Application Procedures Eligibility for William D. Ford Federal Direct Loans Direct Loan Entrance Counseling Quiz How much money can I Borrow? Are there any limitations on the amount I can Borrow? When Should I Apply for a Loan? Do I have to sign a new Master Promissory Note each year? When do I receive my money? May I receive my money all at once? May I cancel all or part of my loan(s) after it has been disbursed? What are the interest rates for Federal Direct Loans? Am I charged interest while going to school? Is there a charge for processing a loan? When do I pay back my loan? How do I pay back my loan? Who manages my loan account? Can I find out how much I have borrowed? Where do I send my loan payments? What if I have trouble making my direct loan payments? What happens if I don't make my loan payments on time? What can I do if I am notified I am in default? Can I ever get out of repaying my loan? What are my rights as a Direct Loan Borrower? What are my responsibilities as a Direct Loan Borrower? Federal Direct Loan Program (FDL) http://www.ed.gov/DirectLoan Application Procedures A potential borrower MUST first file and receive a response from a FAFSA. Once the FAFSA is finalized, an applicant can apply for a William D. Ford Federal Direct Loan through the office of Student Financial Services by completing a Loan Origination Request Form. A counseling session and the completion of a Direct Loan Entrance Counseling are required for First-time borrowers. It is also highly recommended for continuing student to complete a Financial Awareness Counseling. In addition, once the loan is approved, a promissory note MUST be signed by the borrower in order to have the loan disbursed. [top] Eligibility for William D. Ford Federal Direct Loans To be eligible for a Federal Direct Loan, a student must be: A U.S. Citizen or Eligible Non-Citizen MUST be matriculated and registered for a minimum of 6 undergraduate credits for the semester(s) that you are applying for. (SUMMER / FALL / SPRING) Have at least a 2.0 cumulative G.P.A. unless it is your first semester at the college You must meet all eligibility requirements for Federal Financial Aid. In addition, you must demonstrate financial need for the loan. Financial need is demonstrated when your EFC, plus the loan amount, plus any other financial aid you are receiving adds up to less than your cost of attendance. [top] Direct Loan Entrance / Financial Awareness Counseling The Direct Loan Entrance / Financial Awareness Counseling can be completed on the internet at WWW.STUDENTLOANS.GOV . A Student loan Ombudsman office is available for assistance with loan problems at 1-877-557-2575 or http://ombudsman.ed.gov [top] How much money can I Borrow? Academic Level Dependent & Independent Students 1st Year – Fewer than 23 credits earned Up to $3,500 Per Year (Subsidized) 2nd Year – 24 or more credits earned Up to $4,500 Per Year (Subsidized) Undergraduate Aggregated Maximum No more than $23,000 Please note: If you are not eligible to borrow the full amount you request in Direct Subsidize loan funds, or you believe you need additional loan funds, you may be able to request some or all the balance as a Direct Unsubsidized Loan. If you are a dependent student, your parents may be able to take out a Direct PLUS Loan for you. [top] Are there any limitations on the amount I can Borrow? Yes. You may not borrow more than the cost of attendance at Hostos C.C. minus the EFC minus any other financial aid you receive. Before processing your loan request, the Financial Aid Office will calculate the amount of loan assistance you are eligible for. If you are a first-time borrower on or after July 1, 2013, there is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. This time limit does not apply to Direct Unsubsidized Loans or Direct PLUS Loans. If this limit applies to you, you may not receive Direct Subsidized Loans for more than 150 percent of the published length of your program. This is called your “maximum eligibility period.” Your maximum eligibility period is generally based on the published length of your current program. You can usually find the published length of any program of study in your school’s catalog. For example, if you are enrolled in a four-year bachelor’s degree program, the maximum period for which you can receive Direct Subsidized Loans is six years (150 percent of 4 years = 6 years). If you are enrolled in a two-year associate degree program, the maximum period for which you can receive Direct Subsidized Loans is three years (150 percent of 2 years = 3 years). Because your maximum eligibility period is based on the length of your current program of study, your maximum eligibility period can change if you change to a program that has a different length. Also, if you receive Direct Subsidized Loans for one program and then change to another program, the Direct Subsidized Loans you received for the earlier program will generally count toward your new