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Welcome Students! Chaffey College Financial Aid Direct Loan Workshop.

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Presentation on theme: "Welcome Students! Chaffey College Financial Aid Direct Loan Workshop."— Presentation transcript:

1 Welcome Students! Chaffey College Financial Aid Direct Loan Workshop

2 RECENT CHANGES TO THE LOAN PROCESS The Federal Stafford Loan process at Chaffey has been streamlined to facilitate awarding and funding your student loans. Chaffey College previously participated in the Federal Family Educational Loan Program (FFELP), but as of academic year, Chaffey has transitioned into the Direct Loan Program.

3 RECENT CHANGES TO THE LOAN PROCESS  You will not be required to select a lender because the Department of Education is the lender for Direct Loans.  You also do not have a choice to select another lender or a previous private lender because Chaffey participates in the Direct Loan program.  If you have previously borrowed under the FFELP loan program, you may have a lender and/or guarantor who manages your loans. If that is the case, you will be required to report to your previous lender and the Department of Education regarding changes, such as enrollment, deferment, etc.

4 RECENT CHANGES TO THE LOAN PROCESS  New Loan Request Form  Annual loan amounts have increased  Important information has been added to assist you in managing your loans.

5 Information and Application Process To be eligible for a Federal Stafford Loan : □ Complete the Free Application for Federal Student Aid (FAFSA) □ Maintain Satisfactory Academic Progress □ Enroll in at least six (6) units per semester in a program leading to a degree/ certificate at Chaffey College and/or transfer to a university. □ Not be in default on any student loan or owe a refund on Title IV Funds □ Not be over your aggregate limits for federal student loans. □ Before you can be considered for a Stafford Loan, you must be considered for other Title IV funds.

