Direct Loan Entrance Counseling Session

Transcription

1 Direct Loan Entrance Counseling Session

2 Welcome to your Loan Entrance Session: You are here because: An entrance interview is a federal requirement that must be completed before you can receive student loan funds. The entrance interview is intended to help reduce student loan defaults. If you are aware of your rights and responsibilities you will be a more informed borrower and avoid default.

3 How to avoid problems with Financial Aid Read all material sent to you (our primary method of communication is through your CCC account) Know the Satisfactory Academic Progress (SAP) rules Be aware of deadlines Check your PATHWAY account regularly

4 Reduce your loan debt Apply for scholarships! These are funds that do not need to be repaid Visit our website:

5 Reduce your loan debt Only borrow what you need. Plan your financial living expenses, for example your: Housing Transportation Costs Additional School Expenses Books/Supplies Allied Health Supplies Cosmetology Kits Tools

6 SATISFACTORY ACADEMIC PROGRESS(SAP) Students must have a cumulative completion rate of 67% or greater Students are required to maintain a calculated 2.0 cumulative GPA which includes all developmental course work. Cannot have exceeded 150% of the amount of time to receive degree (includes repeats, withdrawals, audits, transfer hours, developmental hours whether your have received financial aid or not)

7 TYPES OF DIRECT LOANS Direct Subsidized Loans Direct Subsidized Loans are for students with financial need. Your school will review the results of your Free Application for Federal Student Aid (FAFSA) and determine the amount you can borrow. You are not charged interest while you re in school at least half-time and during grace periods and deferment periods.

8 Types of Direct Loans Direct Unsubsidized Loans You are not required to demonstrate financial need to receive a Direct Unsubsidized Loan. Interest accrues (accumulates) on an unsubsidized loan from the time it s first paid out. You can pay the interest while you are in school and during grace periods and deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principal amount of your loan). If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount.

9 DIRECT LOAN INTEREST RATES Direct Subsidized Loans If the first disbursement of your subsidized loan is between July 1, 2012 and June 30, 2012, the interest rate on your loan is fixed at 3.4%. Direct Unsubsidized Loans The interest rate is fixed at 6.8% for all borrowers (undergraduate and graduate).

10 UPDATED INTEREST RATES

11 Other fees? There is a loan fee on all Direct Subsidized and Unsubsidized Loans. The loan fee is a percentage of the amount of each loan you receive. For loans first disbursed on or after July 1, 2010, the loan origination fee is 1.051%. We will deduct the loan origination fee proportionately from each loan disbursement. The specific loan origination fee that you are charged will be reflected in a disclosure statement that we send to you.

12 NSLDS is where you go to look up your loan history.

13 HOW MUCH CAN I BORROW PER YEAR? Annual Loan Limits for Direct Subsidized Loans and Direct Unsubsidized Loans Dependent Undergraduate Student Freshmen - $5,500 No more than $3,500 of this amount may be in subsidized loans. Sophomore - $6,500 No more than $4,500 of this amount may be in subsidized loans Independent Undergraduate Student Freshmen - $9,500 No more than $3,500 of this amount may be in subsidized loans. Sophomore - $10,500 No more than $4,500 of this amount may be in subsidized loans

14 BUDGET CONSIDERATIONS Occupation Estimated Manageable Monthly Salary Loan Debt Payment Accountant /Auditors $43,500 $23,644 $290 Computer Programmer $ 57, 590 $ 31,302 $ 383 Cosmetologist $ 17,660 $ 9,598 $ 117 Dental Hygienist $ 51,330 $ 27,899 $ 342 Teacher $ 39,700 $ 21,578 $ 264

15 Repaying your Loans You must repay the full amount of each Direct Loan you receive, plus interest. The repayment period for each Direct Loan that you receive begins on the day after your grace period ends. You must make payments on your loan even if you do not receive a bill or repayment notice. You may prepay all or any part of the unpaid balance on your loans without penalty.

