Loan Information

U.S. DEPARTMENT OF EDUCATION

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. For more comprehensive information about the William D. Ford Direct Loan Programs, please visit the Federal Student Aid website.

Changes to Federal Direct Loans

 New Origination Fees: For any new Federal Direct Loans originated where the first disbursement date will be made on or after October 1, 2015 and before October 1, 2016, the new loan origination fees are 1.068% for Direct Subsidized Loans and Direct Unsubsidized Loans, and 4.272% for Direct PLUS Loans and Direct Graduate PLUS Loans

New Interest Rates: For any new Federal Direct Loans originated where the first disbursement date will be made on or after July 1, 2015 and prior to July 1, 2016, the new interest rate for Direct Subsidized & Unsubsidized Loans (Undergraduates) is 4.29%, for Direct Unsubsidized Loans (Graduates) is 5.84% and Direct PLUS Loans (Parent & Graduates) is 6.84%.

FAFSA PIN Changing to FSA ID:  Effective May 10, 2015, the FSA ID is replacing the FAFSA PIN.  The FSA ID (Username and Password) will replace PIN for students, parents, and borrowers accessing Federal Student Aid systems. How to Create a FSA ID

New PLUS/Graduate PLUS Loan Entrance Counseling Requirement:  This requirement will apply to all Direct PLUS & Graduate PLUS Loan applicants with an adverse credit decision date on or after March 29, 2015, regardless of the academic year or loan period associated with the PLUS/Graduate PLUS.

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

Graduate Student Borrowing: Graduate and professional students no longer have the option to borrow Federal Direct Subsidized Loans.  Graduate students will be eligible for Federal Unsubsidized Loans ONLY.

No Interest Subsidy During Loan Grace Period: All undergraduate students who received a Federal Direct Subsidized Loan that was first disbursed between July 1, 2012, and July 1, 2014, no interest subsidy will be paid during the 6 month grace period. Interest not paid during that time period will accrue and be capitalized back into the loan.

Direct Student Loan Programs

The Federal Direct Subsidized Loan is a low-interest educational loan for undergraduate students attending school at least half-time (6 credits). Eligibility for this loan is based on a student’s calculated financial need as determined by the information provided on the FAFSA and the college’s cost of attendance. When a student is no longer enrolled or drops below half-time status, there is a 6 month grace period before repayment begins. The government pays the interest on the loan while the student is enrolled at least half-time, during the 6 month grace period (except for loans borrowed between July 1, 2012 and July 1, 2014) and other authorized periods called deferments. The amount of loan offered is based on academic grade level and calculated financial need. 

The Federal Direct Unsubsidized Loan is a low-interest educational loan for both undergraduate and graduate students attending school at least half-time (6 credits). A student’s need is not a factor for a Direct Unsubsidized Loan and a student can qualify regardless of family income.  The government does not pay the interest; the student can choose to either pay the interest while in school or have the interest added to the loan principal to be repaid later. The amount of loan offered is based on academic grade-level. When a student is no longer enrolled or drops below half-time status, there is a 6 month grace period before repayment begins.

Academic Year (AY) Direct Student Loan Limits

Federal regulations specify the maximum Federal Direct Loan amount a student can borrow each academic year based upon grade level. Actual eligibility is specified in the Eastman financial aid package and may be less than the annual maximum.

 

Grade Level & Dependency

Maximum AY Direct Subsidized Loan

Maximum Total Direct (Subsidized and Unsubsidized)

 

Freshman/Dependent

$3,500

$5,500

 

Sophomore/Dependent

$4,500

$6,500

 

Junior/Senior-Dependent

$5,500

$7,500

 

Freshman/Independent

$3,500

$9,500

 

Sophomore/Independent

$4,500

$10,500

 

Junior/Senior-Independent

$5,500

$12,500

 

Graduate Student

N/A

$20,500

Life Time Direct Student Loan Limits

Federal regulations also specify the total lifetime limits a student can borrow.

Grade Level & Dependency

Maximum Direct Subsidized Loan

Maximum Total Direct Loan (Subsidized and Unsubsidized)

Dependent/Undergraduate

$23,000

$31,000

Independent/Undergraduate

$23,000

$57,500

*Graduate Student

$65,500

$138,500

*Note: The Graduate Student debt limit includes loans for undergraduate study.

Interest Rates

 

Borrower Type

Loans first disbursed on or after 7/1/14 and before 7/1/15

Loans first disbursed on or after 7/1/15 and before 7/1/16

Direct Subsidized Loans

Undergraduate

4.66%

4.29%

Direct Unsubsidized Loans

Undergraduate

4.66%

4.29%

Direct Unsubsidized Loans

Graduate

6.21%

5.84%

Loan Origination Fees

An origination fee is subtracted from the requested loan amount, so the dollar amount disbursed will be less than the amount borrowed.

