FEDERAL DIRECT SUBSIDIZED/UNSUBSIDIZED LOAN FOR STUDENTS

Transcription

1 INSTRUCTIONS AND REQUEST FORM FEDERAL DIRECT SUBSIDIZED/UNSUBSIDIZED LOAN FOR STUDENTS Your Financial Aid Notification for the academic year indicates your eligibility for the Federal Direct Loan program for students under the category of Self-Help Awards. This is one form of financial aid offered to students who file the Free Application for Federal Student Aid (FAFSA), even if they do not demonstrate financial need. It is a loan that will be repaid by the student after leaving college. Detailed information about the loan is found inside. If you plan to accept all or part of your Federal Direct Loan (labeled Direct sub/unsub loan on your gray Financial Aid Notification) you must: 1. Return Loan Request Form (see reverse) to the UE Office of Financial Aid AND 2. Follow the additional instructions listed inside for either first-time or repeat borrowers For more information please contact: Amy Sowders, Student Loan Specialist Office of Financial Aid 1800 Lincoln Avenue Evansville, Indiana Fax

2 Student Last Name First Name MI Social Security Number Date of Birth Address Telephone Number Online Entrance Counseling and Electronic Master Promissory Note (MPN): FEDERAL DIRECT LOAN REQUEST FORM (Return to University of Evansville Office of Financial Aid) First-time Borrowers and students new to UE: You must complete BOTH processes online at studentloans.gov. (Note: Beginning in May 2015, the US Department of Education replaced the FAFSA PIN with the FSA ID. If you haven t already created your FSA ID, you must create this first at fsaid.ed.gov before completing your MPN or online Entrance Counseling.) Online Entrance Counseling for Continuing UE : Those who have never completed online Entrance Counseling must complete this process online at studentloans.gov. (Note: Beginning in May 2015, the US Department of Education replaced the FAFSA PIN with the FSA ID. If you haven t already created your FSA ID, you must create this first at fsaid.ed.gov before completing your MPN or online Entrance Counseling.) AMOUNT YOU ARE REQUESTING Determine the amount you wish to borrow. Refer to your Financial Aid Notification for your maximum eligibility. You may request less than the full amount you have been offered. If you want to accept both subsidized and unsubsidized loans, sum the amounts and write them below. Amount you are requesting: $ (Use whole dollar amounts.) The actual amount disbursed will be minus a federal origination fee of percent (current fee at time of printing; subject to change October 1). Check the box to indicate the type(s) of Direct Loans you will accept: Unsubsidized and/or subsidized loans. I will accept any combination of subsidized and unsubsidized Federal Direct Loans for which I am eligible. Subsidized loan only. (Checking this box may reduce the total amount of loan funds you will receive.) I need my Direct Loan for the following semester(s): Fall and spring semesters (each semester, you will receive one-half of the amount you have requested) Fall semester only (loan amounts for one semester only may be less than annual eligibility) Spring semester only (loan amounts for one semester only may be less than annual eligibility) Summer only. A separate application for summer aid must be completed. This application will be available in the Office of Financial Aid beginning March 1, UE Seniors: Will you graduate in December 2015? Yes No Student s Full Legal Signature: Date: Return this form to: Office of Financial Aid University of Evansville 1800 Lincoln Avenue Evansville, Indiana Fax FOR OFFICE USE ONLY GRADE LEVEL: LOAN PERIOD: Full Year Semester I Semester II Summer ENROLLMENT STATUS: FT HT COA: $ SUBSIDIZED AMOUNT: $ FC: $ UNSUBSIDIZED AMOUNT: $ NEED: $ EXT. UNSUB. Yes AID TOWARD NEED: $ ENTRANCE COUNSELING: Yes No Date REMAINING ELIG: $ ELECTRONIC MPN ON FILE: Yes No DATE: ADJ. DISB. DATE: 6/15

