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Student Financial Assistance

FAQs About Financial Aid Loans

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How do I apply for a student loan?
Most students these days find that they need to get some type of loan to help finance their education. Federal Stafford loans are the best place to start, because they are the least expensive. The student loan program is a government, private industry, educational partnership.

First, you must complete the FAFSA (Free Application for Federal Student Aid) to determine your eligibility for a student loan. In about three to four weeks the school will receive information from the federal processing center which will determine what type of loan you will be able to receive. (Subsidized, Unsubsidized or both). At this point you should have received a letter from the financial aid office to let you know what other documentation will be needed to process your request for a loan. Once all the required documentation is received and verified, you will be sent an award letter to accept your loan. At this point you can cancel your loan or reduce the amount listed on the award letter and return this to the financial aid office.

All first time borrowers or students must complete an Entrance Counseling and Master Promissory Note (MPN) online at

What is a Stafford Loan?
A Stafford loan is variable interest rate loan made to students based on financial need. There are two kinds of Stafford Loans: Subsidized and Unsubsidized. With a Subsidized Stafford loan, you are not responsible for the interest charged on the loan as long as you are in school as an at least half-time student. Instead, the government pays the interest for you while you are in school. Students receiving Unsubsidized Stafford loans are responsible for the interest charged on the loan while in school (the rate varies annually based on the prior year average T-Bill rates but will never exceed 8.25%). A student can choose to either pay the interest or capitalize it.

Capitalization occurs on a periodic basis and compounds over time – meaning interest charged on the principal is added to the principal, and then interest is charged on the principal plus interest and so on. Beware; capitalized interest can be a very costly! It’s best to pay the interest if you can. Repayment of either type does not begin until six months after the student graduates or stops attending on an at least a half time basis (6 undergraduate hours or 4.5 graduate hours). It is recommended that students make an effort to pay down the interest on an annual basis.

What is a Federal PLUS Loan?
Federal PLUS Loans allow parents to borrow for each dependent undergraduate student who is enrolled in college at least half time. Graduate or professional students are also eligible to borrow PLUS loans. The loan limit is the full cost of the student’s education each academic year, less grants and other financial aid the student receives. Any PLUS Loan applicant determined to have an adverse credit history is required to have an endorser who is obligated to pay the loan if the borrower does not. PLUS borrowers of loans first disbursed on or after July 1, 2008, have the option to start making payments within 60 days after full disbursement of funds or wait until 6 months after the student’s enrollment at least half time ends.
Are alternative loans guaranteed by the federal government?
No. Alternative loans are private loans issued by private lenders. Third party organizations may guarantee these loans, but the federal government has no involvement. The responsibility lies with you. However, the financial aid office is required to consider this as financial aid and students may not borrow in excess of their COA (cost of education).Western Kentucky University will expect you to submit the FAFSA and be considered for federal loans before applying for private loans.
How much money can I borrow?
The amount of loan you can borrow is determined by your classification (freshman, sophomore, etc.) Freshmen are eligible for $3,500 for the academic year, sophomores are eligible for $4,500 for the academic year, and juniors and seniors are eligible for $5,500 for the academic year. The loan is split between fall and spring. If this loan amount is not sufficient, your parent(s) may apply for a Parent Plus loan. Aggregate limits will also be taken into consideration.
How many hours do I have to be enrolled in to qualify for a Stafford Loan?
Undergraduate students must be enrolled in at least 6 undergraduate hours (400 level or below classes) and graduate must be enrolled in at least 4.5 Graduate hours (500 level or above classes) to be eligible for Stafford Loans. Enrollment will be verified at the end of the first week of classes.
Do I need good credit to get a Stafford loan? Are credit checks done to get one?
No. Eligibility for Stafford loans is not dependent on your credit history.
Can I use student loan money for other expenses such as a computer, books, or even rent?
Yes, you can usually borrow more than the exact amount of your tuition. Leftover funds can be used to cover additional expenses. Talk to your financial aid office for details and only borrow what you absolutely need.
I have been awarded a Stafford loan, what paperwork do I need to complete for the loan to disburse?
To receive a Stafford loan, you must have a valid Direct Loan Master Promissory Note (MPN) on file with the U.S. Department of Education and have satisfied Stafford Loan Entrance Counseling requirements. Both the Direct Loan Master Promissory Note and Stafford Loan Entrance Counseling requirements may be satisfied on-line at
When do I complete the Federal Direct Loan Master Promissory Note (MPN)?
The Master Promissory Note (MPN) must be signed by all Federal Direct Subsidized and Unsubsidized Loan borrowers. Once the Federal Loan Origination Center (LOC) confirms to SFA that a valid MPN is on file, additional MPN's need not be signed for new loan periods, a period of up to 10 years or until you contact the LOC to cancel the MPN. First-time loan borrowers may sign a new MPN as early as January 1 prior to the school year from which you seek financial assistance.
Is it legal for a 17-year-old student to sign a promissory note for a student loan, even though the student has not yet reached the age of majority?
Normally, a minor cannot be held liable for a contract that they sign. However, in 1992 the Higher Education Act was amended to permit eligible students, defined as per Title IV regulations, to sign promissory notes for their own Federal student loans. As such, student loans represent one of the few exceptions to the so-called “defense of infancy”. The specific citation is section 484A (b) (2) of the Higher Education Act of 1965 (20 USC 1091a (b) (2)), and applies to Stafford, PLUS and Consolidation Loans. It does not appear to apply to Perkins and Direct Loans, although it was clearly the intent of Congress that it should.

