WILLIAM D. FORD DIRECT LOAN PROGRAMS
The Eastman School of Music participates in the Direct Student Loan Program, the Direct PLUS Loan Program and the Direct Graduate PLUS Loan Program. All Federal Direct Loans borrowed to cover costs while attending Eastman are borrowed through the Direct Lending process.
New Federal Loan Guidelines effective for the 2012-2013 academic year
- Graduate students will no longer be eligible for Federal Direct Subsidized Loans.
- The Origination fee on all Federal Direct (Subsidized & Unsubsidized) Loans will be 1.0%.
- The Origination fee on all Federal PLUS & Graduate PLUS Loans will be 4%.
- The Interest Subsidy for new Federal Subsidized Loans during the grace period will be eliminated.
Application Process
All Federal Direct Loan eligibility (Student Loans (subsidized or unsubsidized), Parent PLUS Loan, Graduate PLUS Loan) will be offered initially in the student’s Financial Aid Package.
Direct Student Loans (subsidized or unsubsidized) are low-interest educational loans for students attending school at least half time (6 credits). The U.S. Department of Education is the lender. Eligibility for a Direct Subsidized Loan is based on financial need as determined by federal regulations and the information provided on the FAFSA. The interest on a subsidized loan will not accrue while student is in school. A student’s need is not a factor for a Direct Unsubsidized Loan and a student can qualify regardless of family income. The interest on an unsubsidized loan will accrue while a student is in school.
To begin the Federal Direct Student Loan process, a student must return a signed copy of the Financial Aid Award Letter to the Eastman Financial Aid Office. Further instructions about additional requirements will be emailed to the student once all Federal Direct Student Loans are originated. All Federal Direct Student Loans are originated in early August before the start of the semester. An origination fee is deducted from the loan at the time of disbursement.
A Federal Direct PLUS Loan is a credit-based loan that allows a parent to borrow up to the cost of attendance minus other financial aid awarded. The fixed interest rate is 7.9%. Repayment on the principal can be deferred while the student is enrolled in college, but the completion of a PLUS Loan Deferment Form is required. This form is obtained from the Federal Loan Servicer of the PLUS Loan.
A Federal Direct Graduate PLUS Loan is a credit-based loan that allows a graduate student to borrow up to the cost of attendance minus other financial aid awarded. The fixed interest rate is 7.9%. Repayment on the principal can be deferred while the graduate student is enrolled in college, but the completion of a Graduate PLUS Loan Deferment Form is required. This form is obtained from the Federal Loan Servicer of the Graduate PLUS Loan.
To apply for Parent PLUS Loan and Graduate PLUS Loan, an additional application is required. A paper or online application can be completed. Further instructions about additional requirements will be emailed to the parent or graduate student once the PLUS Loan or Graduate Loan has been originated. All Federal PLUS Loans or Graduate PLUS Loans, which were applied for via a paper application, will be originated in early August before the start of the semester. An origination fee is deducted from the loan at the time of disbursement.
Online PLUS Loan or Graduate PLUS Loan Borrowers should avoid applying any earlier than 90 days before the start of the semester. Credit approvals are only viable for that amount of time. If the loan is applied for too early, the credit approval will become invalid and a new application will need to be submitted online for processing.
Additional Requirements
Entrance Counseling Session – (studentloans.gov)
Required of all first-time student borrowers who are offered Federal Direct Student Loans or Graduate PLUS Loans as part of their Financial Aid Package.
Master Promissory Note for Student Direct Loan Borrowers – (studentloans.gov)
Required of all first-time student borrowers who are offered a Federal Direct Loan as part of their Financial Aid Package. You will need your Department of Education PIN (www.pin.ed.gov) (same as your FAFSA PIN) to complete this promissory note on-line.