3 FEDERAL DIRECT LO THE FEDERAL DIRECT LOAN PROGRAM The US Department of Education administers the William D. Ford Federal Direct Loan Program. The program consists of what are generally known as subsidized and unsubsidized Direct Loans (for students) and PLUS Loans (for parents of dependent students). Independent graduate and professional students may also borrow through the Grad PLUS Loan program. Direct Loans are made with federal capital and are owned by the federal government. Loan repayments are made to the US Department of Education s federal loan servicers. The amount(s) listed on your gray Financial Aid Notification under Self-Help Awards represents the maximum amount of Federal Direct Loans for which you are eligible. Your individual eligibility is based on these variables: 1) grade level in college, 2) dependency status, 3) level of financial need as determined by the Free Application for Federal Student Aid (FAFSA), 4) total aid from other sources, and 5) variables related to your Cost of Attendance. Your eligibility may include some of each type of loan: Subsidized Federal Direct Loan with unmet financial need may receive the subsidized loan. Interest does not accrue on subsidized loans while you are in college. Unsubsidized Federal Direct Loan Eligibility is not based on financial need. Interest accrues on unsubsidized loans while you are in college at a rate that is currently fixed at 4.66 percent (subject to change July 1). You may pay the interest during school or allow it to accrue and be added to your principal balance when you enter repayment. CHANGES TO YOUR LOAN ELIGIBILITY The Office of Financial Aid has calculated your subsidized and unsubsidized Direct loan eligibility based on your FAFSA data, enrollment status, costs, and known aid amounts as of the date of your Financial Aid Notification letter. Changes to any of these variables could change the type and amount of your Direct Loan. Our office will send you a notice via if your Direct Loan eligibility changes after your original award. Changes can be viewed through WebAdvisor. HOW MUCH CAN I BORROW? The chart below shows the maximum amount you can borrow each year (annual loan limits) and in total over your entire college career (aggregate loan limits). Your dependency status is FAFSA determined. The sum of your loans plus gift assistance may not exceed UE s official Cost of Attendance. Therefore, the actual amounts you are allowed to borrow in a given year could be less if you receive large sums of gift assistance or other types of aid. Dependent students may borrow at the independent student levels (see chart below) if a parent is denied the creditworthy Federal Direct Parent Loan for Undergraduate (PLUS). Parents should consult with the Office of Financial Aid if they are concerned about adverse credit history. ANNUAL LOAN LIMITS FOR DIRECT SUBSIDIZED AND DIRECT UNSUBSIDIZED LOANS Grade Level Dependent Independent Year 1 (0-29 hours) $5,500 (maximum $3,500 subsidized) $9,500 (maximum $3,500 subsidized) Year 2 (30-59 hours) $6,500 (maximum $4,500 subsidized) $10,500 (maximum $4,500 subsidized) Year 3, 4, 5 (60+ hours) $7,500 (maximum $5,500 subsidized) $12,500 (maximum $5,500 subsidized) Graduate/Professional N/A $20,500 (all unsubsidized) AGGREGATE LOAN LIMITS: MAXIMUM TOTAL OUTSTANDING LOAN DEBT Dependent Independent Undergraduate $31,000 (maximum $23,000 subsidized) $57,500 (maximum $23,000 subsidized) Graduate and Professional N/A $138,500 (maximum $65,000 subsidized)

4 AN FOR STUDENTS FEDERAL DIRECT LOAN INTEREST RATES AND FEES Your net loan amount received by UE may be slightly less than the amount you have borrowed because a small origination fee (expect 1-2 percent) is withheld by the US Department of Education before disbursing the loan to UE. The most current information about Direct Loan fees and interest rates can be found on the US Department of Education s Direct Loan homepage at SHOULD I PAY INTEREST ON AN UNSUBSIDIZED LOAN WHILE I M IN SCHOOL? Remember, interest does not accrue during college on a Subsidized Direct Loan, but interest does accrue on an Unsubsidized loan. It is optional to make interest payments on your Unsubsidized Direct Loan during college. If you choose not to pay the accruing interest during college, it will be added to the principal amount of your loan. This is called capitalization. Capitalization increases the unpaid principal amount of your loan that you must repay after finishing college. It will save you money in the long run if you can pay the interest as it accrues during college. Payments toward interest will be made through your loan servicer. REPAYMENT OF FEDERAL DIRECT LOANS Principal payment is deferred on both Subsidized and Unsubsidized Direct Loans until you graduate, stop attending college, or drop below half-time enrollment. Following the deferment period, there is a six-month grace period. During your grace period, you do not have to begin repaying your loan, but interest will accrue. You will have several repayment options from which to select, including standard, extended, graduated, income contingent, and income based. Visit the website of your loan servicer for detailed repayment options. As a dependent undergraduate, if you borrowed the maximum each year, your total four-year indebtedness would be $27,000. Your monthly payment under a standard 10-year repayment plan could range from $ For an interactive loan calculator in order to estimate your monthly loan payment, visit ments.phtml. This Loan Payment Calculator computes an estimate of the size of your monthly loan payments and the annual salary required to manage them without too much financial difficulty. FREQUENTLY ASKED QUESTIONS: FEDERAL DIRECT DIRECT LOAN How did UE determine the amount of loan I was offered and whether my loan was subsidized or unsubsidized? The US Department of Education governs the Federal Direct Loan Program and regulates how we calculate your eligibility. Your initial Financial Aid Award lists the maximum amount and types of loan for which you are eligible, based on these variables: 1) grade level in college, 2) dependency status, 3) level of financial need as determined by the Free Application for Federal Student Aid (FAFSA), 4) total aid from other sources, and 5) variables related to your cost of attendance. At this time, I do not think I will need to use the loan, but what if I need it later? If you will not need the loan to help pay your balance due to UE, then simply circle N by the loan(s) and return one copy of your gray Financial Aid Notification to our office. If you change your mind during the school year, see one of the counselors in the Office of Financial Aid. Each year, you can decide whether or not you need to borrow. Continue to file the FAFSA each year to establish annual eligibility. Do my parents have to cosign a Federal Direct Loan? No. This loan program is a form of financial aid. It is in the student s name and will be repaid by the student after separation from college, whether by graduation, dropping out, or reducing course-load below half-time enrollment. I do not need all of the loan that I have been offered. On the attached Federal Direct Loan Request Form, simply write the amount you want, up to the maximum you were offered. I need more student loan than I have been offered through the Federal Direct Loan program. Dependent students whose parents have been denied the Federal PLUS Loan due to adverse credit history may borrow more in the Direct Unsubsidized Loan at the independent student amounts (see chart inside). Check with the Office of Financial Aid about this process. Once all federal student loan eligibility has been exhausted, some students turn to private educational lenders which offer additional amounts in the student s name with a creditworthy adult cosigner.