6 WHAT IS IN MY LOAN PACKET? 1. Loan Check List Loan Check List Complete Loan Application Worksheet. Complete online Master Promissory Note (MPN) at: Print confirmation page after completing MPN. Complete online Entrance Counseling with Entrance Test at: Click on “Entrance and Exit counseling” logo. Select "Go" under Entrance counseling. Select "Tutorial and Quiz (New Session)" under the Stafford Loan option. Print confirmation page after completing the entrance counseling, After receiving your first disbursement of loan funds, you must complete Online Exit counseling with Exit Test at: And Submit copy of exit test to Financial Aid Office. **IMPORTANT NOTICE: Student must complete Exit Test in order to receive second disbursement of federal student loan.** Typical processing time for Direct Stafford Loans is 5-6 weeks after all requested loan information has been received and your financial aid file has been reviewed. Submit the completed loan application worksheet, along with a copy of MPN confirmation, and copy of entrance counseling confirmation to the Financial Aid office within 30 days of attending Loan Workshop or loan will not be processed. processed. Direct Loan Check List 1. Complete Loan Application Worksheet. 2. Complete online Master Promissory Note (MPN) at: Print confirmation page after completing MPN.. You have 30 days (from the date of your Loan Workshop) to submit the following documents together to the FA Office: 1. Completed Loan application worksheet 2. Copy of confirmation of online MPN. 3. Copy of confirmation of online entrance counseling. **All three documents must be turned in together in order to be submitted to FA Office. Incomplete packets or packets that exceed the 30 days will not be processed. Unfortunately, there are no exceptions.**. Online Exit counseling complete with Exit Test completed after student has received first disbursement. Completed online at: Once Exit Test is completed, submit copy of confirmation to FA Office. **IMPORTANT NOTICE: Student must complete Exit Test in order to receive second disbursement of federal student loan.** Typical processing time for Direct Stafford Loans is 5-6 weeks after all requested loan information has been received and your financial aid file has been reviewed.. Complete online Entrance Counseling with Entrance Test at: Click on “Entrance and Exit counseling” logo. Select "Go" under Entrance counseling. Select "Tutorial and Quiz (New Session)" under the Stafford Loan option. Print confirmation page after completing the entrance counseling. Direct Loan Check List 1. Complete Loan Application Worksheet. 2. Complete online Master Promissory Note (MPN) at: Print confirmation page after completing MPN.. You have 30 days (from the date of your Loan Workshop) to submit the following documents together to the FA Office: 1. Completed Loan application worksheet 2. Copy of confirmation of online MPN. 3. Copy of confirmation of online entrance counseling. **All three documents must be turned in together in order to be submitted to FA Office. Incomplete packets or packets that exceed the 30 days will not be processed. Unfortunately, there are no exceptions.**. Online Exit counseling complete with Exit Test completed after student has received first disbursement. Completed online at: Once Exit Test is completed, submit copy of confirmation to FA Office. **IMPORTANT NOTICE: Student must complete Exit Test in order to receive second disbursement of federal student loan.** Typical processing time for Direct Stafford Loans is 5-6 weeks after all requested loan information has been received and your financial aid file has been reviewed.. Complete online Entrance Counseling with Entrance Test at: Click on “Entrance and Exit counseling” logo. Select "Go" under Entrance counseling. Select "Tutorial and Quiz (New Session)" under the Stafford Loan option. Print confirmation page after completing the entrance counseling. Direct Loan Check List 1. Complete Loan Application Worksheet. 2. Complete online Master Promissory Note (MPN) at: Print confirmation page after completing MPN.. You have 30 days (from the date of your Loan Workshop) to submit the following documents together to the FA Office: 1. Completed Loan application worksheet 2. Copy of confirmation of online MPN. 3. Copy of confirmation of online entrance counseling. **All three documents must be turned in together in order to be submitted to FA Office. Incomplete packets or packets that exceed the 30 days will not be processed. Unfortunately, there are no exceptions.**. Online Exit counseling complete with Exit Test completed after student has received first disbursement. Completed online at: Once Exit Test is completed, submit copy of confirmation to FA Office. **IMPORTANT NOTICE: Student must complete Exit Test in order to receive second disbursement of federal student loan.** Typical processing time for Direct Stafford Loans is 5-6 weeks after all requested loan information has been received and your financial aid file has been reviewed.. Complete online Entrance Counseling with Entrance Test at: Click on “Entrance and Exit counseling” logo. Select "Go" under Entrance counseling. Select "Tutorial and Quiz (New Session)" under the Stafford Loan option. Print confirmation page after completing the entrance counseling. Direct Loan Check List 1. Complete Loan Application Worksheet. 2. Complete online Master Promissory Note (MPN) at: Print confirmation page after completing MPN.. You have 30 days (from the date of your Loan Workshop) to submit the following documents together to the FA Office: 1. Completed Loan application worksheet 2. Copy of confirmation of online MPN. 3. Copy of confirmation of online entrance counseling. **All three documents must be turned in together in order to be submitted to FA Office. Incomplete packets or packets that exceed the 30 days will not be processed. Unfortunately, there are no exceptions.**. Online Exit counseling complete with Exit Test completed after student has received first disbursement. Completed online at: Once Exit Test is completed, submit copy of confirmation to FA Office. **IMPORTANT NOTICE: Student must complete Exit Test in order to receive second disbursement of federal student loan.** Typical processing time for Direct Stafford Loans is 5-6 weeks after all requested loan information has been received and your financial aid file has been reviewed.. Complete online Entrance Counseling with Entrance Test at: Click on “Entrance and Exit counseling” logo. Select "Go" under Entrance counseling. Select "Tutorial and Quiz (New Session)" under the Stafford Loan option. Print confirmation page after completing the entrance counseling. Direct Loan Check List 1. Complete Loan Application Worksheet. 2. Complete online Master Promissory Note (MPN) at: Print confirmation page after completing MPN.. You have 30 days (from the date of your Loan Workshop) to submit the following documents together to the FA Office: 1. Completed Loan application worksheet 2. Copy of confirmation of online MPN. 3. Copy of confirmation of online entrance counseling. **All three documents must be turned in together in order to be submitted to FA Office. Incomplete packets or packets that exceed the 30 days will not be processed. Unfortunately, there are no exceptions.**. Online Exit counseling complete with Exit Test completed after student has received first disbursement. Completed online at: Once Exit Test is completed, submit copy of confirmation to FA Office. **IMPORTANT NOTICE: Student must complete Exit Test in order to receive second disbursement of federal student loan.** Typical processing time for Direct Stafford Loans is 5-6 weeks after all requested loan information has been received and your financial aid file has been reviewed.. Complete online Entrance Counseling with Entrance Test at: Click on “Entrance and Exit counseling” logo. Select "Go" under Entrance counseling. Select "Tutorial and Quiz (New Session)" under the Stafford Loan option. Print confirmation page after completing the entrance counseling. Step 1: Complete a FAFSA! (Free Application for Federal Student Aid)

