Frequently Asked Questions
What types of federal student loans are available?
What are Subsidized Federal Stafford Loans?
What are Unsubsidized Federal Stafford Loans?
What are Federal PLUS Loans?
How do I apply for a student loan?
What happens after I submit the FAFSA?
What do I need to do to get a student loan once my eligibility is determined?
Who is involved in the student loan process?
What is the interest rate on my student loans?
What is capitalization?
When do I begin making payments on my student loan(s)?
What is a deferment?
What is forbearance?
What is consolidation?
What is OGSLP and how is different than my loan holder (lender/servicer)?
Why am I receiving correspondence about my student loan(s) from different
organizations?
What is the difference between delinquency and default?
Where are my loans?
Where do I mail in my Master Promissory Note (MPN)?
What is the FAFSA?
How can I get a FAFSA?
What fees do you charge as a guaranty agency?
What type of expenses can I use with my student loan money?
Who can answer my student loan questions?
Q. What types of federal student loans are available?
A. The Federal Family Education Loan Program (FFELP) offers three types of
federal loans: Subsidized Federal Stafford, Unsubsidized Federal Stafford
and Federal PLUS
Q. What are Subsidized Federal Stafford Loans?
A. Loans that are available to students with demonstrated need. The amount
that can be borrowed is based on the student’s class level, the school’s
cost of attendance, and other financial aid the student may receive. Interest
is paid by the federal government while the student is attending school,
during the six-month grace period following graduation or following a change
in enrollment status, and during specified loan deferment periods.
Q. What are Unsubsidized Federal Stafford Loans?
A. Loans that are available to students regardless of demonstrated need. The
amount that can be borrowed is based on student’s class level, the
school’s cost of attendance, and other financial aid the student may
receive. Borrowers are responsible for all interest accrued on unsubsidized
loans from the date the loan is disbursed, including the time that the student
attends school and also during grace periods and any type of loan deferment.
Q. What are Federal PLUS Loans?
A. Loans that are low-interest loans made to parents of undergraduate dependent students and to graduate or professional students. Federal PLUS loans are not based on financial
need. The amount that can be borrowed is based on the school’s cost
of attendance and any other financial aid that the student may receive. A
Federal PLUS loan’s repayment period begins within 60 days of the final
disbursement of the loan, and the borrower is responsible for all interest
that accrues.
Q. How do I apply for a student loan?
A. To apply for a student loan, as well as to find out if you are eligible
for federal grants and work-study, you must complete a Free Application for
Federal Student Aid (FAFSA). You can complete the application at www.fafsa.ed.gov.
A form can also be obtained from your high school counselor, or from the
college or career school you plan to attend, or by calling 800.4FED.AID.
Q. What happens after I submit the FAFSA?
A. After you complete and return the FAFSA to the U.S. Department of Education,
you will receive a Student Aid Report (SAR). At that time, you must review
the SAR to ensure that all information submitted is correct. The information
from the SAR will then be sent electronically to the school(s) listed on
your FAFSA application. After all application materials are complete, the
financial aid office will notify you of your eligibility for federal student
aid, including any loan eligibility.
Q. What do I need to do to get a student loan once my eligibility is determined?
A. If you are eligible for a Federal Stafford loan (subsidized or unsubsidized),
you will be provided with a Master Promissory Note (MPN), which is a legal
agreement of repayment that you sign with a lender. After your loan has been
approved, the lender will send the loan funds to your school. You may be
eligible to receive multiple loans under one promissory note for a maximum
ten-year period. However, a school might require that you complete a note
annually.
Q. Who is involved in the student loan process?
A. The following are the “players” in the student loan process:
Q. What is the interest rate on my student loans?
A. Interest rates on federal student loans can either have a fixed interest rate or a variable interest rate. New loans first disbursed on or after July 1, 2006, will have a fixed interest rate. Loans disbursed prior to July 1, 2006, will have a variable rate that will change every July 1 and
will not exceed 8.25 percent for Federal Stafford loans or 9.00 percent for
Federal PLUS loans. Your loan holder will notify you of interest rate changes
throughout the life of your loan.
