Department of Education

Stafford Loans - Department of Education

Loss of Subsidized Loan Eligibility for Graduate and Professional Students 

The Budget Control Act (BCA) of 2011 (Pub. L. 112-25) was signed into law on August 2, 2011. This Act makes two changes to the William D. Ford Direct Loan (Direct Loan) Program.

Effective for loans made for periods of enrollment (loan periods) beginning on or after July 1, 2012, graduate and professional students are no longer eligible to receive Federal Direct Subsidized Loans (the portion of the loan that the interest does not accrue while the student is enrolled at least half-time). The terms and conditions of Direct Subsidized Loans received by any student for loan periods beginning before July 1, 2012, for either graduate or undergraduate study, are not affected by this change. (Please see the chart below for program specific Stafford loan amount eligibility).

Federal Subsidized Stafford Loan: Are only available for those graduate professional students whose enrollment period begins before July 1, 2012.  Programs at Western University with enrollment periods that begin prior to July 1, 2012 are still eligible to receive the subsidized portion of the Federal Direct Stafford Loan for one more year. Subsidized Stafford loans are guaranteed by the federal government. The interest on these loans is subsidized (paid) by the federal government while the student is enrolled at least half-time in school. 

Federal Unsubsidized Stafford Loans: are available to undergraduate and graduate students by participating lending institutions and guaranteed by the federal government. However, the federal government does not pay the interest while the student is in school. The interest rate is fixed at 6.8%.   

Increased Annual Unsubsidized Loan Limits: Western University participated in the Health Education Assistance Loan (HEAL) program before its phase out in 1998.  As a result, the school may award the increased unsubsidized amounts to students who are enrolled full-time in a health professions discipline that was eligible under the HEAL program and is accredited by an approved accrediting agency.  Because the increased annual unsubsidized Stafford Loan limits are intended to replace funds that would have been available previously under the HEAL program, the annual loan limits for the increased unsubsidized amounts are the same as the HEAL program annual loan limits.

• The maximum annual Subsidized (for those that are still eligible for) and Unsubsidized Stafford loan limits as per the Deaprtment of Education per program are as follows for the 2012/2013 academic year:

A borrower who has reached his or her aggregate borrowing limit may not receive additional loans. Once the loans are repaid, in full or in part, the borrower may apply for additional Stafford loans. Outstanding loans include student loans received while the student completed undergraduate and graduate work. In the case of Consolidation loans, the outstanding amounts of any underlying Stafford loans are counted towards the loan limits. The total loan debt a student may have outstanding from all Stafford loans differs depending on their program.

• $138,500 for the MSHS, DPT, MSPA, Maters in PharmD and all Nursing programs, no more than $65,500 of this aggergate amount may be in the form of subsidized loans.

The Perkins loan is a low interest subsidized federal loan for eligible undergraduate and graduate students and subject to availability of funds.  The amounts vary, depending on financial need and federal allocation to our school.  The Perkins undergraduate loan maximum is $20,000.00 and graduate students have a $40,000.00 loan maximum.  The Perkins loan has a fixed interest rate of 5%.

Federal Work Study (FWS)

The FWS program provides funds for part-time jobs which allow students to earn money needed to pay for educational expenses. FWS awards are a form of federal financial aid. In order to be eligible students must have completed a current FAFSA, have remaining “unmet need”, be a permanent or U.S. citizen, be in good academic standing and be enrolled at least half-time. Positions could be available on or off campus. Students are encouraged to find positions that provide work experience in their field of study or provide valuable service to the community.

Loan Cancellation 

You May cancel or reduce the amount of your loan by writing to your school's financial aid office or lender before your lender sends your money to your school.  There are also two ways to cancel all or part of your loan after your loan money is sent to your school. You may contact the school within 14 days of the date the school informs you they have applied your loan to your account or you can pay back all or a part of your loan within 120 days of the date your lender sends your loan money to your school.

Satisfactory Academic Progress (SAP)

Students must be meeting SAP standards as defined by your college to receive finanacial aid.  Please go to the college catalog for your programs SAP policy and procedures.  Western University College Catalog