CAPITAL AREA CAMPUS
WELCOME TO FEDERAL STUDENT LOANS INFORMATION
If you decide to take out a loan, make sure you understand the terms and conditions of the loan. Student loans can come from the federal government, Loans made by the federal government, called federal student loans, usually offer borrowers lower interest rates and have more flexible repayment options than loans from banks or other private sources.
Unlike scholarships or the Work-Study Program, the student loan is money that must be repaid to the Department of Education with interest. Student loans are a legal obligation to pay. This though has not completed their studies, not are satisfied with the education or get a job once you graduate. The Direct Loan Program of the Department of Education has the following loans available. Direct Loan Subsidized and Unsubsidized and PLUS Loan. This program offers several advantages, among these are: low interest rates, various payment options, among others.
DIRECT LOAN SUBSIDIZED
The Direct Subsidized Loan is based on financial need, so the Department of Education of the United States pays the interest while you are enrolled, during the grace period or in periods of deferment (Loans granted between July 1, 2012 and July 1, 2014 will not be subsidized interest during the grace period). If during the grace period you choose not to pay interest that accrues, it will be added to your principal balance. This loan is available for Undergraduate students.
DIRECT UNSUBSIDIZED LOAN
The Direct Unsubsidized Loan is not based on financial need, so interest accrues from the time it is disbursed until the debt is paid in full. The borrower has the option to pay the interest as it accrues or allow them to be added to principal. This loan is available for Undergraduate students and graduate level.
DIRECT PLUS LOANS
Direct Plus Loan is available to graduate level students and to parents of dependent children under the criteria used by the Department of Education. The maximum amount to request is the cost of attendance (COA) minus additional financial aid received. Borrowers should not have a negative credit history.
This is not based on financial need, so interest accrues from the time it is disbursed until it is paid in full. The borrower has the option to pay the interest as it accrues or allow them to be added to principal. Responsibility for payment of a Parent PLUS Loan cannot be transferred to the student, so that the applicant or co-signer will be responsible for payment. The first payment for a Plus Loan is due within 60 days of disbursement of the loan in full. There is no grace period for this type of loan.
To be eligible for Federal Direct Loan Program, you must comply with the Federal Department of Education and Institutional requirements. If you don’t comply, your application for student loans will be canceled at any time:
ANNUAL LOAN LIMITS
Note: The maximum amount you can borrow each school year depends on your grade level and other factors. The actual amount you are eligible to borrow each year is determined by your school and may be less than the maximum amount.
INTEREST RATES AND COSTS OF ORIGINATION
The Direct Loan Program has fixed interest rates and origination costs which are determined and changed annually. Here are the percentages for the academic year 2014-2015.
DISBURSEMENT OF THE LOAN
After 30 days of beginning of the enrollment at least half time and if you do not owe any documents that prevent the disbursement, the institution is going to apply first to the student's account. If there is any excess or surplus, it will be sent to the parent or student (as appropriate), unless the student authorizes the institution holding the funds. Any remaining funds must be used for education expenses. For more information you may contact the Financial Aid Office.
NEW REGULATION FOR NEW LOAN BORROWERS
Limitation Direct Subsidized Loan
As of July 1, 2013, if you are a first time borrower and you receive a Subsidized Direct Loans have a maximum time limit to be eligible for subsidized interest loans. In general you should not receive Direct Subsidized Loan by more than 150% of their program of study. This is called maximum eligibility period. (SULA) for its acronym in English. The period of eligibility is based on the term of your program of study. So your maximum eligibility could be modified if the program is changed. Generally, Direct Subsidized Loans received in their previous program of study will be counted against your new eligibility period.
Once you lose your eligibility to receive Direct Subsidized Loans may receive no Subsidized Direct Loans. In addition, if you continue enrolled after losing eligibility under certain circumstances the Department of Education will pay the interest on subsidized loans received. Any accrued unpaid interest will be added to your principal balance, either at the end of your grace period, deferment, among others.
For more information about Student loans and new regulations visit: www.studentaid.ed.gov/es/types/loans.
