Q: What is federal student aid or financial aid?

A: Student or financial aid is money received in the form of grants (free money), scholarships, work-study, loans, education tax credits, and employment. Assistance exists to help students and their families pay for education costs after high school, such as tuition, fees, room and board, books, supplies, etc.

Q: What are Federal Stafford loans?

A: Stafford loans are either subsidized or unsubsidized. You can receive a subsidized and/or an unsubsidized loan for the same enrollment period. Subsidized Stafford loans are awarded on the basis of financial need. You won’t be charged interest before you begin repayment or during grace periods or authorized deferment periods. The federal government “subsidizes” or pays the interest during these periods. Unsubsidized Stafford loans are not awarded on the basis of financial need. Your loans will accrue interest from the time the loan is disbursed until it is paid in full. If you allow the interest to accrue while you are in school or during other periods of non-repayment, the interest will be added to the principal amount of your loan when the loan enters repayment status (capitalized).

Q: Am I eligible to receive a Federal Stafford loan?

A: If you are a student enrolled in an eligible program, at least half-time, you may be eligible to receive a Federal Stafford loan. Other general eligibility requirements apply which are set by the federal government or school.

Q: What is the interest rate on the Federal Stafford loan?

A: The current federally set interest rates for subsidized undergraduate Stafford loans first disbursed on or after July 1, 2008 through June 30, 2009 is a fixed rate of 6.0%. Effective July 1, 2009 through June 30, 2010, this fixed rate decreases to 5.6% .The interest rate on unsubisidized Stafford (undergraduate and graduate) or subsidized graduate Stafford loans is a fixed rate of 6.80% from July 1, 2008 through June 30, 2010.

Q: When do I begin repayment on my Federal Stafford loans?

A: After you graduate, leave school, or drop below half-time enrollment, you have a one-time, six-month grace period before you begin repayment.

Q: What is the Grad PLUS loan?

A: This is a loan that graduate students can borrow in addition to their Federal Stafford loans, which offers the same terms as a Federal Parent PLUS loan.

Q: What are federal parent PLUS loans?

A: PLUS loans are federal loans which help your parents pay for your education expenses if you are a dependent undergraudate student enrolled at least half-time in an eligible program at an eligible school. (Other federal and school guidelines may apply.) Your parents also must have an acceptable credit history. If this is not the case, please inquire at your financial aid office or contact Lela for more details on your options.

Q: How do my parents apply for a PLUS loan?

A: Your parents may complete and submit a Federal Family Education Loan Program (FFELP) PLUS loan application, available from your school, lender, or state guarantor, and online at www.lela.org. We recommend that your also ask your financial aid administrator about the process at your school.

Q: When does repayment begin on the Federal FFELP, Parent PLUS, and GradPLUS loans?

A: For FFELP PLUS or GradPLUS loans effective July 1, 2008, the borrower has the option of beginning repayment either 60 days after the loan is fully disbursed or the option of a six-month grace period starting after the dependent student (on whose behalf the parent borrowed) ceases to be enrolled on at least a half-time basis.

Q: What is the interest rate on the Parent Plus and GradPLUS loan?

A: For FFELP PLUS or GradPLUS loans disbursed on or after July 1, 2006, the federally set interest rate is fixed at 8.50 percent.

Q: How will I get my student loan money?

A: Your school will receive your loan funds from your lender or designated service provider in at least two installments. Check with your school for their procedures unique to your loan type. Your loan money must first be applied to pay for tuition and fees, room and board, and other school charges. If loan money remains, you’ll receive the funds by check or in cash, unless you give the school written authorization to hold the funds until later in the enrollment period. Please note that generally, if you’re a first-year undergraduate student and a first-time borrower, your school cannot disburse your first payment until 30 days after the first day of your enrollment period. This practice ensures you won’t have a loan to repay if you don’t begin classes or if you withdraw during the first 30 days of classes.

Q: Will I receive all of the funds at one time?

A: No, all federal student loans are required to be disbursed in at least two equal amounts.

Q: Are there penalties for paying off a student loan early?

A: No. Federal Stafford, Parent (PLUS), and Grad PLUS loans can be prepaid without any penalties.

Q: What is the purpose of obtaining a consolidation loan?

A: A consolidation loan can simplify loan repayment by allowing you to combine several types of federal student loans with various repayment schedules from different lenders into one loan. Effective 4/1/08, Lela suspended origination of consolidation loans until further notice. If this is of interest to you, please contact Lela at 800-228-4755 for more information on your options.

Q: Does Lela offer consolidation loans?

A: Effective 4/1/08, Lela has suspended origination of consolidations until further notice. If this is of interest to you, please contact Lela at 800-228-4755 for more information on your options.

Q: What is a deferment?

A: A deferment is a period of time during repayment in which the borrower, upon meeting certain conditions, is not required to make payments of loan principal and for some loan types interest as well. For a list of deferment options set by the federal government, go to www.studentaid.ed.gov.

Q: What is a student loan servicer?

A: Many lenders contract with student loan service organizations (servicers) to manage their loans and handle billing during repayment. Servicers do not own these loans but merely manage the day-to-day billing, collection, and payment processing on the lender's behalf.

Q: Who is servicing my loans?

A: Lela loans guaranteed after October 1, 2001 are serviced by EdFinancial Services. You may access your loan account online at www.asklela.org or at www.edfinancial.com, or you may contact EdFinancial Services' customer service department toll-free at 866-273-4138. If your loans were disbursed prior to October 1, 2001, Nelnet may service your loans. You may contact Nelnet toll-free at 800-874-3150. If you are uncertain, please contact Lela Customer Service at 800-228-4755 for assistance.

Q: Can I claim student loan interest on my taxes?

Q: What is Electronic Funds Transfer (EFT)?

A: With EFT, the lender or designated third party sends your loan funds to your school electronically instead of via a paper check. By using EFT, you will not need to go to the financial aid or bursar's office to endorse checks.

Q: What is an electronic signature?

A: Under the Electronic Signatures in Global and National Commerce Act (E-sign), an electronic signature is an “electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.” A signature is a demonstration of intent; an electronic signature is a demonstration of intent done electronically. A signature on a student loan promissory note signifies the applicant has read, understands and agrees to the terms of the promissory note and related materials.

Q: Am I eligible to borrow through Lela?

A: Lela student loan funds are available to ALL Louisiana residents whether they attend an eligible school (college, university, vocational or technical) in-state or are a resident attending out-of-state, as well as those out-of-state residents attending an eligible school in Louisiana. The financial aid office at your school determines financial aid eligibility. Other restrictions are those placed by the federal government and your school. Contact your financial aid office for more details.

Q: Can my parents obtain a Federal PLUS loan through Lela?

A: Yes. When utilizing LOSFA or TG as your guarantor, you will not be charged the federally assessed default fee which is currently 1% of your loan amount.

Q: How do I select a lender?

A: Student and parent borrowers have the right to select their preferred lender once approved and certified for a student loan by their school financial aid office. Once notified of your loan award eligibility, you would just select Lela (805149) as your lender preference.

Q: Once I choose a lender for one student loan, should I stick with that lender for subsequent loans?

A: It makes sense to borrow through one lender such as Lela so you are not responsible for more than one loan payment once you go into repayment. Keeping your loans with one lender will simplify your repayment process.