Paying for College
Loans
Remember, loans must be repaid!
SCF encourages you to review all information about loans before deciding to borrow and to borrow only what you need. Loans awards may be reduced, even after disbursed which can create a debt to SCF if eligibility requirements are not maintained and/or a student’s Cost of Attendance is exceeded. If a student has received any financial aid, including but not limited to student loans, they must inform the financial aid office of such aid received as it may impact award eligibility at SCF. Failure to do so may cause an award to be reduced unexpectedly when the over award is identified.
Loans at SCF
Federal Direct Stafford Loans
Federal Direct Stafford Loans are federal student loans for eligible students to help cover the cost of higher education. The following are the two loan programs available:
- Federal Direct Subsidized Stafford Loans
- Available to undergraduate students with financial need.
- Financial Aid determines the amount students are eligible to borrow, not to exceed financial need.
- The U.S. Department of Education pays the interest:
- While the student is in school at least half-time
- For the first six months after leaving school or falling below half-time enrollment
- During a period of deferment (postponement of loan payments)
- Federal Direct Unsubsidized Stafford Loans
- Available to undergraduate and graduate students; there is no requirement to demonstrate financial need
- Financial Aid determines the amount students are eligible to borrow, not to exceed cost of attendance
- The student (borrower) is responsible for paying the interest during all periods.
For Federal Direct Stafford Loans, there is a loan fee that is a percentage of the amount of each loan you receive. For loans first disbursed between October 1, 2018 and before October 1, 2019, the loan fee is 1.062%, which be deducted proportionately from each loan disbursement. The specific loan fee that you are charged will be reflected on a disclosure statement sent by the Federal government.
How to Apply
- The first step in applying for any financial aid at SCF, including loans, is to complete the FAFSA (Free Application for Federal Student Aid).
- Complete Online Entrance Counseling at www.studentloans.gov
- You will be required to enter your FSA ID
- Choose “Complete Entrance Counseling”
- Complete tutorial session and review portions
- Click on SUBMIT
- We recommend printing a copy of the confirmation page for your records.
- Complete your Master Promissory Note at www.studentloans.gov
- You will be required to enter your FSA ID
- Choose “Complete Master Promissory Note”
- Complete all information requested
- Click on SUBMIT
- We recommend printing a copy of the confirmation page for your records.
Students have the right to cancel all or a portion of their student loan(s). If you wish to do so, you must contact our office in writing within 14 days of this notification (A copy of your request must be sent to both the Cashier’s Office and the Office of Financial Aid Services).
Information for First-time Direct Loan Borrowers
If you are a first-time borrower at SCF, you will be required to:
- Complete Online Direct Loan Entrance Counseling
- Complete your Direct Loan Master Promissory Note (MPN)
These steps must be completed before you can receive your first loan disbursement.First-time, first-year Direct Stafford borrowers will not receive their first loan disbursement until 30 calendar days after the first day of classes, according to federal regulations. For Students taking late starting classes – disbursements of your student loans will occur once you begin attending at half-time status which is 6 credits.
Time Limit
For first-time borrowers on or after July 1, 2013, there is a limit on the maximum period of time (measured in academic years) a student can receive Direct Subsidized Loans. If this limit applies, the borrower may not receive a subsidized loan for more than 150 percent of the published length of matriculating program. This time frame is referred to as “maximum eligibility period.”
Current Interest Rates
The interest rate varies depending on the loan type and (for most types of federal student loans) the first disbursement of the loan. For current rates, please visit studentaid.ed.gov.
Federal Direct Plus Loans
The Federal Government provides a PLUS (Parent Loan for Undergraduate Students) loan that enables birth, adoptive, or step-parents with no adverse credit history to borrow money to pay for the education of dependent undergraduate students enrolled at a least half-time (6 + credits).
A credit check is required for a PLUS Credit Approval.
Federal PLUS Loan Eligibility
To be eligible to borrow a PLUS Loan as a parent:
- The student must complete a FAFSA (Free Application for Federal Student Assistance)
- You must obtain an FSA ID
- You must be a U.S. Citizen or National or Permanent Resident/Other Eligible Non-Citizen
- You must be the biological or adoptive parent of the student
- You must be the spouse of the student’s parent and considered to be a parent in accordance with the instructions on the FAFSA for purposes of reporting income and assets
- The student and parent must not be in default on a federal education loan or owe an overpayment on an educational grant
- The student must be matriculating in a program of study
- The student must be enrolled at least half-time (minimum of six credits)
- The student must attend classes and maintain Satisfactory Academic Progress
- You cannot have an adverse credit history
- You must complete the Federal Direct PLUS Loan Application
- You must complete the Federal Direct PLUS Master Promissory Note
How to Apply
- The Federal Direct PLUS Loan is not based on financial need; however, SCF requires the student completes a FAFSA for eligibility.
