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The Federal Stafford Loan program can be a valuable resource to help
you achieve your educational goals. You may choose any lender you wish. Lenders
may offer different benefits and rates. Be sure to compare the fees and terms
of all student loan products to determine which are best suited to your needs.
We encourage you to explore all your options. When you decide on a lender,
visit the lender's web site to complete and submit a Federal Stafford Loan
Master Promissory Note (MPN). We will process your loan application as soon as
we receive word from your lender that your MPN has been completed.
If you are considering a GradPLUS loan, please talk with the Financial Aid
Counselor at your School. You should exhaust ALL Federal Stafford loan
eligibility before applying for a GradPLUS loan. The
Federal Loan Comparison Chart for Graduate and Professional Students outlines
the differences between these two loans.
You must complete Stafford Loan Entrance Counseling prior to receiving your loan disbursement.
On-line entrance counseling can be completed through Mapping Your Future. It is both a federal
and a University requirement, and must be successfully completed by you before you can receive
the proceeds of your Federal Stafford Student Loan. Graduate students can use the "Stafford
and GradPLUS Combined Entrance Counseling" option if they are going to take out both loans.
School as Lender Option
In 2002, Washington University began participating in a
federally-authorized program called the "School as Lender" program for graduate
and professional students. The University participates in the School as Lender
program because we are able to provide competitive Federal Stafford Loan
borrower benefits and need-based aid for Washington University students.
The University works in conjunction with a servicing partner. This partner
typically purchases Federal Stafford loans from the University annually. Any
surplus generated from this sale and the federal subsidy earned while the
University holds the loans is used to pay the student’s loan origination fees
and provide scholarships for Washington University students demonstrating
financial need.
HEA regulations require that School as Lenders adhere to the following:
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Award contracts related to the School as Lender program on a competitive basis
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Offer a reduced origination fee or interest rate below statutory levels
(Washington University pays the entire origination fee on behalf of the
borrower)
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Perform a compliance audit each year
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Use any proceeds earned from the program (with the exception of administrative
expenses) towards providing need-based aid
The University conducted a formal evaluation of servicing partners in March of
2007. The criteria used to evaluate servicing partners, in order of importance,
were:
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Competitive Loan Products
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Loan Repayment Benefits
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Payment of Origination Fees
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Loan Forgiveness Programs
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Customer Service
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Life of Loan Servicing
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Code of Conduct Policy
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Call Center Availability / Staffing
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On-line Services for Students
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Default Prevention
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Cohort Default Rate
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Financial Literacy Programs for Students
The University selected the Missouri Higher Education Loan Authority (MOHELA)
due to its competitive benefits and excellent customer service under a one-year
agreement.
The difference between the School as Lender program and programs of other
lenders is that any surplus generated by the School as Lender program is used
to pay down students’ origination fees and provide need-based aid to Washington
University students. Other lenders are not required to waive origination fees
or provide need-based aid to students.
The University’s School as Lender program is one option students may consider
when choosing a lender.
In an effort to assist students and families with lender choices for Federal
Stafford loans, the University has compiled, through a formal evaluation
process, a list of lenders we consider to offer competitive products, solid
customer service, electronic payment of loan funds and a variety of savings
programs during loan repayment. The same criteria outlined above were
used to evaluate these lenders.
Please note that you are not required to use any of these lenders — the choice
of lender is yours. We will process your loan with any lender you choose.
Further, the list of lenders is not in any order of preference.
There have been many changes in the student loan industry. As a student
loan borrower, you need to understand what you need to do in order to
prepare for the 2008-2009 academic year.
There are two contributing factors to the changes we are seeing. One factor is
the passage of the College Cost Reduction and Access Act (CCRA) on October 1, 2007.
The CCRA increased the fees that lenders pay to participate in the Federal Family
Education Loan Program (FFELP) and reduced the subsidies lenders receive for
participating in the FFEL program. The second factor is the current “credit crunch”
in the financial markets caused by the sub-prime mortgage lending issue. Overall,
lending institutions are experiencing higher costs for funds used to provide loans
of all types – including Federal Stafford and Grad PLUS loans.
Recently, the Department of Education announced a plan to help lenders
get the funding they need to provide students with Federal loans for the upcoming academic
year. However, lenders who utilize this option have had to change their repayment benefits.
As a result of so many changes being made to borrower benefits
offered by each lender, we believe it is in your best interest to carefully evaluate your
borrower relationship with a Stafford Loan lender of your choice.
We are asking all students who plan to enroll in classes during the upcoming
academic year to take the following steps:
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Do some research. Find out what lenders are
providing. You may refer to the Repayment Benefits Chart to see what benefits the
lenders on our list are offering.As always, you are welcome to use any lender you
choose even if they do not appear on the lender chart.
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Contact your lender to inquire about the current
benefits they are offering. You can find your Stafford lender
information at
https://www.nslds.ed.gov/nslds_SA/. You will be required to establish an ID and PIN,
but this helpful resource tracks the status of all Federal loans from loan
origination through repayment.
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Choose a lender for your 2008-2009 Federal Stafford Loan
. Familiarize yourself with the lender’s Web site, and prepare to complete the
necessary requirements to apply for your student loan online.
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Take Action by doing one of the following:
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If you received a Federal Stafford Loan last
year with Washington University as the lender AND want to continue to borrow
through this program, you will need to complete a new Federal Stafford Loan
Master Promissory Note (MPN) for 2008-2009 due to a change in servicing agencies.
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If you decide to change lenders, go to the lender’s website and complete a new
MPN with that lender.
These lenders provided
assurance to the University and to student and parent borrowers that the
advertised benefits upon repayment will continue to inure to the benefit of the
student and parent borrowers regardless of whether the lender's loans are sold.
Note: Clicking on these links will take you from the Washington University web
site and redirect you to the lender's web site.
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