Loans

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.

Current News – Latest Federal Direct Loan Changes

  • New Federal Loan Guidelines in effect

    • For all undergraduate students who borrow a Federal Direct Subsidized Stafford loan for the  first-time after July 1, 2013,  the students will only be able to borrow up to 150% of the published length of the program of study.  For a 4-year bachelor’s degree program, the maximum period of subsidized loan eligibility is 6 years. (150% Federal Direct Subsidized Loan Limit)

    • Effective for periods of enrollment (loan periods) beginning on or after July 1, 2012, graduate and professional students will no longer have the option to borrow Federal Direct Subsidized Stafford Loans.  Graduate and professional students will be eligible for Federal Unsubsidized Stafford Loans ONLY.

    • Effective July 1, 2012, students borrowing Federal Direct Subsidized Stafford loans will no longer have a subsidized 6-month grace period. Loans processed after this date will still have a 6-month grace period, however interest will immediately begin accruing on the principle as soon as the student is no longer enrolled or has dropped below half-time enrollment.

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 rate of 3.86% 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 rate of 3.86% (undergraduate student) or 5.41% (graduate student) on an unsubsidized loan will accrue while a student is in school. Direct Student Loans (subsidized and unsubsidized) allow for a 6 month grace period before the student has to begin repayment of the loan once the student graduates or falls below half time enrollment (6 credits).

To begin the Federal Direct Student Loan process, a student must accept the Financial Aid offer.  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 late July before the start of the semester.  An origination fee is deducted from the loan at the time of disbursement.

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 interest rate is 6.41%.  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  interest rate is 6.41%. 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 a 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 late July 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.

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 Loan Disbursements/Requesting a Refund Check

All Federal Loans will be disbursed to the student’s account at the beginning of both the fall and spring semesters.

The student borrower will be notified when a Federal Direct Loan or Federal Perkins Loan disbursement is made to his/her student account.  If the student wishes to decline or reduce a Federal Direct Loan, the Financial Aid Office needs to be notified in writing no later than 14 days after the disbursement of the loan.

The parent borrower will be notified when a Federal Direct PLUS Loan disbursement is made to the student’s account.  If the parent wishes to decline or reduce a Federal Direct Loan, the Financial Aid Office needs to be notified in writing no later than 14 days after the disbursement of the loan.

The graduate student borrower will be notified when a Federal Direct Graduate PLUS Loan disbursement is made to his/her student account.  If the graduate student wishes to decline or reduce a Federal Direct Loan, the Financial Aid Office needs to be notified in writing no later than 14 days after the disbursement of the loan.

2014-15 Change in Aid Request Form - Required for all borrowers who wish to make a reduction in their Federal Direct Loan (subsidized or unsubsidized), Federal Direct PLUS Loan or Federal Direct Graduate PLUS Loan.  This form is completed and submitted to the Financial Aid Office.

Credit Balance Request FormRequired 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 is completed and submitted to the Bursar’s Office.

For further information about the process of requesting a credit refund from a student account, please visit the Student Refund Checks section of the Bursar’s Office Website.

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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.  The Perkins Loan allows for a 9 month grace period before the student has to begin repayment of the loan once the student graduates or falls below half time enrollment (6 credits). 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.

Perkins Loan Disclosure Statement

A Perkins Loan Disclosure statement, which will specify the loan amount you are borrowing and other important information about your loan, 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.

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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. Borrowers can visit NSLDS to view information about all of the federal student loans received and to find contact information for the loan servicer or lender for their loans. A Federal Student Aid PIN to access this information is needed. Check the current federal record of your outstanding Federal Loans.

Federal Loan Servicer 

A loan servicer is a company that handles the billing and other services on a federal student loan. The loan servicer administers repayment plans, loan consolidation and assists with other tasks related to federal student loans. Borrowers should maintain contact with their loan servicer. A loan servicer is assigned to a loan by the U.S. Department of Education after the entire loan amount has been disbursed.

Grace Period

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 the repayment period, then the borrower must make arrangements with the 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.

Deferment Forms

Borrowers who wish to defer payment on the principal and/or interest of their Federal Loans due to extenuating circumstances will need to contact their Federal Loan Servicer(s) to obtain these forms.

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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 Student Aid website.

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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 Private 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