Types of Federal Student Aid

Federal Grant Programs | Federal Loan Programs

Federal Grant Programs

Pell Grant
A Federal Pell Grant, unlike a loan, does not have to be repaid. Pell grants are awarded to students who demonstrate financial need and who have not yet earned a bachelor’s or professional degree. The maximum award for the 2009-2010 award year (July 1, 2009 to June 30, 2010) is $5,350. Then the maximum award for the 2010-2011 award year (July 1, 2010 to June 30, 2011) will increase to $5,550. The maximum can change each award year and depends on program funding.

The Pell Grant amount awarded will depend on:

  • Estimated Family Contribution (EFC)
  • Cost of Attendance
  • Enrollment Status

Federal Loan Programs

Federal Direct Loan
Waldorf participates in the William D. Ford Federal Direct Loan Program commonly referred to as Direct Loans (DL). The Direct Loan program provides incentives and services that benefit our students and parents. The Direct Loan program provides stability that students will have continued access to student loans for future use.


There are several benefits to using the Direct Loan Program including:

  • A guaranteed source of funding for student loans;
  • The option of an income- contingent repayment plan or an income-based repayment plan when you enter repayment. This means you will have the option of ensuring that your loan repayment amount will always be affordable based on what your income will allow;
  • Students in the Direct Loan program who enter into public service jobs can have any remaining balance on their loans forgiven after ten years of public service work. (While this option does not exist in the FFEL program, students who borrowed in that program can consolidate their loans into the DL program in order to take advantage of this forgiveness program);
  • Most lenders offer benefits during repayment after a student makes payments from two to four years. Very few students end up receiving those benefits. In DL, students earn benefits after only one year;
  • Should a student make payments late under DL, the late fees charged are less than the late fees charged in the FFEL Program.

Direct Loan Resource Center (StudentLoans.gov)
In order to receive federal student loans, you must complete certain requirements. The Department of Education has created a website, StudentLoans.gov, to manage borrower requirements and provide valuable information regarding federal student loans. The three items listed below are required from all borrowers.

Entrance Interview
To ensure that you understand your rights and responsibilities as a student loan borrower, the Federal Government requires you to participate in loan counseling prior to receiving a Direct Loan, if you have not previously received a Direct Loan, Federal Family Education Loan or Supplemental Loans to Students (SLS) Loan. The three items listed below are required from all borrowers.

  • Sign Master Promissory Note (MPN)
  • The Master Promissory Note, commonly referred to as MPN, is a document that must be signed in order to receive a federal student loan.  The signed MPN binds you to the federal government as a promise to repay the student loan you intend to take out to help cover your educational expenses. The MPN provides valuable information about the rights and responsibilities you have as a borrower.
  • Exit Interview
  • Prior to graduating or leaving school, Direct Loan borrowers must complete exit counseling. The Direct Loan Exit Counseling will explain your rights and responsibilities as a Direct Loan Borrower. Your Federal PIN is required in order to complete the Exit Interview because your personal loan information will be provided.

Federal Stafford Loans
Stafford loans are Federal Student Loans made directly available to college and university students and are used to supplement personal and family resources, scholarships and grants. They may be subsidized by the U.S. Government or may be unsubsidized depending on the student's financial need.

Subsidized Stafford Loans
A Federal Direct Subsidized Stafford Loan is awarded on the basis of the student's financial need and other specific eligibility requirements. The federal government does not charge interest on these loans while borrowers are enrolled at least half-time, during a six-month grace period, or during authorized periods of deferment.

  • Based on need
  • Interest paid by the federal government while you are in school
  • Must be enrolled at least half-time

Unsubsidized Stafford Loans
A Federal Direct Unsubsidized Stafford Loan is not based on the student's financial need, but students must also meet specific eligibility requirements. Interest is charged throughout the life of the loan. The borrower may choose to pay the interest charged on the loan or allow the interest to be capitalized (added to the loan principal).

  • Non-need based
  • Available to independent students only (with the exception of dependent students whose parents have been denied a PLUS Loan)
  • Interest is paid by the student; may be paid during school, or deferred until after
  • Must be enrolled at least half-time

Starting July 1st, 2008 the Subsidized Stafford Loan interest rate is fixed at 6 percent for all loans disbursed after that date. The Unsubsidized Stafford Loan interest rate is fixed at 6.8 percent. The Federal Stafford Loan programs carry both annual and cumulative limits. Your Student Aid Report (SAR) lists your cumulative loans, but it is important to keep records of all of your loan transactions. You can also review your loan history online at: www.nslds.ed.gov.

Annual Stafford Loan Limits – Effective July 1, 2008

Year/Classification Base Amount Additional Unsubsidized Loan Amount Total
Dependent Students
Freshman $3,500 $2,000 $5,500
Sophomore $4,500 $2,000 $6,500
Junior or Senior $5,500 $2,000 $7,500
Independent Students
Freshman $3,500 $6,000 $9,500
Sophomore $4,500 $6,000 $10,500
Junior or Senior $5,500 $7,000 $12,500

Note: It is important to note that even if a student is financing their education on their own, dependency status is still determined by the school.

Parent Loan for Undergraduate Students
Federal PLUS loans enable parents with good credit histories to borrow money to pay the educational expenses of their children. Each child must be a dependent undergraduate student enrolled at least half time in an approved college or university. The primary benefit of PLUS Loans is that it allows parents to borrow federally guaranteed low interest loans to help pay for their child's education. The loans are not based on need, but when combined with other resources cannot exceed the student's cost of education. The interest rate on the Direct PLUS Loan is fixed at 7.9 percent as of July 1, 2006 and deferments apply only to the loan principal, not interest.