July 30, 2007

Stafford Loans – back to basics

Posted in FAFSA, Stafford Loans at 2:38 PM by Joe From Boston


It’s “Stafford Season” right now, so to speak – students are filing Master Promissory Notes for Stafford Loans for the upcoming fall semester.  And we’re getting LOTS of calls about Stafford Loans.  So I wanted to clear up a few misconceptions.

1) You MUST file a FAFSA to get a Stafford loan.  It’s that simple – no FAFSA= no money.

2)Your school will award you a Stafford Loan, NOT the company you send the promissory note to.  If your school did not award you a Stafford Loan in the financial aid package they gave you, then you will not get a Stafford Loan.

3)Applying online really means filling out the Master Promissory Note.  The actual application is the FAFSA.  Once you’ve been awarded the loan by your school, you fill out a Master Promissory Note with a loan company that services the loan.   Online forms usually say “apply online” because the average student has no idea what a Master Promissory Note is, and they’re trying to make the process as simple as possible – financial aid is already confusing enough!

There are dozens of companies that service Stafford Loans, so be sure to save all your paperwork and emails so you remember which company you’re dealing with.

This may seem silly, but I work for the Student Loan Network and we get calls every day (lots of them) from people who have no idea what company they’re working with, or who think that we’re Sallie Mae or Direct Loans.

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4 Comments »

  1. Ed,

    For most loans, including a mortgage or car loan, the borrow signs a Master Promissory Note – it’s the piece(s) of paper outlining the details of the loan and says you promise to pay the money back.

  2. Ed said,

    I have absolutely no idea what a Master Promissory Note is but I am far from average. Simplification of the process is a good idea.

  3. […] Original post by moniqueleonard […]

  4. […] Original post by moniqueleonard […]


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