Q. What is capitalization?
A. The process of adding unpaid interest to the principal balance of an education
loan, increasing both the total amount to be repaid and the monthly payment.
Q. When do I begin making payments on my student loan(s)?
A. You will enter a grace period for typically six months after you leave school
or drop below half-time enrollment before you begin making monthly payments.
You will receive a repayment schedule from your loan holder.
Q. What is a deferment?
A. An authorized period of time during which a borrower may postpone either
principal payments or principal and interest payments. The federal government
makes interest payments on subsidized Federal Stafford during authorized
deferment periods.
Q. What is forbearance?
A. An authorized period of time during which the loan holder agrees to temporarily
postpone or reduce a borrower’s payment if a borrower intends to repay
his or her loan but is having temporary financial difficulties. Borrowers
are still responsible for the interest during this period.
Q. What is consolidation?
A. A loan program that allows borrowers to combine all of their federal education
loans into a single loan. The program allows borrowers to make a single monthly
payment and extend the repayment period (up to 30 years depending on the
loan amount).
Q. What is OGSLP and how is different than my loan holder (lender/servicer)?
A. The Oklahoma Guaranteed Student Loan Program (OGSLP) is the guarantor of
your student loan(s).Your loan holder accepts your monthly payment and processes
deferment and forbearance requests.
Q. Why am I receiving correspondence about my student loan(s) from different
organizations? I only borrowed through one lender (loan holder).
A. Your lender provides the student loan money to be borrowed. Sometimes a
lender will employ a servicer to administer a student loan account. Often the
borrower deals with the loan servicer when there are questions about repayment.
Servicers also approve deferments and forbearances on the lender's behalf.
Additionally, some lenders will sell student loans to secondary markets. Secondary
markets purchase student loans from originating lenders so that they can make
additional student loans. Selling loans is a common practice among lenders
and does not affect the terms and conditions under which the loan was originally
made.
Q. What is the difference between delinquency and default?
A. A delinquency is when your loan payment with your loan holder is past due
or late. A default is when your loan reaches 270 plus days delinquent at
your loan holder and your guarantor purchased your loan as a default.
Q. Where are my loans?
A. Call OGSLP’s Customer Service department at 800.442.8642 or you can
also visit the National Student Loan Data System (NSLDS) at www.nslds.ed.gov and view a summary of your student loans.
Q. Where do I mail in my Master Promissory Note (MPN)?
A. It depends on the processing options established by your school. Contact
your school’s financial aid office to determine if you need to return
it to your lender, school or guarantor.
Q. What is the FAFSA?
A. It is an acronym for Free Application for Federal Student Aid. The
FAFSA is a federal form that you must complete when applying for federal
aid. The FAFSA is used to determine your family’s financial strength
and your eligibility for federal student financial aid including grants,
work-study and student loans.
Q. How can I get a FAFSA?
A. You can complete the application online at: www.fafsa.ed.gov or
you can obtain a copy from your high school counselor, from the college or
career school you plan to attend or by calling 800.4FED.AID.
Q. What fees do you charge as a guaranty agency?
A. The lender subtracts 3 percent from your loan’s principal balance
for origination and default fees. The Department of Education receives 2
percent, and the guarantor (Oklahoma Guaranteed Student Loan Program-guarantor for Oklahoma) receives the remaining 1 percent. These fees help cover the costs of the loan program.
Q. What type of expenses can I use with my student loan money?
A. You must use the loan money for authorized educational expenses for attendance
at the school that certified your eligibility. Authorized expenses include
the following: tuition, room, board, institutional fees, books, supplies,
equipment, dependent child care, transportation, commuting expenses, rental
or purchase of a personal computer, origination fee and guarantee fee, and/or
other documented, authorized costs.
Q. Who can answer my student loan questions?
A. Our Customer Service department can answer a variety of questions regarding
student loans. In addition to providing information on how to apply for a
student loan, staff can assist you with the completion of the Master Promissory
Note (MPN) as well as provide information on eligibility, loan maximums,
deferments and forbearances. Contact us at 800.442.8642, in Oklahoma City
at 405.234.4340.