7 WHAT IS IN MY LOAN PACKET? 2. Online Master Promissory Note Process

8 WHAT IS IN MY LOAN PACKET? Completed online at Follow all steps in the MPN Process handout given.

9 WHAT IS IN MY LOAN PACKET? 3. Loan Request Form

10 Online Entrance and Exit Counseling  Both completed online at: ww.dlenote.ed.gov  Click on “Entrance and Exit counseling” logo  Select “Go” under Entrance Counseling.  Select “Tutorial and Quiz (New Session)” under the Stafford Loan option. **Students must pass entrance counseling to receive a federal student loan.

11 Where can I find these websites?

12 IMPORTANT INFORMATION After completing your Loan Request Form, online MPN and entrance test, you must submit completed Loan Request Form to the Financial Aid Office. Typical processing time is 5-6 weeks after all loan information has been received and your financial aid file has been reviewed. Please complete the exit test after you receive your first disbursement.

13 TYPES OF LOANS Subsidized Loans T he government makes the interest payment on your student loan while you are in school, your grace period or deferment Unsubsidized Loans You are always responsible for interest payments, even while in school.

14 Loan Limits and Interest Rate The Maximum annual subsidized loan limits: First Year ( completed units) $3,500 Second Year (30 or more completed units) $4,500 Subsidized Loan Interest Rate is 5.6% fixed

15 Loan Limits and Interest Rate The maximum annual unsubsidized loan amounts: DEPENDENT STUDENTS First Year ( completed units) $2,000 Second Year (30 or more completed units) $2,000 INDEPENDENT STUDENT First Year ( completed units) $6,000 Second Year (30 or more completed units) $6,000 Interest Rate is 6.8% fixed

16 LIFETIME AGGREGATE AMOUNTS Dependent Undergraduate Student $31,000 (no more than $23,000 of which may be subsidized) Independent Undergraduate Student $57,500 (no more than $23,000 of which may be subsidized)

17 LOAN ORIGINATION FEES □ Direct loans have an origination fee of 1.5%. □ However, your loan funds will be reduced by only.5% because Direct Loans offer a rebate incentive of 1.0%. □ If you do not repay your loan funds on time, the 1.0% rebate will be added to your loan balance.

18 REPAYMENT During your grace period your lender will send you repayment and disclosure statement listing your:  Monthly payment  Payment due dates  Length of repayment  Current interest rate

19 REPAYMENT If you don't hear from your lender, call and update them on your address and other information, such as new telephone number or name change.  For Stafford Loans, your grace period begins the day after you graduate, withdraw, or drop to less than half-time status. The length of your grace period depends on the type of loan you have, but most are six months. Your first loan payment will be due approximately 30 to 45 days after your grace period ends. Be proactive about loan repayment. Even if your lender doesn't notify you, you're still responsible for making timely loan payments.

20 REPAYMENT EARLY REPAYMENT  You can prepay all or part of your loan at any time, without penalty. In fact, it's to your advantage to pay off your loans as quickly as possible to reduce interest costs. REPAYMENT PERIOD  Generally, you're entitled to a minimum of five years and a maximum of 10 years to repay your loan (as long as you meet the minimum monthly payment of $50). In some cases the minimum payment will pay the loan off in less than five years

21 GRACE PERIOD ONE GRACE PERIOD PER LOAN  When you drop below half-time enrollment status you have six months before you're required to make monthly payments. This payment-free time is called a grace period. During this time, no principal payments are due. If you have a subsidized loan, the government pays the interest. If you have an unsubsidized loan, you're responsible for interest payments.  You only receive one grace period per loan. Once your grace period expires, you can't get it back.

22 GRACE PERIOD RENEWAL  If, prior to the end of your grace period, you re- enroll at an eligible school on at least a half-time basis, your Stafford Loan will return to its former in-school status and repayment will again be postponed. The next time you leave school your grace period will start over.  If you don't re-enroll during your grace period, repayment will begin as scheduled. At this point in time, you will not be eligible for an additional grace period on your loan. However you may qualify for loan deferment.

