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Federal Student Educational Loans

The U.S. federal government offers several educational loans for students. Hampshire College, through the U.S. Department of Education, offers the subsidized Ford Direct loan and the unsubsidized Ford Direct loan .

Hampshire College also offers a limited number of Perkins loans .

Consolidation loans are available to our students who want to replace their current variable interest rate loan(s) with a fixed interest rate loan.

William D. Ford Federal Direct Student Loans

Hampshire College participates in the William D. Ford Federal Direct Loan Program. Our students do not need to find a bank for a federal student loan. Students obtain their loans through the college rather than through private lenders as under the Federal Stafford Loan Program. We work directly with the federal government to process the loan paperwork on the student’s behalf. The student’s lender is, and will remain, the U.S. Department of Education for as long as the student has the loan. A student may not receive a Federal Stafford Loan while attending Hampshire College.

Federal Direct loans are in the student’s name only. The student borrower is solely responsible for the repayment of the loan. Repayment begins six months after the student leaves school, graduates, or changes enrollment to less than half-time. This one time grace period of six months exists for each loan. Students are responsible to notify the Direct Loan Servicing Center (DLSC) of any name, address, or phone changes. Students in repayment should contact the DLSC if they are experiencing any financial problems which may make them late in making monthly payments.

Total annual Direct loan amounts cannot exceed the following limits for undergraduate students:
$2,625 for a first-year student,
$3,500 for the second-year, and
$5,500 for each subsequent undergraduate year up to a maximum of $23,000.

New loan limits beginning July 1, 2007:
$3500 for a first-year student,
$4500 for a second-year student,
limits for third and fourth year-students remain the same.

The average federal student loan debt for our May 2006 graduates was $14,100.

The interest rate is variable and adjusted annually in July and will never exceed 8.25%. The rate is set to the 91 day Treasury bill rate plus 1.7 percent during in-school, grace, and deferment periods and the 91 day Treasury bill rate plus 2.3 percent during repayment.

NEW INTEREST RATES FOR 2006-2007: Beginning July 1, 2006, interest rates on Federal Direct loans will no longer be variable. Interest rates for Direct loans borrowed on or after July 1, 2006 will be FIXED at 6.8%. Current loans with variable rates will continue to be variable, with rates changing annually on July 1, unless the loan is consolidated into a fixed rate.

There are two types of Direct loans: subsidized and unsubsidized. A Direct loan may have a portion which is subsidized and a portion which is unsubsidized. Students should refer to their recent financial aid award letter for the amount(s) and type(s) of Direct loan received. Students will be notified by the student financial services office of any change in the loan amount or type.

Borrowers will receive a disclosure statement from the Loan Origination Center (LOC) listing the amount borrowed, interest rate, type of loan, and fee & rebate amounts. This document is sent to the borrower’s home address and should be kept for future reference.

More: Tips for borrowing a Federal Direct Loan

Federal Perkins Loans

Perkins Loans are federal loans and the funds are allocated directly to colleges and universities to lend to students. Students with high need are awarded this loan as part of their award packages. The funds are very limited and priority is given to students with high need in their third or fourth year of enrollment. The annual loan limit is $4,000, with an aggregate of $20,000 for undergraduate education. The loan will be credited directly to the student’s Hampshire account each semester after the promissory note is signed. Students apply for this loan by completing the Free Application for Federal Student Aid (FAFSA) .

Repayment of principal and interest is deferred during a grace period of nine months after the student graduates or ceases to be enrolled at least half time, whichever occurs first. The interest rate is 5 percent on the unpaid balance. Previous borrowers continue under the provisions of their first Federal Perkins or National Direct Student Loan.

The repayment period extends up to ten years and depends on the amount of debt, but the minimum repayment is $40 per month. Repayment of principal and interest is deferred while the student is enrolled at least half-time; enrolled and attending a graduate fellowship program; engaged in graduate or postgraduate fellowship supported study (such as Fulbright) outside the U.S.; enrolled in an approved rehabilitation training program for disabled individuals; seeking and unable to find full-time employment; suffering an economic hardship; or engaged in services that qualify for cancelation of the loan. Previous borrowers continue under the deferment provisions of their first Federal Perkins Loan or National Direct Loan as well.

First time Perkins loan borrowers must make an appointment with the Perkins loan coordinator in the business office. The Perkins loan coordinator conducts individual entrance and exit counseling sessions.

There are several cancellation provisions for Perkins loan borrowers.

Any questions regarding Perkins loan repayment, loan cancellations, or deferments should be directed to the college's Perkins loan coordinator, at (413) 559-6086.

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