Several states have also passed similar laws that consider minors to be competent to enter into a contract for an education loan. This extends similar protection to private and non-federal loans. All private education loans require a cosigner when the student is under the age of majority, just to be safe.

I signed a promissory note last year. Why don't I have to sign one this year?
The Master Promissory Note has been used since the 1999-2000 academic year for all Direct Subsidized and Unsubsidized Loans. The Master Promissory Note can be used to make one or more loans for one or more academic years (not to exceed ten years).

It was designed to reduce paperwork and loan processing time for both students and schools.

Remember, your promissory note is a legally binding document. Read over it carefully.

Are my parents responsible for my educational loans?
No. Parents are, however, responsible for the Federal PLUS loans. Parents will only be responsible for your educational loans if they co-sign your loan. In general you and you alone are responsible for repaying your educational loans.

You do not need to get your parents to cosign your federal student loans, even if you are under age 18, as the ‘defense of infancy’ does not apply to federal student loans. (The defense of infancy presumes that a minor is not able to enter into contracts, and considers any such contract to be void. There is an explicit exemption to this principle in the Higher Education Act with regard to federal student loans.) However, lenders may require a cosigner on private student loans if your credit history is insufficient or if you are underage. In fact, many private student loan programs are not available to students under age 18 because of the defense of infancy.

If your parents (or grandparents) want to help pay off your loan, you can have your billing statements sent to their address. Likewise, if your lender or loan servicer provides an electronic payment service, where the monthly payments are automatically deducted from a bank account, your parents can agree to have the payments deducted from their account. But your parents are under no obligation to repay your loans. If they forget to pay the bill on time or decide to cancel the electronic payment agreement, you will be held responsible for the payments, not them.

When do I need a cosigner on a loan and how do I decide who that should be?
Cosigners can be used to help secure a private loan, but are not always necessary. If you do not have a long credit history or do not have good credit, having a cosigner may help you get approved for a private loan or get a better interest rate. If you do decide that you need a cosigner, make sure that person(s) understands and accepts his/her responsibility as one. Cosigners are as responsible for paying the loan as the borrower is. Talk to your financial aid office and lender for more information.
I was awarded a Stafford loan but I want to reduce the amount, how can I do that?
If you want to reduce any award on your award letter, you simply submit an email to and state the amount of the award that you want to reduce. Please attempt to do this as soon as possible after your award is sent to you.
How can I increase my federal loans?
When your FAFSA information is reviewed and a financial aid award is constructed for you, your award will include the maximum amount of federal loans you may be eligible for at that time. If your FAFSA information or other educational information changes, your loan eligibility may increase or decrease.

If your grade level increases, you may be eligible to receive additional funding. You must request this at Student Financial Aid. The additional amounts will be reflected in a revised financial aid award letter and a disclosure statement from your lender.

Keep in mind that there are aggregate loan limits (total maximum amount you are eligible to borrow) and loan limits per grade level in the Federal Direct Loan Program.

