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Since loans always require repayment, students are encouraged to
take a loan only after exploring all other funding possibilities. Please
read the following information and answer the questions asked as you go a
long. You will be asked to submit your answers when you are finished. In
addition, you will need to complete and print the Certification Page at the
end of the session and bring it to our office.
Do some Personal Financial Planning before incurring
debt (i.e., student loans).
Ask yourself these questions:
- Is it really a good idea to borrow at this time?
- Have I explored all other options?
- Have I examined my budget and cut expenses wherever
possible?
- Have I considered a roommate to share expenses?
- What is my salary expected to be upon
graduation?
- Will I be able to afford loan payments?
Check out the job market for your field to see what you
could reasonably expect to earn upon graduation. Be realistic!
Borrow only what you need, even if you are eligible for
more.
You must be enrolled at least half-time in order to be
considered for student loans.
In addition, all students must maintain Satisfactory
Academic Progress (SAP). Please read the SAP Policy and ask
questions if there is anything you do not understand. When you are
finished reading the SAP Policy, you will need to return to this page
(press the "BACK" button on your browser) to complete the LIS.
Q 1: If I enroll in 24 credits during the
academic year, how many credits must I complete in order to
maintain Satisfactory Academic Progress?
12
16
20
24
Q 2: What is the minimum level of enrollment
required in order to receive a student loan?
Loan Programs
There are two types of loans available for attendance at
Estrella Mountain Community College:
- Federal Stafford Subsidized Loans are based on need.
The government pays the interest while you are enrolled in
school at least half-time, and during the six month grace
period.
- Federal Stafford Unsubsidized Loans are not based on
need. The interest accrues from the time the money is disbursed
to the you. You can either make interest payments as they are
incurred, or let the interest accrue and have it capitalized
until you go into repayment. Although you are not
required to make payments on the principal, keep in mind that
you will pay more over the life of the loan if you do not pay
the interest as it accrues.
Q 3: Which type of Stafford Loan are you
responsible for the accruing interest from the day the loan is
disbursed to you?
Subsidized Stafford Loan
Unsubsidized Stafford Loan
Subsidized Loan Maximums (per
year)
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FRESHMAN*:
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$2625
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SOPHOMORE*:
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$3500
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The above limits are for Subsidized Stafford Loans. These
maximums may decrease if you are in your last semester of your
program, if you are not enrolled full-time, or if you do not have
enough "need" for the full amount to be subsidized. The school can
reduce the loan maximum, or even refuse to certify an application
altogether, for any other reason as long as it provides you with
the reason.
*A freshman is defined as a student who has completed less then
30 credit hours; a sophomore is a student who has completed more
than 30 credit hours.
Cumulative Loan Maximum
The maximum amount a dependent undergraduate student can borrow
is $23,000.
The maximum amount an independent undergraduate student can
borrow is $46,000.
The maximum amount a graduate of professional student can
borrow is $138,500 (only $65,500 may be in subsidized loans).
Interest Rates
JULY 1, 1993 - PRESENT: VARIABLE, NOT TO EXCEED 8.25%
Your lender will keep you informed as to the current interest
rate of your loan(s).
If you had loans that were first disbursed before July 1, 1993,
the interest rate on these loans may be different. Check with the
lender or agency that holds your loan.
Loan Fees
You will be charged a fee of up to 4% on all loans. These fees
are subtracted from the loan before it is disbursed and repayment
of the full amount of the loan is required. A portion of this fee
goes to the federal government to help reduce the cost of the
loans. Another portion of this fee is insurance against
default.
Also, if you don't make payments when they are scheduled, you
may be charged collection costs and late fees.
Q 4: Loan fees are deducted from my loan before
I receive the disbursements.
T F
Multiple Disbursement
Federal regulations require that loans be released in at least
two disbursements. For loans which cover Fall and Spring semester,
one disbursement will occur during Fall, and one during Spring.
For a loan that covers only one semester, the first half will be
disbursed at the beginning of the semester, and the other in the
middle of the semester.
Freshmen who have not borrowed at EMCC before are
required to wait until 30 days after the semester begins to
receive their first disbursement.
In addition, if you enroll in classes with late starting dates,
your disbursements may be delayed.
Q 5: Regulations require that loans be released
in at least how many disbursements?
1 2 3 No
minimum
Q 6: How many days after the beginning of the
semester must new freshmen borrowers wait to receive their first
disbursement?
10 20 30 40
Repayment Options
Required repayment, including interest, begins following your
grace period.
There are three types of repayment plans:
- Under the Standard Repayment Plan, you will be
required to make a minimum monthly payment of $50/month,
depending on the amount you owe when you enter repayment. You
will have a maximum of 10 years to repay. This plan will be
automatically selected for you if you do not request one of the
others.