Master Promissory Note for Parent PLUS Borrowers – (studentloans.gov)
Required of all first-time parent borrowers who have applied (paper or online) and been approved for a Federal PLUS Loan. Parent borrowers will need a Department of Education PIN (www.pin.ed.gov) (same as your FAFSA PIN) to complete this promissory note on-line.
Master Promissory Note for Graduate PLUS Borrowers – (studentloans.gov)
Required of all first-time graduate student borrowers who have applied (paper or online) and been approved for a Federal Graduate PLUS Loan. Parent borrowers will need a Department of Education PIN (www.pin.ed.gov) (same as your FAFSA PIN) to complete this promissory note on-line.
Required of all parent borrowers who anticipate a credit balance on their son or daughter’s account as a result of borrowing the PLUS loan. This form should be returned to the Bursar’s Office.
Exit Counseling Session - (studentloans.gov)
Required of all Student Federal Direct Loan borrowers at the time they graduate, drop below half-time status, take a leave of absence or withdraw from the Eastman School of Music. Students graduating at the end of the spring semester will be invited, via email, to a group Exit Counseling Information Session in April. All other students will both be emailed and mailed Exit Counseling information at the time of their status change. Students who wish to schedule an individual exit session or who have questions regarding the Exit Counseling Session Requirement should contact the Financial Aid Office. Please note that those students who fail to complete an Exit Counseling Session will have a hold placed on their transcript.
FEDERAL PERKINS LOAN PROGRAM
The Federal Perkins Loan is a federally funded loan administered by the Eastman School of Music Financial Aid Office. This loan has a fixed interest rate of 5% and no origination fees. The Perkins Loan is subsidized meaning that the loan will not accrue interest the student is in school. Eligibility for the Perkins Loan is based on financial need as determined by federal regulations, information provided on the FAFSA, and fund availability.
Entrance Interview Session for Perkins Loan Borrowers
Required of all first-time student borrowers who are offered a Federal Perkins Loan as part of their Financial Aid Package. Perkins Loan borrowers will be notified, via email, when to complete the Entrance Interview Session.
Master Promissory Note for Perkins Loan Borrowers
Perkins Loan Master Promissory Notes are completed online for all first-time student borrowers. Perkins Loan borrowers will be notified, via email, when to complete the Perkins Loan Master Promissory Note.
Truth in Lending Statement
A Truth in Lending Statement is required of all Perkins Loan borrowers on a yearly basis. This document will be printed in August and available to students in the Eastman Financial Aid Office.
Exit Interview Session for Perkins Loan Borrowers
Required of all Perkins Loan borrowers at the time they graduate, drop below half-time status, take a leave of absence or withdraw from the Eastman School of Music. Students who graduate at the end of the spring semester will be invited, via email, to a group Exit Counseling Information Session in April. All other students will both be emailed and mailed Exit Interview information at the time of their status change. Students who wish to schedule an individual exit session or who have questions regarding the Exit Interview Session Requirement should contact the Financial Aid Office. Please note that those students who fail to complete an Exit Interview Session will have a hold placed on their transcript.
PRIVATE LOANS
Some students and families choose to borrow a private loan to cover a portion of the cost of education not already paid for by scholarships and Federal grants/loans. We encourage students and parents to exhaust all Federal loan options prior to applying for a private loan. The Federal loan programs generally offer lower interest rates and fees than private loans.
If a student chooses to pursue a private loan, we recommend comparing the costs associated with various loans before completing an application. Interest rates, fees, repayment periods, and other benefits can vary significantly between loans. Often these loans are based on credit-worthiness and approvals are not automatic. The FinAid.org website provides some comparative information regarding private loans. When selecting a loan through a comparative website, be sure to go to the lender’s website to ensure the most up-to-date information about the loan.
The Eastman School of Music does not maintain a preferred lender list. As such, the University has no agreements or relationships with any lenders and does not receive any benefit, financial or otherwise, from the use of private loans by students. For more information on the University’s policies, please see our Student Loan Code of Conduct and Policy on Private Lending.
