To qualify for federal student loans, you must first complete the Free Application for Federal Student Aid. This form also is used to determine your eligibility for other federal financial aid programs, as well as for many state and institutional sources of financial aid. You should submit the FAFSA after Jan. 1 preceding the academic year that you’re interested in attending college.

Information you supply on the FAFSA is used to calculate your Expected Family Contribution, the amount that you and your parents are expected to provide toward your education expenses.

The financial aid office of the college or university that you plan to attend will compare your EFC against the school’s cost of attendance to determine your financial need. The financial aid staff then will tailor an aid package, which may include grants, work-study and loans to meet your financial need. Because loans must be repaid with interest, you would be wise to exhaust all other sources of financial aid before taking out a loan.

Master Promissory Note
If your school determines you are eligible for a federal student loan, you will be asked to sign a Master Promissory Note. The MPN is a legally binding contract whereby you promise to repay the loan. In many cases, you will be able to take out multiple loans throughout your college career by signing one MPN. If you are taking out both Stafford and PLUS loans, you will be asked to sign separate promissory notes for each loan. By signing the MPN, you promise to repay all of these loans. You may be able to sign the MPN online using an electronic signature.

Disbursing the Loan Dollars
Your loan typically will be paid in two disbursements. If you are a first-year, first-time undergraduate student, your disbursement may be delayed until 30 days after classes begin. Your school typically will credit your account for the amount of the loan, less any loan fees, tuition and related expenses.