23 LOAN STATUS You are responsible for notifying your lender When you have returned to school. You may view your loan and enrollment status by accessing NSLDS at:

24 What Is A Student Loan Deferment? When you are unable to repay a loan, you may go into deferment. When you are in deferment, you are not required to make payments on your loan. Deferment is a temporary postponement of payments.

25 DEFERMENTS  During deferment, you don't have to make any principal payments on your loan.  If you have a subsidized Stafford Loan, interest payments on the loan will be made for you by the federal government.  If you have an unsubsidized Stafford Loan, you're responsible for interest payments during periods of deferment.

26 How to Qualify for a Deferment?  Must apply by requesting a deferment from each lender.  Please note: If you have loans from different lenders, you must apply for a deferment from each lender.

27 How to Qualify for a Deferment?  Deferment must be approved by lender. You will receive notification from lender of approval or denial. If not, follow up by contacting lender and submitting additional documents if needed.  Deferments are offered for a limited time, depending on the type of deferment.

28 TYPES OF DEFERMENT  Unemployment You may qualify for an unemployment deferment if you're looking for but unable to find employment. The deferment can last for up to three years. You must provide documentation to your lender that you are actively seeking employment.

29 DEFERMENT OPTIONS  In-School You may qualify if you're enrolled at least half-time in an eligible school. There is no time limit on this deferment.  Rehabilitation You may qualify if you're participating in an approved rehabilitation program. There is no time limit on this deferment.

30 DEFERMENT OPTIONS  Economic Hardship You may qualify if you're constrained by severe financial circumstances. The deferment is limited to three years.  If none of the deferment options above match your circumstances, contact your lender.

31 FORBEARANCE If you don't qualify for deferment, you may be able to work out a special arrangement with your lender called a forbearance.  During periods of forbearance you can reduce or postpone monthly payments.  You are responsible for any interest that accrues on your subsidized or unsubsidized Stafford Loans during this time. NOTE: Forbearances are granted at the lender‘s discretion.

32 DELINQUENT LOANS  A delinquency period begins on the first day after you miss a payment.  Collection efforts by the lender begin immediately.  If you are having trouble making payments, contact your lender

33 DELINQUENT LOANS  If you are delinquent of your student loans, it will show up on your credit report.  Whether or not you receive notice your loans are in repayment, you must make a payment by scheduled due date.  If the delinquency goes on for nine months, your loan holder may declare you in default.

34 DEFAULT If you do not make any payments on your federal student loans for days and do not make special arrangements with your lender to get a deferment or forbearance, your loans will be in default. Defaulting on your student loans has serious consequences.

35 CONSEQUENCES OF DEFAULT  You may no longer be eligible for future federal or state aid at any institution.  Your loan may become immediately due and payable.  Your loan default status is reported to all major credit agencies.  Your income tax refunds might be withheld and applied to your loan balance.  Your state-issued professional license or certificate may be withdrawn.

36 CONSEQUENCES OF DEFAULT  Your wages could be garnished.  Legal action may be taken against you to enforce repayment (for which you must pay the court costs and attorney fees).  Collectors will continue collection activities until your account is paid in full (for which you must pay additional interest charges and collection costs).  You could lose access to monthly repayment options such as loan consolidation.

37 GUIDE TO MANAGE LOANS  You must let your lender or servicer know if you change your address, name, Social Security number, telephone number, enrollment status or school.  Keep all important documentation about your student loan.  Make your monthly payments on time and build a good credit rating.  If you're working with several different lenders, consider loan consolidation.

38 GUIDE TO MANAGE LOANS  View your loan information at:  Name of your current lender  Outstanding loan balances  Information on Pell Grants  Loan and enrollment status  To access the NSLDS Student Access Web site you must have a pin number. If you do not remember your pin number, you may acquire a duplicate pin at:

39 GUIDE TO MANAGE LOANS  The National Student Clearinghouse offers services to assist students to track their student loans and obtain verification of their in-school status :  Enrollment Verify Online service that allows you to obtain enrollment verification certificates to provide to credit issuers, health insurance companies, student housing providers, and others.  Loan Deferment Processing The Clearinghouse provides automatic and paper-based deferment processing for students of its participating schools.

40 GUIDE TO MANAGE LOANS  Access Direct Loans to manage your loan account at:

41 End of Financial Aid Loan Workshop Thank you for attending! Any Questions?


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