Presentation on theme: "SulSULLIVAN UNIVERSITY SYSTEM. SUS private loan option Last resort to cover a gap in aid Co-signer required Full time students only WHAT IS THE CEF LOAN?"— Presentation transcript:
SUS private loan option Last resort to cover a gap in aid Co-signer required Full time students only WHAT IS THE CEF LOAN?
$1000 minimum loan amount in academic year $8000 maximum loan amount in academic year $16,000 total loan amount for program Minimum loan term is as short as 12 months Maximum loan term is as long as 60 months Regular payment of principal and interest begins the 1 st day of the 2 nd month once studies cease Gap - cash payments= loan amount LOAN AMOUNTS AND REPAYMENT
Identified via the packaging screen in Campus Vue Remaining balance to schedule must be a positive amount Used to determine the required monthly cash payment plan Gap= cash payment plan + loan amount WHAT IS A GAP?
Includes institutional charges only Cost of attendance minus all other aid Tuition Fees First quarter books On campus housing Meal plan BUDGETInstitutional Charges WHAT DOES THE LOAN COVER?
Student must attempt all other aid eligibility first Ineligible for stipends Loan cannot create a credit balance Co-signer required on every loan and expected to pay if student defaults on payments Equal monthly cash payments due while in school Employees are not eligible Cannot be in default FPD and Chancellor approval for extenuating circumstances beyond $8000 cap STUDENT REQUIREMENTS
Payments must be current in order to receive disbursements Must apply for credit based loan and be declined with co- signer In the event a credit occurs, this will reduce the loan amount not the cash payment plan Required to notify Financial Planning if additional aid is awarded after being packaged with the loan $15 late fee $25 NSF fee Note- payments carry over into next academic year even if another CEF loan is not needed STUDENT REQUIREMENTS
Allows the student to attend when all other options have been exhausted No interest accrual while in school Debt forgiveness upon graduation 8% simple interest No origination fees No prepayment penalty INCENTIVES
Offer only as a last resort Explain the stipulations and expectations in detail Reduce the loan by what they can afford verses automatically providing minimum payment 100% complete documents Route paperwork properly and efficiently Seeking additional approval is rare, not the norm Pros and cons Think outside the box Discuss future planning and budgeting Provide ideas to reduce expenses in order to reduce the amount of the loan (ex: does it benefit to move from 6Q to 8Q? We should converse w/customer & ADM and if changed we must ensure new enrollment is received) Live with family or roommates Ask fact finding questions EXPECTATIONS OF FPC
Do not offer the minimum monthly payment simply because it reduces the out of pocket cash payments We need to reduce their need on the loan as much as possible The question should be “What can you afford?” Have the student and parent/cosigner complete a budget using an online tool such as http://www.bankrate.com/calculators/smart- spending/home-budget-plan-calculator.aspxhttp://www.bankrate.com/calculators/smart- spending/home-budget-plan-calculator.aspx This lists their total expenses and total income The difference will reflect what they can and can’t afford Print this out and attach this to the CEF packet for the FP file HOW MUCH CAN YOU AFFORD?
CEF Truth In Lending Borrower application Co-signer application Promissory note (requires notary if signature cannot be witnessed by FPC) Private loan self-certification (non expired) Cash payment plan schedule ACH form REQUIRED CEF PAPERWORK
Copy of ACH form no later than 3 business days before first payment Notify the office if loan approval is within 3 business days of first draft and direct students to make their first payment to the Business Office If using a card as method of payment, this information should be sent to the Business Office, not with Accounting or in the FP file Copy of cash payment schedule All original documents (except card information) A copy of the CEF packet should be provided to the borrower and cosigner. A full copy is retained in the FP file Credit Card information should never be stored outside of the Business Office Business OfficeAccounting ROUTING OF DOCUMENTS
TOOL FOR TIL AMORTIZATION WWW.AMORTIZATION-CALC.COM Box A= APR (8%) Box B= Loan term (determined by total gap) Box C= Total interest paid during full loan term Box D= Loan amount being financed Box E= Amount totals loan + total finance
List each estimated disbursement amount List each estimated disbursement date (generally week 9 each quarter) Do not forget to sign/date the notary box if borrower and co-signer are physically present and signing the application in your presence If all parties are not present, notary is required LOAN PROMISSORY NOTE
Section 2: Cost of attendance and estimated financial assistance A= total cost of attendance B= all other estimated financial aid assistance (minus CEF and cash payment plan) C= difference between A & B (shows need) Be sure to also include the back side of the form which lists sections 5 & 6 which provides definitions and the paperwork reduction notice for informational purposes Reminder- These forms do expire. This date is located in the top right corner PRIVATE LOAN SELF- CERTIFICATION
FIRST ACADEMIC YEAR BORROWER Student is left with a $2500 gap for their packaging How much would the monthly cash payments be for this student? $130 while in school How much in total cash payments? $1170 ($130 * 9 months) How much would the loan amount be for this student? $1330 ($2500 – $1170) How would you list these in the packaging and on the award letter? CEF fund source and cash payments are broken out per quarter in Campus Vue and on the award letter EXAMPLE 1
SECOND ACADEMIC YEAR BORROWER There was a $2500 gap in the first academic year There is a $7000 gap in the second academic year How much is the total gap? $9500 How much is the new monthly payment? $205 per month (Total gap of both is used to calculate payment) How much are the total payments in the second academic year? $1845 ($205 * 9) How much is the loan for the second academic year? $5155 (2 nd acyr gap – 2 nd acyr total payments) The 1 st year gap is taken out when figuring the 2 nd acyr loan- it is only used to determine the new payments EXAMPLE 2
You determine that the student needs a CEF loan of $8500. What should you do in this case? Since the loan must be <$8000 to not require Chancellor approval, we should include the difference in the student’s payment plan You determine that the student needs a CEF loan of $9000 but the student absolutely cannot afford the $1001 difference on top of their payment plan. What should you do in this case? Since the loan amount is over the $8000 academic year limit we should attempt to request the additional approval. WHAT WOULD YOU DO?
Interoffice Memo including the latest “clean” ISIR transaction ALL CEF documents Award letter PLUS loan showing denial and if flagged for reconsideration the COD notice showing the parent attempted to be reconsidered but was denied (if applicable) Alternative loan denial with co-signer Budget calculation as proof that they can make the payment Applicable Admissions paperwork and recommendation letter (ex: HS or college transcripts for grade review) REQUIRED FOR EXCEPTIONS
Did they link their taxes? Confirm the EFC. A high EFC will get push back We have the authority to self select them for FAFSA verification and obtain tax information (link or transcripts) Include the budget they completed and use this to justify that they can make the payment they are telling you they can afford Provide this information with the CEF packet Email to your Director of Financial Planning Director reviews the request and sends to Chancellor/President/VP of Enrollment for approval Result is sent to FPC Have the student sign their award letter PROVE THE STUDENT IS A GOOD RISK