maximum eligibility period. Certain types of enrollment may cause you to become responsible for the interest that accrues on your Direct Subsidized Loans when the U.S. Department of Education usually would have paid it. Lastly, if your period of enrollment is less than a full academic year, the amount of loan assistance you are entitled to may be less than the maximum amounts listed above. Furthermore, the Federal Government may restrict how frequently you may request or receive the maximum loan amount. Finally, the Office of Financial Aid may refuse to process your loan request or may otherwise reduce the amount of your loan. If so, a written explanation will be provided to the student. [top] When Should I Apply for a Loan? A student loan is a serious legal and financial obligation. You should apply for a loan only after careful consideration of all other options for financing your education. Think of borrowing as a commitment to pursuing and completing your education successfully. If you find you have to interrupt your studies, you could face having to repay your loan without the education you went into debt to obtain. Williams D. Ford Federal Direct Loan Applications will be available to students at the beginning of each academic year. Visit the Financial Aid Office for further information. [top] Do I have to sign a new Master Promissory Note each year? Once you have signed an electronic or paper Master Promissory Note for a Federal Direct Loan, you are not required to sign a new MPN in most instances. The note already on file will be used for subsequent year loan borrowing under the Federal Direct Loan program. You always have the option of resigning your MPN every time you borrow but it is not a requirement. PLEASE NOTE: if you previously signed an MPN that did not result in a disbursement of Direct Loan funds, you must resign your MPN for subsequent loan requests. [top] When do I receive my money? Please note, first-time borrows are not scheduled to receive a disbursement until at least 30 days of the term has passed. Every attempt is made to have the actual loan disbursement dates coincide with the anticipated disbursement dates on your Loan Disclosure Statement. However, this is not always possible. Your actual loan disbursement date depends on when your MPN is returned and acknowledged by the processor. Your disbursement will be either in the form of a check or as a direct deposit. If you have elected the direct deposit option for receiving financial aid disbursements, your disbursement will be credited to your direct deposit account on the scheduled disbursement week. Before crediting any loan funds toward your tuition or releasing any funds to you, the college will verify that you enrolled on at least a half-time basis. The Bursar's Office will calculate unpaid tuition and fee balances at the time your loan is disbursed. Deductions from your loan proceeds will be credited to your unpaid charges before you receive the balance of your funds. [top] May I receive my money all at once? No. You will receive your loan money in at least two installments, neither of which will be more than one-half of the loan total. For loans covering the full academic year, the second disbursement will be approximately 30 days after the start of the spring semester. For loans covering one semester only, the second disbursement will occur about midway through the semester. [top] May I cancel all or part of my loan(s) after it has been disbursed? You have up to 14 days after the loan has been first disbursed to cancel all or part of the loan and have it returned to the U.S. Department of Education. To cancel all or part of your loan you must come to the Financial Aid Office to fill out the William D Ford Federal Direct Loan Change Form. On that form you may indicate that you want to cancel or decrease your loan. You may cancel all or part of your loan by returning the funds yourself to the U.S. Department of Education within 120 days of the loan disbursement date. Contact the Direct Loan Servicing Center for guidance on how and where to return your loan money. You do not have to pay interest or the loan fee on the part of your loan(s) that you return within these time frames. [top] What are the interest rates for Federal Direct Loans? It varies. The interest rate for your loan is adjusted each year on July 1 and is calculated according to a federal formula. However, it will never exceed 8.25%. You will be notified as the interest changes throughout the life of the loan. If you wish to find out the current academic year interest rates for each loan, please come to the Financial Aid Office for more information. [top] Am I charged interest while going to school? SUBSIDIZED LOAN: “No”, the Federal Government supports or subsidizes the interest payments while you are in school and during any grace or deferment periods. You do not pay interest on a subsidized loan until your loan enters repayment. UNSUBSIDIZED LOAN: “Yes”, the