u s s t u e n t loans

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1 f e d e r a l d i rect u s s t u e n t loans the answers to some common questions regarding federal direct us student loans.

2 Why a Loan? Your education is an investment into every aspect of who you are. And at Trinity Western University, we want to encourage you in your educational goals and help you successfully plan financially for investing in your future. Part of being financially successful while attending university is budgeting for each year and working hard to earn the funds you need to pay for your tuition. Sometimes after you ve done everything you can to come up with the funds, you will still be left with a deficit and need to find some additional funding. This is when we would encourage you to consider applying for a student loan. Even though loans can be a little scary sometimes, they can also provide you with the extra financial support you need to get through university. Government loans are a good option as they remain interest free and you do not need to make any payments until you have finished school. While student loans can be a great option to help you pay for school, they are real loans. You have to pay them back, just the same as a car loan or a mortgage. So we only recommend that our students consider taking out a student loan once they have accessed all other sources of available funding and are still coming up short for the year. Other sources of available funding that you should apply for prior to a student loan are: TWU financial aid External scholarships Income from a part-time job *Savings from your summer job The following pages of this booklet will give you some additional information about student loans. For example: how and when to apply, how much you can expect to receive, how to maintain your loan, interest rates, and the repayment process. If you have any questions about the information you read here, please do not hesitate to contact the Financial Aid Office at awards@twu.ca or by phone at *All students should work as much as they can during the summer and save as much of that income as possible. Your summer employment income is going to be your best resource for free money outside of twu financial aid. why a loan? the application process how much will you get? using your loan interest rates repayment parent plus loans PG 1

3 The Application Process when to apply You can begin applying for your US loan each year on January 1, when the FAFSA application for that year opens up. The application process is the same for both new and returning students. Even if you have received a loan in previous years (at twu or elsewhere) you must complete a new loan application every year, as there is no part of your loan application that rolls over from year to year. how to apply 1) Complete your FAFSA ( Our school code is G09486 (or ) Your answer on lines 32 and 76 MUST be Already Completed or Not Going to File to produce a valid Student Aid Report. 2) Complete the Master Promissory Note ( How Much Will You Get? You are eligible for a Direct Loan if you are an undergraduate student enrolled in at least half-time studies, which at twu is at least 8 credits*. Eligibility for subsidized loans is based on financial need. All approved loan amounts are divided 50/50 between the fall and spring semesters. So you can expect to receive half of the total amount you were approved for each semester. direct loan amounts Dependent Student Max Subsidized Max Unsubsidized Total Year 1 $3,500 $2,000 $5,500 Year 2 $4,500 $2,000 $6,500 Year 3/4 $5,500 $2,000 $7,500 Independent Student Max Subsidized Max Unsubsidized Total 3) First time borrowers must complete Entrance Counseling ( 4) Complete the statement of Borrowers Loan Certification ( You should print a copy of this document and scan/ a completed copy to awards@twu.ca or fax it to This document will allow you to select the loan amount that you would like to be certified for. 5) us at awards@twu.ca to inform us that you have completed steps #1 through #4. Your loan application cannot be processed until all of the above steps are completed every year. Again, please be aware that there is no part of the loan application that will roll over from the previous year (with the exception of your Entrance Counseling), so you will need to complete a new loan application each year, even if you have had a loan previously. Year 1 $3,500 $6,000 $9,500 Year 2 $4,500 $6,000 $10,500 Year 3/4 $5,500 $7,000 $12,500 All amounts are in USD * Note: If you are a fifth-year, PYP (education) student, then you could qualify for a maximum of $5,500 in subsidized funds and $7,000 in unsubsidized funds. *You must be registered in a minimum of 8 credits to be eligible for loans; however you must be registered in a minimum of 12 PG 2 PG 3

4 Using Your Loan Once you have completed a loan application for the current year, the Financial Aid Office will process your application and add an approved loan amount to your Aid Package. We will also mail a letter to your home address that contains further details of your approved loan amount and disbursement dates. Lastly, we will notify the Office of the Registrar of how much loan funding you have been approved for, and an approved loan amount will be added to your student invoice. Please be aware that although your loan funding will be applied to the total amount owing for the semester, you will still be required to pay fifty percent of the remaining balance if your loans and financial aid do not cover the full semester s balance. 100% of fees - Financial Awards/Loans = Balance (50% of balance due for 1st payment) Interest Rates while you are in school Direct Loans are divided into a subsidized and an unsubsidized portion. While you are in school, your subsidized Direct Loan will be interest free. However, there will be interest accruing on the unsubsidized portion of your Direct Loan. You can pay the interest while you are in school, 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. The current interest rate on a Direct Unsubsidized loan is fixed at 6.8% for all borrowers. Once you are in repayment, interest will begin accruing on the full balance of your loan. when you graduate Current interest rates: The interest rate for new subsidized and unsubsidized loans is a fixed 6.8%. For more information on interest rates, please see the Financial Aid Office or visit Repayment when do i begin repaying my loans? After you graduate, leave school, or drop below half-time enrollment, you will have a six-month grace period before you begin repayment. During this period, you'll receive repayment information from your loan servicer, and you'll be notified of your first payment due date. Payments are usually due monthly. Be sure to keep your address information current with your loan servicer. make your payments on time Your loan servicer will provide information about repayment and will notify you of the date loan repayment begins. It is very important that you make your full loan payment on time, either monthly (which is most typical) or according to your repayment schedule. If you don't, you could end up in default, which has serious consequences, such as a damaged credit rating. Student loans are real loans. You have to pay them back, just the same as a car loan or a mortgage. get your loan information To obtain information on your loan amounts, lenders, etc., you can contact the Financial Aid Office at twu, and we will do our best to assist you. If you would like to access your loan information on your own, the US Department of Education's National Student Loan Data SystemSM (NSLDSSM) provides information on your federal loans including loan types, disbursed amounts, outstanding principal and interest, and the total amount of all your loans. To access NSLDS, go to If you're not sure who your loan servicer is, you can look it up on ed.gov or call the Federal Student Aid Information Center at FED-AID ( ; TTY ). To see a list of Federal Student Aid servicers for the Direct Loan Program and for FFEL Program Loans purchased by the US Department of Education, go to the Loan Servicer page. repayment plans You have a choice of several repayment plans that are designed to meet the different needs of individual borrowers. The amount you pay and the length of time to repay your loans will vary depending on the repayment plan you choose. Standard Repayment: With the standard plan, you'll pay a fixed amount each month until your loans are paid in full. Your monthly payments will be at least $50, and you'll have up to 10 years to repay your loans. PG 4 PG 5