My grade level is going to increase in the spring/summer. Will I be eligible for more financial aid?
You might be eligible for more Federal Subsidized Student Stafford or Unsubsidized Stafford loans. Once your Fall/Spring grades have been posted on the Student Information System, if your grade level has increased from a Freshman level to a Sophomore level (30 credit hours earned), or has changed from the Sophomore level to a Junior level (60 credit hours earned) you may be eligible for more Federal Student Stafford Loan or Federal Student Unsubsidized Stafford loan. This depends on your Cost of Attendance and the amount of your initial financial aid award.

If you would like your eligibility for a loan increase to be reviewed, send an e-mail message to with your specific request. If you are eligible, the loan amount will be increased and you will receive a disbursement as scheduled. (A new loan application is not needed). Direct Loans will mail a disclosure statement to you reflecting the award increase. A new financial aid award letter will also include the additional loan amounts. The increase could affect your loan eligibility for the upcoming summer if you plan on attending and receiving federal loans. It will have no impact on the next academic year.

Can I reject all or part of my loan?
Yes, you can reject all or part of your loan. It will not affect the loan amount that you are offered for the next academic year.
I cannot accept my Perkins loan on my Topnet account. Why?
The offered beside the Perkins loan won't change to accept until after you have done your counseling session for this loan. The Perkins Loan Office mails out letters regarding the counseling session to Perkins students in July.
I cannot accept my Parent Plus loan on my Topnet account. Why?
The offered beside the Parent Plus loan will not change to accept until after your parent has completed the loan application. The Parent Plus loan can only be accepted by your parent.
Where are my student loans?
NSLDS Student Access National Student Loan Data System (Requires FAFSA PIN) The National Student Loan Data System (NSLDS) is the U.S. Department of Education's (ED's) central database for student aid. NSLDS receives data from schools, guaranty agencies, the Direct Loan program, the Pell Grant program, and other Department of ED programs. NSLDS Student Access provides a centralized, integrated view of Title IV loans and Pell grants so that recipients of Title IV Aid can access and inquire about their Title IV loans and/or Pell grant data.

Apply for a PIN US Department of Education PIN Registration. Your PIN can be used each year to electronically apply for federal student aid and to access your U.S. Department of Education records online. If you receive a PIN, you agree to not disclose or share your PIN with anyone. Your PIN serves as your electronic signature and provides access to your personal records. You should never give your PIN to anyone, including commercial services that offer to help you complete your FAFSA. Be sure to keep your PIN in a safe place.

If I am in default on an educational loan, can I still receive financial aid?

Students who are currently in default on educational loans are not eligible to receive federal financial aid. Our office recommends that you contact your lender and attempt to make satisfactory payment arrangements with them.

If your default status has been resolved, you must provide a letter from your lender(s) stating that the default status has been resolved and that you are again eligible to receive federal financial aid.

If I take a leave of absence, do I have to start repaying my loans?
Not immediately. The subsidized Stafford loan has a grace period of 6 months and the Perkins loan a grace period of 9 months before the student must begin repaying the loan. When you take a leave of absence you will not have to repay your loan until the grace period is used up. If you use up the grace period, however, when you graduate you will have to begin repaying your loan immediately. It is possible to request an extension to the grace period, but this must be done before the grace period is used up.

If your grace period has run out in the middle of your leave of absence, you will have to start making payments on your student loans.

How do I keep my loan from going into repayment when I switch colleges?
Generally, there is a six-month grace period from the time you stop attending school and until your Stafford loan enters repayment and payments become due. Your financial aid office should be able to help because most colleges do regular enrollment reporting that provides loan holders with information on your status. Also, contacting your lender will make sure you understand when payments will be due and let you tell them that you are still attending school.
Do I need to complete the Exit Counseling requirement?
You must complete the Exit Counseling requirement if any of the following apply: your enrollment falls below half-time status (6 credit hours for undergraduate students, 4.5 credit hours for graduate students), you withdraw or if you graduate. Go to, click on Exit Counseling under the Tools and Resources section on the front page, and follow the instructions to complete the Exit Counseling.
I am having trouble making my student loan payments. What can I do?
There are options for borrowers who need payment relief. The most important first step is to contact your lender as soon as possible. You can work with your lender to adjust your monthly payments or, if needed, request deferment or apply for forbearance. Do your research and discuss the options with your lender to be sure you understand each option and its consequences.

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 Last Modified 10/25/16