How do I apply for a new loan?

Apply for a New Stafford Loan
New Stafford loans are awarded by the financial aid office. The award amounts are based on the results of the Free Application for Federal Student Aid (FAFSA) and the cost of attendance at the school. The first step in the process is to fill out the Free Application for Federal Student Aid, or FAFSA. You can do this online at www.fafsa.ed.gov or at the financial aid office for your school. Be sure to list all the schools you wish to attend on the FAFSA so that those schools will receive your FAFSA results. Schools receive the Institutional Student Information Record, or ISIR, which contains your FAFSA results and tells the school how much aid you are eligible for. You will receive a similar report called the Student Aid Report, or SAR.

The school uses the ISIR to create an award letter for you. You may accept any or all of the awards offered in this letter, including grants, scholarships and loans. You can also accept a reduced amount of these awards if you don’t need all the money offered.

To borrow a Stafford loan, tell the financial aid office which lender you want to use and the school will contact the lender to set up the loan disbursement. You can use any student loan lender you want, but many schools will provide you with a list of preferred lenders. This list will include at least three lenders that the school chose based on previous positive experiences with those lenders. Your school must disclose to you the criteria used to select the lenders that are on their list. You can work from this list, or you can do some research on your own and find a lender that suits you.

You will need to sign a Master Promissory Note, or MPN, with your lender before your loan can be disbursed to the school. Read this document carefully and make sure you understand the terms before you sign! By signing it, you are promising to repay the money you receive. You may also have to complete entrance counseling through your school along with any other school-specific requirements in order to have the funds sent to the school.

Apply for a New PLUS Loan
A parent who wants to borrow a PLUS loan should first get pre-approved by his or her lender. You can apply for pre-approval on Edfinancial’s website, or by calling us at 1-800-337-6884.

Once you apply, you will either be approved or denied. If you are approved, you will receive an approval letter by mail, as well as an application to sign and return. If you are denied, you will receive a denial letter by mail. Hang on to this letter, because when a parent is denied for a PLUS loan, the student becomes eligible for more Stafford loans. The student should contact his or her school to take advantage of the additional Stafford loans.