fee of up to 1 percent of the total loan amount. All loans have an origination fee of up to 3 percent. These fees will be deducted from the gross amount of the loan at disbursement.

Interest Rates

Interest rates on the Federal Stafford loan are variable and capped at 8.25 percent. PLUS loan interest rates are variable and capped at 9 percent. The federal government establishes the interest rates on July 1st of each year.

Entrance Counseling

New student borrowers must complete an Entrance Interview before the loan can be disbursed.

Disbursement of the loans

In most cases the funds will be disbursed to the school electronically (EFT) by the lender. Proceeds will be applied to any outstanding educational charges including tuition, fees, and room and board. The financial aid office will notify the borrower when the disbursement is received. If there is a credit balance DePauw University will issue a refund to the borrower. Some disbursements may be made by co-payable check to the borrower and DePauw University. The borrower will be contacted to endorse the check before the student account can be credited. The loan will be paid in two disbursements: the first at the beginning of the loan period and the second halfway through the loan period. Exception: A first-year student must attend classes for thirty days before the loan can be disbursed.

Repayment of the loans

Repayment of a Federal Stafford loan begins six months after the student graduates, leaves school, or drops below half-time enrollment. Parent borrowers are required to begin repaying PLUS loans 60 days after the loan is fully disbursed. In both cases, borrowers generally have 10 years to repay these loans. Borrowers can contact their lender to learn about other repayment options.

How to apply for a FFELP loan

The financial aid office will review the FAFSA and other financial aid information and determine the eligibility for federal loans. The brochure, “How to apply for a loan”, will be enclosed with the award notification. The student must complete and return the Federal Stafford Loan Information Form to the financial aid office to begin the application process. If this is the first time the student has borrowed a Federal Stafford loan, a Master Promissory Note (MPN) will be mailed to the borrower by the lender. The MPN must be completed and returned directly to the lender. Repeat borrowers will not be required to complete a new MPN unless they want to change lenders. The MPN can be used for multiple loans for up to 10 years.

Parents who want to apply for a PLUS loan can access the application and promissory note on-line and choose PLUS Loan Online Application.

Choosing a lender

DePauw University recommends you choose a lender from our Preferred Lender list to expedite the certification, processing and disbursement of education loans.