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Montana’s Choice Stafford Loans Terms and Conditions

Direct Payment (ACH)

If ACH is rejected by the borrower's bank more than once within the life of the loan, the interest rate reduction is discontinued. The borrower may continue to use ACH, however.

On Time

On time is defined as no more than 30 days delinquent.

Late Fees

If a payment is delinquent, a late fee of 5% of the payment amount will be charged on loans disbursed on or after July 1, 2008

Eligibility

You must be a U.S. citizen or permanent resident and be enrolled full or half time as an undergraduate or graduate student in an accredited school.

Loan Limits

Dependent Undergraduate Student
1st year $5,500
2nd year $6,500
3rd year $7,500
4th year $7,500
Independent Undergraduate Student
1st year $9,500 (maximum of $3,500 subsidized)
2nd year $10,500 (maximum of $4,500 subsidized)
3rd year $12,500 (maximum of $5,500 subsidized)
4th year $12,500 (maximum of $5,500 subsidized)
Graduate and Professional Student

$20,500 for each year of study (maximum of $8,500 subsidized)

Interest Rate

For loans disbursed on or after July 1, 2008: Fixed 6%.

Subsidized interest is paid by the federal government prior to entering repayment (during in-school, grace or deferment periods). Unsubsidized interest is paid by the borrower throughout the entire life of the loan. Interest accrued while in a period of non-payment, will be capitalized (added to the principal balance of the loan).

Fees

Origination fee: 1%
Default fee: 1%

Repayment Terms

Loan(s) may be repaid over a maximum of 10 years. Repayment begins six months (grace period) after the borrower graduates, leaves school or drops to less than half-time status.

FFEL Loan Interest Rates Effective July 1, 2008

Loans First Disbursed on or After July 1, 2006
Loan Type Grade Level FFEL
7/1/2006 to 7/1/2008 7/1/2008 to 7/1/2009
Subsidized Loans Undergraduate 6.80 6.00
Graduate 6.80 6.80
Unsubsidized Loans Undergraduate 6.80 6.80
Graduate 6.80 6.80
PLUS Loans All 8.50 8.50

 

Variable Rates for Loans First Disbursed Between July 1, 1998 and June 30, 2006
These rates were calculated based upon statutory formulas and equal the bond equivalent rate of the 91-day Treasury bills auctioned on May 27, 2008, plus certain statutory percentage add-ons. The 91-day Treasury bills were auctioned at 1.905 percent, rounded to 1.91 percent.

Loan Type Status FFEL
7/1/2006 to 7/1/2008 7/1/2008 to 7/1/2009
Subsidized Loans Repayment or Forbearance 7.22 4.21
In-school, Grace, or Deferment 6.62 3.61
Unsubsidized Loans Repayment or Forbearance 7.22 4.21
In-school, Grace, or Deferment 6.62 3.61
PLUS Loans All 8.02 5.01

New loan programs listed above are subject to change without notice, based on regulatory changes to the Federal Higher Education Act and/or upon financial market volatility impacting the earnings of lenders in the Montana's Choice program.

Benefits granted on loans already disbursed are paid out of excess funds from financed bonds and are subject to change or elimination at any time based upon the availability of such funds. Benefits are payable as long as the loans are owned by MHESAC or a participating Montana's Choice lender.