Direct Subsidized Loans and Direct Unsubsidized Loans

First Disbursement Date

Loan Fee

On or after Oct. 1, 2015 and before Oct. 1, 2016

1.068%

On or after Oct. 1, 2014 and before Oct. 1, 2015

1.073% 

 

 Direct PLUS Loan Programs (Graduate Students & Parents of Dependent Students)

The Federal Direct Parent PLUS Loan is a credit-based loan at a fixed interest rate that allows a parent to borrow up to the cost of attendance minus other financial aid awarded. Repayment on the principal and the interest can be deferred while the student is enrolled in college by the completion of a PLUS Loan In-School Deferment Form. This form is obtained from the Federal Loan Servicer of your PLUS Loan. However, interest will accrue and be capitalized back into the loan.

If a parent is denied the Federal Direct Parent PLUS Loan, the dependent undergraduate student may be eligible for additional Federal Direct Unsubsidized Loan at the independent student loan limit.

The Federal Direct Graduate PLUS Loan is a credit-based loan at a fixed interest rate that allows a graduate student to borrow up to the cost of attendance minus other financial aid awarded. Repayment on the principal and interest can be deferred while the graduate student is enrolled in college by the completion of a Graduate PLUS Loan In-School Deferment Form. This form is obtained from the Federal Loan Servicer of your Graduate PLUS Loan. However, interest will accrue and be capitalized back into the loan.

Interest Rates

 

Borrower Type

Loans first disbursed on or after 7/1/14 and before 7/1/15

Loans first disbursed on or after 7/1/15 and before 7/1/16

Parent PLUS Loan

Parent

7.21%

6.84%

Graduate PLUS Loan

Graduate Student

7.21%

6.84%

Loan Origination Fees

An origination fee is subtracted from the requested loan amount, so the dollar amount disbursed will be less than the amount borrowed.

Direct Subsidized Loans and Direct Unsubsidized Loans

First Disbursement Date

Loan Fee

On or after Oct. 1, 2015 and before Oct. 1, 2016

4.272%

On or after Oct. 1, 2014 and before Oct. 1, 2015

4.292%

 

Direct Student Loan Processing

Federal Direct Student Loans (subsidized & unsubsidized) are available to students who apply for financial aid using the FAFSA. The FAFSA is the only application necessary to receive Federal Direct Student Loans, but you must also accept the loans in your financial aid package through ESM FAOnline.

Federal Direct PLUS Loans (parent & graduate) can be applied for using a paper or an online application. Online PLUS Loan or Graduate PLUS Loan Borrowers should avoid applying any earlier than 180 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. A FAFSA must also be on file for the dependent student of the parent applying for a Parent PLUS Loan or the graduate student who is applying for the Graduate PLUS Loan.

The processing of all Federal Direct Student Loans will begin in August before the start of the Fall semester. Further instructions will be emailed to all loan borrowers if additional requirements are needed.

Additional Requirements

Entrance Counseling Session(studentloans.gov)

Required of all first-time student borrowers who have accepted the Federal Direct Student Loans (subsidized & unsubsidized) or Graduate PLUS Loans as part of their financial aid package.

PLUS/Graduate PLUS (Adverse Credit) Entrance Counseling Session (available on or after March 29, 2015)(studentloans.gov)

Required of all PLUS Loan or Graduate PLUS Loan borrowers who have applied (paper or online) with an adverse credit decision date on or after March 29, 2015. 

Master Promissory Note for Student Direct Loan Borrowers(studentloans.gov)

Required of all first-time student borrowers who have accepted the Federal Direct Student Loans (subsidized & unsubsidized) as part of their financial aid package. A Department of Education FSA ID ( How to Create a FSA ID) is needed 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. Borrowers will need a Department of Education FSA ID (How to Create a FSA ID) 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. Borrowers will need a Department of Education FSA ID (How to Create a FSA ID) to complete this promissory note on-line.

 

 FEDERAL PERKINS LOAN PROGRAM

The Federal Perkins Loan is a low-interest federal loan with a fixed 5% interest rate. Eligibility for this loan is based on financial need as determined by the information provided on the FAFSA and fund availability. This loan is administered by the Eastman School of Music and does not have an origination fee. When a student is no longer enrolled or drops below half-time status, there is a 9 month grace period before repayment begins. The government pays the interest on the loan while the student is enrolled at least half-time, during the 9 month grace period and other authorized periods called deferments. For more comprehensive information about the Federal Perkins Loan Program, please visit the Federal Student Aid website.

The FAFSA is the only application necessary to receive a Federal Perkins Loan, but you must also accept the Federal Perkins Loan in your financial aid package through ESM FAOnline.