16 REPAYMENT SCHEDULE Standard fixed monthly payment 10 year repayment Graduated lower payments at first, payments gradually increase over time 10 year repayment Extended Repayment Loans over $30,000 fixed or monthly payments 25 year repayment Income Contingent Payment based on monthly Income may change as income changes Income-Based must have a partial financial hardship Monthly payment amount may be adjusted annually Pay As You Earn - loan debt must be high relative to income

17 Grace Period 6-Month Grace Period The grace period is the amount of time you are given when you graduate, withdraw, or drop to less than half-time before you are expected to make your first payment. The minimum repayment is $50 per month but can be more depending upon the amount borrowed.

18 GRACE PERIOD CONTINUED If your loan was/is first disbursed from July 1, 2012 through June 30, 2014, the federal government will not pay the interest during your grace period. Graduate and professional student borrowers with Direct and FFEL PLUS loans that were first disbursed on or after July 1, 2008, receive an automatic deferment while in school and a sixmonth deferment (comparable to a grace period) after they graduate, leave school, or drop below half-time enrollment.

19 AGGREGATE LIFETIME LOAN LIMITS Maximum Total Debt from Stafford Loans When You Graduate (aggregate loan limits) Dependent Undergraduate Student $31,000 No more than $23,000 of this amount may be in subsidized loans. Independent Undergraduate Student $57,500 No more than $23,000 of this amount may be in subsidized loans.

20 TO APPLY FOR A DIRECT LOAN AT CCC You must have a complete FAFSA application on file. You must meet the Satisfactory Academic Progress (SAP) criteria You cannot be in default status on a Federal Student Loan You cannot have met or exceeded the regulatory aggregate loan limit You must complete entrance counseling You must fill out and sign a Master Promissory Note

21 ENROLLMENT You must be enrolled at least half-time to receive funds Remainder of any loan will be canceled if you drop below halftime If you drop prior to census date, your loan eligibility amount may change Total withdrawals will put you into immediate repayment

22 How your loans will be disbursed (paid out) Once certified, you will be able to register and charge your tuition, books and fees against your anticipated loan amount. After classes start your loan will be credited to your account All charges will come out of your loan if there is no other type of financial aid Refund checks will be released in two disbursements for each term you request a loan for All charges will come out of the first disbursement

23 Institutional Policies Students must attend a CCC loan counseling session each year prior to having a loan certified, even if they have already attended a session at another school Transient and/or undeclared major students are not eligible for any financial aid including Stafford student loans. Loans are not disbursed until 30 days after the first class day of the semester.

24 Institutional Policies If at any time a student falls below halftime or fails to meet CCC s Satisfactory Academic Progress (SAP) criteria, the loan will be canceled without notice and any un-disbursed funds will be returned to the lender. If at any time a student s enrollment status drops below halftime, they must complete the student loan exit counseling process. Failure to complete this will result in a hold being placed on all student records.

25 Institutional Policies CCC is a two year degree granting institution. Students may only receive freshman and sophomore level loans while attending CCC. Freshman level $3500 Sophomore level $4500 Freshman level is 0 29 earned hours Sophomore level is 30 + earned hours

26 You must repay your loans! Even if you Do not complete your program of study. Cannot find employment after graduation. Are not satisfied with the education you paid for with your loan.

27 Trouble Making Payments If you are having trouble making payments, contact the CCC financial aid office or your Direct Loan servicer as soon as possible to discuss options that may help you. Options include: Changing payment plans Deferment Forbearance

28 Trouble Making Payments If you stop making payments and don t have a deferment or forbearance, your loan could go into default! Your loan first becomes delinquent if your monthly payment is not received by the due date. If you fail to make a payment, your Direct Loan service will send you a reminder that your payment is late.

29 Consequences if You Default Default occurs when you become 270 days past due. The consequences of default can be severe. The entire unpaid balance of your loan and accrued interest becomes due and payable immediately. You lose eligibility for deferment. Your account is sent to a collection agency.

30 Consequences if You Default The default will be reported to credit bureaus The federal government can take all or part of your federal tax refund. Late fees, additional interest, court costs, collection fees, and other costs incurred collecting your loan will increase your loan debt. Your employer can garnish your wages and send them to the government.

31 Changes you must report - It is your responsibility to contact your Direct Loan Servicer and CCC if you Stop attending school Drop below half time Graduate Change your name, address, phone number

32 Questions?