Complete your FAFSA Entrance Counseling with this guide. This covers student loan types, repayment options, interest rates, borrower responsibilities, and financial aid terms.
Q: Direct Loan Program
Answer: – provided by US Department of Education
Q: Direct Loans
Answer: – “simple daily interest loans”, interest acrues daily- 10,000 loan with 6.8% interest rate acrues $1.86 a day
Q: Capitalized interest
Answer: – interest is acrued based on principal balance plus oustanding interest unpaid- 10,000 with 340 unpaid interest acrues $1.93 a day
Q: Master Promissory Note
Answer: – legally binding document I must sign before I receive loans- agree that I must repay loans- will need to save a copy to refer to when I begin to repay
Q: Half-Time Enrollment
Answer: – must be enrolled half-time (6 credits) to receive Direct Loans- may be a 6 month grace period before you must start repaying loans
Q: Acceleration
Answer: – a demand for immediate repayment if you enroll in less than 6 credit hours
Q: Free Money First
Answer: – finance education with free money first- explore grant programs (Map, Pell)- search for scholarships- school, state, other organized scholarships and grants- work part-time/work-study- using flexible federal repayment plans- use Direct Subsidized Loans (government pays interest)
Q: Direct Subsidized Loans
Answer: – undergrad students w/ need- interest rate is 4.45%- interest is paid by govt while you are enrolled half-full time, during the grace period, during deferment, and during certain periods of repayment under Income-Based and Pay As You Earn plans- may be subject to subsidy loss (https://studentloans.gov/myDirectLoan/directSubsidizedLoanTimeLimitation.action)- loan fees are 1.062%- MUST START MAKING PAYMENTS 6 MONTHS AFTER GRADUATION OR BELOW HALF-TIME ENROLLMENT
Q: Direct Unsubsidized Loans
Answer: – undergrad students w/ need- interest rate is 4.45%- you pay all interest during all periods- loan fees are 1.062%- MUST START MAKING PAYMENTS 6 MONTHS AFTER GRADUATION OR BELOW HALF-TIME ENROLLMENT
Q: Federal Perkins Loans
Answer: – Undergraduate and graduate or professional students with exceptional need- interest rate is 5.0%- govt pays interest while enrolled, for 9 months after graduation, and during deferment- must start paying 9 months after graduation
Q: Loan Limits
Answer: – First Year: 9,500 (no more than 3,500 in subsidized loans)- Second Year: 10,500 (no more than 4,500 subsidized)- Third Year and Beyond: 12,500 (no more than 5,500 subsidized)- Graduate or Professional: 20,500 (unsubsidized only)- Aggregate Limit: 57,500 for undergrad (23,000 subsidized)
Q: Manage your Expenses
Answer: – plan ahead- large, one time expenses such as books or tuition- loans only come a few times a year, so funds have to be budgeted over time
Q: Limit Expenses
Answer: – share housing- buy/rent used books- take public transit- lower cell phone bill- choose inexpensive entertainment options- only spend federal student aid money on tuition, room, book and supplies, etc.- IF YOU SPEND LOAN MONEY ON NON-SCHOOL ITEMS, THE UNPAID AMOUNT OF YOUR LOAN BECOMES DUE IMMEDIATELY