The processing of all Federal Perkins Loans will begin in August before the start of the Fall semester. Further instructions will be emailed to all loan borrowers if additional requirements are needed.

Additional Requirements

Entrance Interview Session for Perkins Loan BorrowersEntrance Interview Session

Required of all first-time student borrowers who have accepted a Federal Perkins Loan as part of their financial aid package.

Master Promissory Note for Perkins Loan BorrowersPerkins Loan Master Promissory Note

A Perkins Loan Master Promissory Note is completed online for all first-time student borrowers. 

Perkins Loan Disclosure Statement

A Perkins Loan Disclosure statement, which will specify the loan amount being borrowed and other important loan information, will be printed in August and available for student borrowers to sign in the Eastman Financial Aid Office. This requirement is completed each year.

 

 STATE EDUCATIONAL LOANS

Some state governments offer an educational loan program. These programs:

  • are available to both undergraduate and graduate students (and possibly to parents and relatives), as long as the student is matriculated and enrolled at least half time in a degree program.
  • are credit-based and offer interest rates and terms which are very competitive with alternative loans.
  • may have both fixed and variable interest rates available, depending on the state.

To learn if your state has a loan program contact your State Education Agency through the Department of Education’s Educational Resource Organizations Directory.  Read carefully the loan criteria and contact your State Education Agency with questions.

 

 PRIVATE ALTERNATIVE 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 and better repayment options.

If a student chooses to pursue a private loan, we recommend comparing the costs associated with various lenders before completing an application. Interest rates, fees, repayment periods, and other benefits can vary significantly between lenders. 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.

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 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 are required to wait at least 3 or more business days after the final disclosure is sent before they can send the loan 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 credit approval is received for the private loan application. The borrower must complete and return this form to the lender.

Keep in Mind

Due to these requirements, all students will need to allow for additional time for loan certification and disbursement processing to occur. 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
 

 FEDERAL & PRIVATE LOAN DISBURSEMENTS/REQUESTING A REFUND CHECK

Loans are disbursed to student accounts at the beginning of both the fall and spring semesters provided that all requirements have been completed.

Federal Loan (subsidized, unsubsidized, Parent PLUS, Graduate PLUS & Perkins) borrowers are notified when a disbursement it made to the student’s account. Requests for loan adjustments (cancellations or reductions) must be in writing and submitted to the Financial Aid Office within 14 days of the receipt of the disbursement notification email.

Change in Aid Request Form  – Required for all borrowers who wish to make a reduction in their Federal Direct Loan (subsidized, unsubsidized, Parent PLUS, Graduate PLUS & Perkins). 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 student’s account as a result of borrowing the PLUS loan. This form is completed and submitted to the Bursar’s Office.

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

 

 CHANGE OF ENROLLMENT STATUS

When a Federal Loan (subsidized, unsubsidized, Graduate PLUS & Perkins) student borrower has a change in enrollment status, then the student must complete an Exit Counseling Session online and will enter the loan repayment process. Students with questions about their Federal Loans are encouraged to contact the Eastman Financial Aid Office and meet with their counselor. For in-depth information about the loan repayment process, please visit the Federal Student Aid website.

Federal Direct Loan Exit Counseling Session – (studentloans.gov)

Required of all Federal Direct Loan student borrowers at the time they graduate, drop below half-time status (6 credits), 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 to attend a group Exit Counseling Information Session in April. All other students will be sent Exit Counseling information at the time of their status change. Since this is a Federal requirement, those students who fail to complete an Exit Counseling Session will have a hold placed on their transcript.

Exit Interview Session for Perkins Loan BorrowersExit Interview Session

Required of all Perkins Loan borrowers at the time they graduate, drop below half-time status (6 credits), 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 to a group Exit Counseling Information Session in April. All other students will be sent Exit Interview information at the time of their status change. Since this is a Federal requirement, those students who fail to complete an Exit Interview Session will have a hold placed on their transcript.

 

 REPAYMENT TERMS & RESOURCES

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 their federal student loans received and to find contact information for their loan servicers (lenders). A FSA ID (How to Create a FSA ID) to access this information is needed. Check your current federal loan record on NSLDS.

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 when the loan has been disbursed.

Grace Period

When a student graduates, drops below half-time status (6 credits), 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 for Perkins Loans is 9 months.

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 any 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. Students should 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.

Loan Consolidation

Consolidation can simplify loan payments and lock in interest rates. Borrowers considering consolidation are advised to consult with their Federal Loan Servicers or with a Financial Aid Counselor prior to consolidating their loans. Information on loan consolidation can be found on the Federal Student Aid website.

Loan Forgiveness, Cancellation & Discharge

Under certain circumstances, borrowers may qualify for forgiveness, cancellation or discharge of their Federal Loans. Information about these circumstances can be found on the Federal Student Aid website.