Sallie Mae 2005 Annual Report Download - page 205

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repayment begins or during any deferral periods. The Higher Education Act provides that the owner of an
eligible Subsidized Stafford Loan has a contractual right against the United States to receive interest
subsidy and special allowance payments. However, receipt of interest subsidy and special allowance
payments is conditioned on compliance with the requirements of the Higher Education Act.
Lenders generally receive interest subsidy and special allowance payments within 45 days to 60 days
after submitting the applicable data for any given calendar quarter to the Department of Education.
However, there can be no assurance that payments will, in fact, be received from the Department within
that period.
If the loan is not held by an eligible lender in accordance with the requirements of the Higher
Education Act and the applicable guarantee agreement, the loan may lose its federal assistance.
Loan Limits. The Higher Education Act generally requires that lenders disburse student loans in at
least two equal disbursements. The Act limits the amount a student can borrow in any academic year. The
following chart shows current and historic loan limits.
Independent Students
Borrower’s Academic Level Base Amount Subsidized
and Unsubsidized On or After 10/1/93
Subsidized
On or After
1/1/87
All Students
Subsidized and
Unsubsidized On
or After 10/1/93
Additional
Unsubsidized
Only On or
After 7/1/94
Maximum Annual
Total Amount
Undergraduate (per year):
1styear .................................. $ 2,625 $ 2,625* $ 4,000 $ 6,625
2ndyear.................................. $ 2,625 $ 3,500* $ 4,000 $ 7,500
3rd year and above ........................ $ 4,000 $ 5,500 $ 5,000** $ 10,500
Graduate (per year) ....................... $ 7,500 $ 8,500 $10,000* $ 18,500
Aggregate Limit:
Undergraduate ........................... $ 17,250 $ 23,000 $ 23,000 $ 46,000
Graduate(includingundergraduate)......... $ 54,750 $ 65,500 $ 73,000 $ 138,500
For the purposes of the table above:
•The loan limits include both FFELP and FDLP loans.
•The amounts in the second column represent the combined maximum loan amount per year for
Subsidized and Unsubsidized Stafford Loans. Accordingly, the maximum amount that a student
may borrow under an Unsubsidized Stafford Loan is the difference between the combined
maximum loan amount and the amount the student received in the form of a Subsidized Stafford
Loan.
* Effective July 1, 2007, first and second year Stafford loan limits increase from $2,625 and $3,500 to
$3,500 and $4,500 respectively, and graduate and professional student unsubsidized Stafford loan
limits increase from $10,000 to $12,000.
** Effective July 1, 2007 the annual unsubsidized Stafford loan limit for students taking coursework
necessary for enrollment in a graduate or professional program is increased from $5,000 to $7,000.
Independent undergraduate students, graduate students and professional students may borrow the
additional amounts shown in the next to last column in the chart above. Dependent undergraduate
students may also receive these additional loan amounts if their parents are unable to provide the family
contribution amount and it is unlikely that they will qualify for a PLUS Loan.
•Students attending certain medical schools are eligible for higher annual and aggregate loan limits.
•The annual loan limits are sometimes reduced when the student is enrolled in a program of less
than one academic year or has less than a full academic year remaining in his program.