Federal Government does not pay the interest charges. You are charged interest from the day your loan is disbursed until it is fully repaid, including all in-school, grace and deferment periods. You have the option of either paying the interest as you go or allowing it to accumulate. If you allow the interest to accumulate, it will be capitalized, or added to the principal amount of the loan, thereby increasing the total amount you will have to repay. [top] Is there a charge for processing a loan? Yes, there is a loan fee on all Direct Subsidized Loans and Direct Unsubsidized Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage varies depending on when the loan is first disbursed, as shown in the chart below. Loan Fees for Direct Subsidized Loans and Direct Unsubsidized Loans First Disbursement Date Loan Fee On or after Oct. 1, 2014, and before Oct. 1, 2015 1.073% On or after Oct. 1, 2015, and before Oct. 1, 2016 1.068% [top] When do I pay back my loan? You have a six month Grace Period after you graduate, leave school, or drop below half-time before you begin repaying your loan. During the grace period, you do not have to make payments on the Principle and you are not charged any interest. You can, of course, prepay any portion of your loan at any time without penalty. In addition, during the grace 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. [top] How do I pay back my loan? The Federal Direct Loan Program offers a choice of several repayment plans that differ in a number of ways to meet the needs of individual borrowers. You may choose any one of the plans and, in most cases, can change from one plan to another during your repayment period. There is no limit to the number of times you may switch from one plan to another. Each plan has certain features and conditions that you must carefully consider before deciding which plan to use. You will be able to receive information about these plans as well as other repayment options (such as loan consolidation) at your exit counseling. Repayment Plan Eligible Loans Monthly Payment and Time Frame Quick Comparison Standard Repayment Plan Direct Subsidized and Unsubsidized Loans Subsidized and Unsubsidized Federal Stafford Loans all PLUS loans Payments are a fixed amount of at least $50 per month. Up to 10 years You'll pay less interest for your loan over time under this plan than you would under other plans. Graduated Repayment Plan Direct Subsidized and Unsubsidized Loans Subsidized and Unsubsidized Federal Stafford Loans all PLUS loans Payments are lower at first and then increase, usually every two years. Up to 10 years You'll pay more for your loan over time than under the 10-year standard plan. Extended Repayment Plan Direct Subsidized and Unsubsidized Loans Subsidized and Unsubsidized Federal Stafford Loans all PLUS loans Payments may be fixed or graduated. Up to 25 years Your monthly payments would be lower than the 10-year standard plan. If you are a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans. FFEL borrower, you must have more than $30,000 in outstanding FFEL Program loans. For example, if you have $35,000 in outstanding FFEL Program loans, and $10,000 in Direct Loans, you can use the extended repayment plan for your FFEL Program loans, but not for your Direct Loans. For both programs, you must also be a "new borrower" as of Oct. 7, 1998. You'll pay more for your loan over time than under the 10-year standard plan. Income-Based Repayment Plan (IBR) Direct Subsidized and Unsubsidized Loans Subsidized and Unsubsidized Federal Stafford Loans all PLUS loans made to students Consolidation Loans (Direct or FFEL) that do not include Direct or FFEL PLUS loans made to parents Your maximum monthly payments will be 15 percent of discretionary income, the difference between your adjusted gross income and 150 percent of the poverty guideline for your family size and state of residence (other conditions apply). Your payments change as your income changes. Up to 25 years You must have a partial financial hardship. Your monthly payments will be lower than payments under the 10-year standard plan. You'll pay more for your loan over time than you would under the 10-year standard plan. If you have not repaid your loan in full after making the equivalent of 25 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven. You may have to pay income tax on any amount that is forgiven. Pay As You Earn Repayment Plan Direct Subsidized and Unsubsidized Loans Direct PLUS loans made to students Direct Consolidation Loans that do not include (Direct or FFEL) PLUS loans made to parents Your maximum monthly payments will be 10 percent of discretionary income, the difference between your adjusted gross income and 150 percent of the poverty guideline for your family size and state of residence (other conditions apply). Your payments change as your income changes. Up to 20 years You must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011. You must