- The Graduated Repayment Plan starts you out with a
lower monthly payment, which will gradually increase, allowing
you 10 years to repay the loan.
- The Income Sensitive Repayment Plan provides you
with a payment based on your income. The minimum payment must
at least pay the monthly interest on the loan. Income will be
verified annually.
Q 7: When I begin repayment, I have a choice of
repayment options.
T F
Loan Consolidation
Loan consolidation allows you to take out one loan to pay off
all of your old student loans. Do not confuse loan consolidation
with "combining like loans" to achieve one monthly payment.
Grace Period
Subsidized and Unsubsidized Stafford Loans grant you a period
of time after you leave school or drop below half-time status
during which you do not have to begin making payments. During the
grace period on Unsubsidized Stafford Loans, you are responsible
for making interest-only payments or you may have accrued interest
added to the principal of your loan. Repayment of the loan
principal is postponed until the end of the grace period. The
"grace period" is a cushion to allow you to become established in
your employment and living situation after leaving school.
Q 8: When do I have to begin repayment on my
student loan?
Immediately
6
months after disbursement
6
months after I am no longer attending school 1/2 time
Never
Deferment
A deferment allows you to temporarily postpone payment of your
loan. Deferments are when payments of principal is postponed and
interest payments (Subsidized loans only) are made by the federal
government.
For new borrowers on or after July 1, 1993, the types of
deferments available are:
- At least half-time study at an eligible school.
- Study in an eligible graduate fellowship program
- Enrollment in an approved rehabilitation training program
for the disabled
- During times of economic hardship - up to three years
- Unemployment - up to three years
You must request a deferment on a form provided by the lender,
and must provide whatever documentation the lender requests. You
must file deferments on time. If a loan is in default, you will
not eligible for any deferments for that loan.
For students with loans disbursed prior to July 1, 1993, refer
to your promissory note for deferment conditions, or contact your
lender.
Q 9: Deferments are granted automatically.
T F
Forbearance
Forbearance is a temporary cessation of payments, making
smaller monthly payments, or an extension of time for making
payments. Interest continues to accrue during periods of
forbearance. Accrued interest may be paid or will be capitalized
at the end of the forbearance period.
Forbearance is not automatic, you must request it from your
lender.
Cancellation
You may have your loan canceled if you meet one or more of the
following criteria:
- Total and permanent disability
- If you are unable to complete your program of study because
the school closed (under certain circumstances)
- Bankruptcy - in very rare circumstances
- Upon your death, your family would not be required to repay
your loan.
You MAY NOT avoid repaying your loan(s) because you:
- did not complete the program(s) of study
- did not like the school
- did not obtain employment after completing the program
Q 10: If I withdraw from EMCC, or if I do not
complete my education at EMCC, I do not have to pay back my
loan.
T F
Consequences of Delinquency and
Default
Delinquency and default can lead to:
- Loss of easy monthly payment options
- Loss of deferment and forbearance options
- Loss of eligibility for Federal Student Aid
- Reported to credit bureau (negative credit rating for seven
or more years)
- Loss of employment opportunities for federal and some state
and local agencies
- Withholding of federal and/or state income tax refunds
- Garnish wages
- Late charges, including attorney's fees and court
costs
- Repossession of personal property
- Lawsuit filed against you
DON'T LET THIS HAPPEN TO YOU! Contact your lender or guarantee
agency if you're having any problems.
AVOID DEFAULT
Q 11: The consequences of default are:
Student's Responsibilities
If you don't repay your loan on time, or according to the terms
in your promissory note, you may go into default.
You must keep your lender and school informed about changes in
status, enrollment, or financial condition:
- You must make payments on your loan, even if you don't
receive a bill or repayment notice.
- If you apply for a deferment or forbearance, you must
continue to make payments until you are notified that the
request has been granted.
- You must notify the appropriate representative that manages
your loan when you graduate, withdraw from school, or drop
below half-time status; change your name, address, or Social
Security Number; or transfer to another school.
- You must attend an Exit Counseling Session before you leave
school.
Document Retention
It is imperative that you read and save all loan documents.
Keep them in a safe place so that you can access them quickly and
refer to them as needed. At an absolute minimum, retain all
documents referenced here:
- Loan application
- Promissory Note
- Notice of Disclosure
- Record of any loan checks received
- Loan repayment schedule
- Requests for deferment and/or forbearance
- Any correspondence with lender or servicer
- Record of all payments made
- Telephone number and address of lender and servicer
Q 12: I must repay my loan.
T F
THIS IS A LOAN...IT
MUST BE REPAID!
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