Sallie Mae 2006 Annual Report Download - page 210

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.
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
Independent Students
Undergraduate (per year):
1st year ............................. $ 2,625 $ 2,625
*
$ 4,000 $ 6,625
2nd year ............................ $ 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 (including undergraduate) ........ $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 gradu-
ate 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.
Repayment. Repayment of a Stafford Loan begins 6 months after the student ceases to be enrolled at
least half time. In general, each loan must be scheduled for repayment over a period of not more than 10 years
after repayment begins. New borrowers on or after October 7, 1998 who accumulate outstanding loans under
the FFELP totaling more than $30,000 are entitled to extend repayment for up to 25 years, subject to
minimum repayment amounts and FFELP Consolidation Loan borrowers may be scheduled for repayment up
to 30 years depending on the borrower’s indebtedness. The Higher Education Act currently requires minimum
annual payments of $600, unless the borrower and the lender agree to lower payments, except that negative
amortization is not allowed. The Act and related regulations require lenders to offer the choice of a standard,
A-7