have a partial financial hardship. Your monthly payments will be lower than payments under the 10-year standard plan. You'll pay more for your loan over time than you would under the 10-year standard plan. If you have not repaid your loan in full after you made the equivalent of 20 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven. You may have to pay income tax on any amount that is forgiven. Income-Contingent Repayment Plan Direct Subsidized and Unsubsidized Loans Direct PLUS Loans made to students Direct Consolidation Loans Payments are calculated each year and are based on your adjusted gross income, family size, and the total amount of your Direct Loans. Your payments change as your income changes. Up to 25 years You'll pay more for your loan over time than under the 10-year standard plan. If you do not repay your loan after making the equivalent of 25 years of qualifying monthly payments, the unpaid portion will be forgiven. You may have to pay income tax on the amount that is forgiven. Income-Sensitive Repayment Plan Subsidized and Unsubsidized Federal Stafford Loans FFEL PLUS Loans FFEL Consolidation Loans Your monthly payment is based on annual income. Your payments change as your income changes. Up to 10 years You'll pay more for your loan over time than you would under the 10-year standard plan. Each lender's formula for determining the monthly payment amount under this plan can vary. If you can demonstrate that the above repayment plans cannot accommodate your particular economic circumstances, the US Department of Education may provide you with an alternate repayment plan. You may want to read the U.S. Dept of Education's Repaying Your Student Loans for more detailed information about repayment options. [top] Who manages my loan account? When you receive your Direct Loan, you will be contacted by your loan servicer (you repay your loan to the loan servicer). Your loan servicer will provide regular updates on the status of your Direct Loan, and any additional Direct Loans that you receive. To identify your assigned Direct Loan Servicer, you may visit the National Student Loan Data System (NSLDS) for students. (https://www.nslds.ed.gov/nslds/nslds_SA/) [top] How can I find out how much I have borrowed? You may access information about your student loan borrowing and other types of federal student aid you have received at the National Student Loan Data System (NSLDS) for Students. (https://www.nslds.ed.gov/nslds/nslds_SA/) [top] How do I Make a Payment? Your loan servicer handles all billing regarding your student loan, so you’ll need to make payments directly to your servicer. Each servicer has its own payment process and can work with you if you need help making payments. Visit their site to make a payment CornerStone MOHELA ESA/Edfinancial Navient FedLoan Servicing (PHEAA) Nelnet Granite State – GSMR OSLA Servicing Great Lakes Educational Loan Services, Inc. VSAC Federal Loans PLEASE NOTE: Sign up for automatic debit through your loan servicer, and your payments will be automatically taken from your bank account each month. As an added bonus, you get a 0.25% interest rate deduction when you enroll! [top] What if I have trouble making my direct loan payments? The first thing to do is to contact the Your Direct Loan Servicer. They will discuss with you the various options that may make it easier for you to manage your monthly payment schedule. You may be able to have your monthly payments lowered by changing to a different payment plan. Under some circumstances, such as returning to school, becoming unemployed or suffering economic hardship, you may qualify for a deferment. If granted a deferment, you will be able to suspend regular loan payments for a certain time. If your loan was first disbursed after July 1, l993, and you are not in default, refer to the Student Loan Deferment and Cancellation Summary for a list of available deferments. Being granted a deferment is not automatic. You must submit your request for a deferment in writing and continue to make your regular loan payments until the deferment is granted. You may view the approved conditions for obtaining a deferment and download the appropriate deferment form for your situation at the Direct Loan Servicing Online Deferment Forms page. If you don't qualify for a deferment, you may be able to request forbearance. If granted forbearance, you may be permitted to reduce or delay your regular payments for a time. Being granted forbearance is not automatic. You must submit your request for forbearance in writing and continue to make your regular loan payments until forbearance is granted. For more information you may visit Studentaid.ed.gov (https://studentaid.ed.gov/sa/repay-loans/deferment-forbearance) Finally, if you have a number of educational loans and have difficulty making payments on all of them, you may qualify for a Federal Direct Consolidated Loan. Loan consolidation allows you to combine multiple loan debts into