5 Parent PLUS Loans Your monthly payment under the standard plan may be higher than it would be under the other plans because your loans will be repaid in the shortest time. For that reason, having a 10-year limit on repayment, you may pay the least interest. If you have specific questions about repaying your Direct Loan, contact your loan servicer. If you don't know who your loan servicer is, you can contact the Financial Aid Office or go to to find out. Extended Repayment: Under the extended plan, you ll pay a fixed annual or graduated repayment amount over a period not to exceed 25 years. If you're a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans. Your fixed monthly payment is lower than it would be under the Standard Plan, but you'll ultimately pay more for your loan because of the interest that accumulates during the longer repayment period. This is a good plan if you will need to make smaller monthly payments. Because the repayment period will be 25 years, your monthly payments will be less than with the standard plan. However, you may pay more in interest because you're taking longer to repay the loans. Remember that the longer your loans are in repayment, the more interest you will pay. what if i have trouble repaying the loan? If you have trouble making your loan payments, there are options for help available to you. Under certain circumstances, you can receive a deferment or forbearance that allows you to temporarily stop or lower the payments on your loan. If you know that you will have trouble repaying your loan, you should contact your loan servicer immediately as it is important to take action before you are charged late fees. For more information please contact the Financial Aid Office or go to www. studentloans.gov. The Direct PLUS Loan is a US federal loan that a parent of a dependent student can use to help cover their son/daughter s education costs. when to apply You can begin applying for your Parent PLUS Loan each year in June and the application process is the same for first-time or reapplying parents. how to apply 1) Complete a PLUS Loan application at 2) Complete a Master Promissory Note. The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the Department. It also explains the terms and conditions of your loan(s). The electronic MPN will be provided by the Department of Education ( To complete an MPN online, you will be required to use your Department of Education-issued PIN (not your child's). If you do not have a PIN, you may request one from the official PIN site. eligibility In order to be eligible for a PLUS Loan, you must meet the following criteria: 1) You must be the student s legal guardian. 2) The student must be considered dependent. 3) The student must be registered in at least half-time studies. Also, please note that Parent PLUS loan borrowers cannot have an adverse credit history (a credit check will be done). If a student s parent applies for a PLUS loan and is denied, then the student will be considered independent and will be given additional unsubsidized Direct Loan funding. Again, please be aware that a student cannot take any online courses, distance education, or correspondence courses while receiving PLUS Loan funding. * Note: As a foreign school, the US Department of Education requires TWU to have its students complete a new MPN and PLUS Loan application every year in order to receive a Plus Loan. You cannot receive loan funding without completing a new PLUS loan application and MPN each year. PG 6 PG 7

6 how much will you get? There are no set limits for Direct PLUS Loans, but you may not borrow more than the cost of your child's education minus any other financial aid received, such as a Direct Subsidized or Unsubsidized Loan or any TWU financial aid they have received. interest rates The interest rate for Direct PLUS Loans is a fixed rate of 7.9%. Interest is charged on Direct PLUS Loans during all periods, beginning on the date of your loan's first disbursement. To find out more information on interest rates for Direct PLUS Loans, contact your loan servicer. repayment The repayment period for a Direct PLUS Loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. Parent PLUS Loan borrowers whose loans were first disbursed on or after July 1, 2008, may choose to have repayment deferred while the student for whom the parent borrowed is enrolled at least half-time and for an additional six months after that student is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the parent during the deferment. For more information on repaying your loan please contact the Financial Aid Office or visit the Direct Loan website at contact us Financial Aid Office Mattson Centre Office Hours Monday - Friday 8:30am - 4:30pm Ph: Fx: E: awards@twu.ca Mailing Address Trinity Western University Financial Aid Office 7600 Glover Road Langley, British Columbia v2y 1y1 Office of the Registrar Mattson Centre Office Hours Monday, Tuesday, Friday 8:30am - 4pm Wednesday, Thursday 9:30am - 4pm Ph: Fx: E: registrar@twu.ca Mailing Address Trinity Western University Office of the Registrar 7600 Glover Road Langley, British Columbia v2y 1y1 PG 8 PG 9

7 7600 GLOVER ROAD, LANGLEY, BC, CANADA V2Y 1Y1 US MAIL: PO BOX 1409 BLAINE, WA USA ph: T W U. C A