5 FEDERAL DIRECT LOANS FOR STUDENTS INSTRUCTIONS FOLLOW THESE STEPS TO APPLY FOR A FEDERAL DIRECT SUBSIDIZED/UNSUBSIDIZED LOAN FIRST-TIME BORROWERS AND STUDENTS NEW TO UE Steps 1 and 2 will be completed at studentloans.gov. Use your FSA ID to sign in. (Note: Beginning in May 2015, the US Department of Education replaced the FAFSA PIN with the FSA ID. If you haven t already created your FSA ID, you must create this first at fsaid.ed.gov before completing your MPN or online Entrance Counseling.) 1. New Direct Loan borrowers and students new to UE must complete online Entrance Counseling at studentloans.gov. 2. Complete an electronic Master Promissory Note at studentloans.gov. 3. Complete the attached Federal Direct Loan Request Form and return it to the UE Office of Financial Aid. The amount listed on your UE Financial Aid Notification indicates your maximum eligibility as of the date of the letter. You may request a lower amount than we have offered by writing that amount on your form. 4. Complete and sign one copy of your gray Financial Aid Notification, indicating that you either accept or decline the subsidized and/or unsubsidized portions of your loan. Return to the UE Office of Financial Aid. UE STUDENTS WHO BORROWED LAST YEAR 1. Complete online Entrance Counseling at student loans.gov if you have never completed the online counseling. (Your MPN should still be valid.) 2. Complete the attached Federal Direct Loan Request Form and return it to the UE Office of Financial Aid. The amount listed on your UE Financial Aid Notification letter indicates your maximum eligibility as of the date of the letter. You may request a lower amount than we have offered by writing that amount on your request form. 3. Complete and sign one copy of your gray Financial Aid Notification, indicating that you either accept or decline the subsidized and/or unsubsidized portions of your loan. Return to the UE Office of Financial Aid.

6 StudentLoans.gov Here you will find links to the necessary online steps and to helpful information regarding the Federal Direct Loan program. Online Entrance Counseling: Online Entrance Counseling is REQUIRED for all firsttime borrowers, students new to UE, AND returning students who have never completed the online Entrance Counseling. Sign in to this site using your FSA ID. Once completed, online Entrance Counseling should be valid during your entire UE enrollment. Master Promissory Note (MPN): This is REQUIRED for all first-time borrowers and students new to UE. Sign in to the site using your FSA ID. Once completed, your MPN should be valid during your entire UE enrollment. You will also find links for information about: Interest rates and loan origination fees Repayment options after college Estimating monthly payments Loan consolidation Making loan payments The Federal Student Aid Information Center (FSAIC) The center can be contacted at for issues such as difficulty completing the electronic Master Promissory Note or reporting address/name changes after loan origination. NSLDS.ed.gov The National Student Loan Data System allows continuing college students to access all of their federal student loan history, including amounts borrowed and servicer information. WHAT HAPPENS AFTER I APPLY FOR MY LOAN? 1. When we receive your completed Federal Direct Loan Request Form (attached) and have confirmed that you have completed Entrance Counseling and the electronic MPN, our office will certify your loan. Our certification is an electronic communication with the Department of Education confirming your loan eligibility and enrollment at the University of Evansville. 2. At the beginning of each semester, one half of the annual loan amount requested will be transmitted electronically to your UE student account to apply toward your UE charges. The Department of Education will withhold a small origination fee of 1.073% (subject to change October 1) before disbursing your loan. Office of Financial Aid 1800 Lincoln Avenue Evansville, Indiana or Fax [email protected] FEDERAL DIRECT SUBSIDIZED/UNSUBSIDIZED LOAN