Maximum Elegibility Period Examples (MEP)
SEPARATION OF STUDIES / GRACE PERIOD
After the first separation from his studies occur, for example: graduates, discontinue studies or reduce your enrollment to less than half time, you will begin the six months prior to the payment of the principal of the student loan, and this is known as the period of grace. Also, to comply with the Department of Education you have to complete the Exit Counseling visiting: www.studentloans.gov.
Subsidized loans processed before July 1, 2012 and after July 1, 2014 did not accumulate interest.
Unsubsidized and Plus loans accrues interest and during these months, so you will have the option to pay or let them be added to the principal. If you are active in the Armed Forces could have a longer period of grace to those listed here, and have additional options to postpone the payment of your loan.
The Department of Education provides several options for payment plans, conform to the economic situation of the borrower. The following payment plans available:
The main objective of the Direct Consolidation Loans Program, is to help the borrowers to manage their debt, by placing all the student loans under one account. Some of the benefits are: one Service Agency, one payment, easy monthly payments, fixed interest rate and variety of payment plans
Consider the following before you start to consolidate: access the Department of Education at www.nslds.ed.gov to find out if you have more than one agency managing your loans, also, make sure to check your loans status since they cannot be: In-School Deferment, Bankruptcy, Legal Settlement, or Foreclosure.
One disadvantage of consolidating your loans is the fact that it can extend the amount of years to make payments resulting in more interests accumulated.
Consolidation of your loans will give you the option to select a payment plan: Basic, Extended, Gradual, Income Contingent.
The consolidation process can be done:
To apply for a Consolidation visit www.studentloans.gov or you can call 1-800-557-7392. It takes approximately 30 to 60 working days to complete the process. During this period of time, you are responsible for making payments to the agency that is handling the consolidation.
Under certain circumstances it might postpone for specific and limited time payment of a student loan. This options are known as Deferrments and / or Forbearances. If you are unemployed, facing economic difficulties, receives aid from the government, is enrollment at least half time, you may qualify. You should contact the Service Agency loan. For additional information visit www.studentaid.ed.gov.
For more information, visit www.studentaid.ed.gov or contact your Service Agency loan.
Total and Permanent Disability
If you become disable, your loan might be permanently discharge, if it is determined that you are totally and permanently disabled and meet certain requirements. To apply for a permanent discharge of your loans, you have to submit a certification from a physician certifying that you are totally and permanently disabled.
If you, the borrower, die, then your federal student loans will be discharged. If you are a parent PLUS loan borrower, then the loan may be discharged if you die, or if the student on whose behalf you obtained the loan dies. The loan will be discharged if a family member or other representative provides a certified copy of the death certificate to the school or to the loan servicer.
Do not make your loan payments for 270 days or more, according to the terms and conditions of your Master Promissory Note will cause your loan is declared in default. The consequences include, but are not limited to:
Alternatives to prevent Default
By selecting one of the previous alternatives, the Default status will be removed as long as you completed it in a satisfactory way. By doing this you will be eligible to receive Title IV funds.
RIGHTS AND RESPONSIBILITIES
By getting a student loan, you will have certain rights. This a brief summary of them:
As a borrower will have responsibilities both to the institution. This a brief summary of them:
For additional information about the Direct Loan Program access the links listed or call the Office of Federal Service of the Department of Education.
Student Loans The Federal Department of Education can assist you in managing your student loans under the Loan Program. You can visit their website to complete your FAFSA, Master Promissory Note, Entrance Counseling, Exit Counseling; among other things.
Federal Student Aid
Department of Education, which covers all the necessary information about the types of financial assistance.
National Student Loan Data System (NSLDS)
You can verify your history of financial aids (loans and scholarship). Also, find out which agency is managing your loans. If you need a PIN number visit: www.pin.ed.gov
Direct Loan (Consolidation)
For orientation and how to work the consolidation and combine loans into one account.
Defaulted Students Loans
For orientation about default, when your after 270 days without making a payment to your student loan.
Financial Aid Staff
Alejandra Ríos, Official
301-949-2224 ext 8712