New Alternative Loan Application Requirements
Since February 2010, all private educational lenders are required to send three disclosure statements as well as a self-certification form to all borrowers. The borrower must complete and return these statements to the lender before their application process will be complete and allow for any loan funds to be sent to the student’s school.
Disclosures
The lender will send three disclosures to the borrower.
- Application Disclosure — sent once the lender receives the loan request from the student
- Approval Disclosure — sent once the student’s credit is approved by the lender. Please note that the borrower has 30 days from the receipt of the approval disclosure to notify the lender that the borrower accepts the loan offer.
- Final Disclosure– sent to the borrower after the lender has received the following items:
- acceptance of the approval disclosure by the borrower
- the private loan applicant self-certification form completed by the borrower
- certification of the loan by the borrower’s school
Be aware that the lender must wait at least 3 or more business days after the final disclosure is sent before they can send the funds to the school.
Private Education Loan Applicant Self-Certification Form
In addition to the disclosures, the lender will also send the borrower a self-certification form. This form is sent once the private loan application is credit-approved. The borrower must complete sections 2 and 3 of the form, sign it, and return it to the lender.
Keep in Mind
Due to these new requirements, all students will need to allow for more time for loan certification and disbursements to occur than what was experienced in the past. This additional time may cause:
- late fees on a student account
- a delay in the receipt of a potential refund
- a delay of student participation in registration and housing lotteries in the event that a financial hold exists on the student’s account
REPAYMENT
National Student Loan Data System(NSLDS)
The National Student Loan Data System (NSLDS) is the Department of Education’s central database for Federal Student Aid. It can be used to review all of your Federal loans that you have received during your academic career (both at Eastman and other institutions). This site is very useful to students and parents as it gives a complete summary of the borrower’s Federal loan servicer(s), loan amounts and dates, institutions attended, etc.
The Borrower will need his/her Department of Education PIN (www.pin.ed.gov) (same as your FAFSA PIN) in order to access this website.
Grace Period
The interest subsidy on all new Federal Direct Subsidized Loans during the grace period will be eliminated beginning with the 2012-2013 academic year.
When a student graduates, drops below half-time status, takes a leave of absence or withdraws from the Eastman School of Music, the student’s loans leave their In-School Deferment status and begin their Grace Period. The grace period for Direct Loans is 6 months and 9 months for Perkins Loans.
Repayment
At the end of the grace period, students must begin repayment on their loans. If a borrower is not able to make payments at some point during his/her repayment period, then the borrower must make arrangements with his/her Federal loan servicer(s) to change the loan payment plan(s), defer the loan payments or place the loan(s) in forbearance. In most cases, students can apply for these options through their servicer(s)’ websites. Regardless, we encourage borrowers to contact their Federal loan servicer(s) directly to discuss their options.
Loan Servicer Contact Information
A student or parent borrower can find his/her Federal loan servicer(s) on the NSLDS website (www.nslds.ed.gov). The servicers for loans most commonly borrowed by Eastman students are listed below.
In School Deferment Forms for Students and Parent Borrowers
Students who leave Eastman and continue their education at another institution (at or above half-time status), students who are returning to Eastman from a leave of absence or parent borrowers who wish to defer payment on the principal while their son/daughter is in school, will need to complete an In-School Deferment form for each of their loan servicers at the beginning of each semester/term they are enrolled above half-time status. All borrowers should first review their student loans on NSLDS to obtain their Federal loan servicer(s) information. Then, contact each of their loan servicer(s) to obtain a copy of the In School Deferment Form. The form is different for each loan servicer.
CONSOLIDATION
Consolidation can simplify loan payments and locks in interest rates. Students who are considering consolidation are advised to consult with their Federal Loan Servicers or with a Financial Aid Counselor prior to consolidating their loans. General information on consolidation can be found on the Federal Direct Consolidation Loans Information Center.