just one monthly payment and can help lower your monthly repayment amount by extending the repayment period. [top] What happens if I don't make my loan payments on time? If you don't make your loan payments on time and don't contact the Direct Loan Servicer about it, you will be considered delinquent in repaying the loan. If you fail to make payments for six months, the loan will go into default. If this happens, you can be asked by the federal government to repay the entire loan immediately. You can be sued to collect the amount of the original loan, plus interest, court costs and other penalties. You will be reported to national credit bureaus and have your credit rating adversely affected. Your income tax refunds may be withheld and up to 15% of your wages can be garnisheed to collect the debt. If you are receiving Social Security, the federal government may withhold a portion of your benefits to pay your loan debt. Finally, your school records will be impounded and you will be prohibited from receiving any federal student aid at any school you wish to attend until the default is resolved. [top] What can I do if I am notified I am in default? Contact the Direct Loan Servicing Center. They will inform you under what circumstances you may have the default status rescinded and will discuss with you the possibilities for regaining your eligibility for financial aid and rehabilitating your loan. If you have a FFELP loan, you should contact your lender or guaranty agency about similar options available for restoring financial aid eligibility and rehabilitating your loan. You may regain eligibility for federal financial aid by making satisfactory payment arrangements on your defaulted loan with the loan servicer or guarantee agency handling your account. A satisfactory repayment arrangement is defined as making 6 consecutive voluntary monthly payments of an amount determined reasonable and affordable based on your financial circumstances. If you make 9 consecutive, voluntary, and on-time monthly payments of a reasonable and affordable amount under an agreement with the loan servicer or guarantee agency, you will qualify for loan rehabilitation. Loan rehabilitation provides you with a "second chance" by removing your student loan from default status, restoring financial aid eligibility and reinstating deferment privileges. [top] Can I ever get out of repaying my loan? There are certain exceptional circumstances, such as the borrower's death or permanent disability, which can result in the discharge or cancellation of a student loan. A discharge releases the borrower from all obligations to repay. There are also certain conditions under which your Direct Loan balance can be forgiven. Remember that your loan cannot be discharged because you didn't complete your program of study, didn't like the school or couldn't find a job after graduation. For more information about student loan forgiveness, visit studentaid.ed.gov (https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation) . [top] What are my rights as a Direct Loan Borrower? You have a right to: written information about your loan obligation, information on loan consolidation and refinancing, and a list of your rights and responsibilities as a borrower. a copy of your promissory note, and return of the note when your loan is paid in full. information, before you begin repayment, on interest rates, fees you might be charged and how they are collected, and the total balance owed on your loans. a loan repayment schedule that lets you know, before you begin repayment, when your first payment is due, the number and frequency of payments, and the amount of each payment. an explanation of default and its consequences. an explanation of the grace period, and of federal interest benefits, if you qualify for those benefits. pre-pay your loan at any time without penalty. a description of applicable deferment, forbearance and discharge provisions. [top] What are my responsibilities as a Direct Loan Borrower? You have a responsibility to: repay the loan according to the loan repayment schedule even if you don't receive a bill or repayment notice. notify the Direct Loan Servicing Center in advance if you will be late in making a payment or if you are unable to make payments. notify the Direct Loan Servicing Center of anything that affects your ability to repay, or your eligibility for a deferment, forbearance or cancellation. notify the College, if you are still enrolled, or the Direct Loan Servicing Center of any change in your name, address, Social Security Number or any change in your employer's name or address. notify the Direct Loan Servicing Center if you fail to enroll for the period covered by the loan, or if you graduate, withdraw from school, begin attending less than half-time, or transfer to another school. receive online or in-person entrance counseling before you are given your first loan disbursement and exit counseling before you leave school.