- Complete the Federal Direct PLUS Loan Application at www.studentloans.gov.
- Complete Federal Direct PLUS Loan Master Promissory Note (MPN) at www.studentloans.gov.
- Contact the Student Loan Office
How much money can my parents borrow?
Parents may borrow the full yearly Cost of Attendance (as established by Financial Assistance Services) minus all other eligible financial assistance.
For example, if the Cost of Attendance is $6,800 and the student receives $4,000 in other financial assistance, your parent(s) could borrow up to, but no more than, $2,800. There is no cumulative borrowing limit.
Private Loans
SCF does not endorse any specific private loan lenders or have a preferred lenders list. We encourage students to research private lenders and advise students to understand all terms, rights, and responsibilities. Students should first explore scholarships and grant opportunities; as well as federal student aid through completing the FAFSA (www.fafsa.gov) Federal loans will offer lower interest, are guaranteed by the Department of Education, and can provide flexible repayment terms. For additional information, please visit studentloans.gov. Federal Truth in Lending Act requires lenders to disclose key terms of lending arrangements and all costs in a uniform manner. SCF strongly encourages all students to review this information from your student loan lender prior to entering any agreements
Helpful Loan Information
You begin repaying Federal Direct Stafford loans six months after graduation, leaving school, or dropping below half-time enrollment. You must complete federally required Exit Counseling before you graduate from SCF, if you drop below half-time attendance, or withdraw from classes completely.
A loan servicer will be assigned your loan from the Department of Education. The loan servicer is provided to help you manage the repayment of your Federal student loans for free. The loan servicer will work with you on repayment plans and loan consolidation and will assist you with other tasks related to your federal student loan. It is important to maintain contact with your loan servicer. If your circumstances change at any time during your repayment period, your loan servicer will be able to help.
You can visit My Federal Student Aid to view all the information about the federal student loans that you have received and you will find the contact information for the loan servicer.
When your loan is due, the federal loan servicer will mail you a payment schedule with your monthly payment of principal and interest, and the unpaid balance for each month it takes to repay your total debt. If they do not contact you, you are responsible for contacting them at:
U.S. Department of Education
Higher Education Loan Service Center
PO Box 4609
Utica, NY 13504-4609
Hours of Operations are from 8am-8pm EST
1-800-848-0979 1-800-848-0983 (TYY)
Delinquent Account/Collections Department: 1-800-848-0981
Or
The Federal Student Aid Information Center (FSAIC) They can be reached by email, chat or phone.
You can call 1-800-433-3243 or email at studentaid@ed.gov
National Student Loan Data System (NSLDS)
With your FSA ID, you can access NSLDS a database that contains your financial aid history from any school. This includes grants, federal Stafford and PLUS loans, whether borrowed directly from the Federal government or a private lender. Private loans are not listed on NSLDS.
The Federal Direct Consolidation Loan Program allows you to combine one or more certain federal student loans and to make one monthly payment to the federal government. If you have multiple student loans you may be able to combine them into one loan with a fixed interest rate based on the average of the interest rates on the loans being consolidated. There is no charge for consolidation, and repayment plans are offered. The interest rate is fixed for the life of the loan and cannot exceed 8.25 percent. You will need to complete the free Federal Direct Consolidation Loan Application and Promissory Note. You will confirm the loans you want to consolidate and agree to repay the new Direct Consolidation Loan.
For more information, call:
Direct Loan Borrower Services Consolidation at 1-800-557-7392; TDD 1-800-557-7395.
Pros and cons of loan consolidation
PROS
- Locks in the interest rate
- Allows the borrower to combine loans from multiple lenders into a single repayment schedule (i.e., one monthly payment)
- Allows the borrower a longer repayment period, which will reduce the amount of the borrower’s monthly payment
- Allows a borrower to clear an over-award of Stafford loans or clear a defaulted student loan
CONS
- Locks in the interest rate, for older Stafford loans that have a variable interest rate
- May increase the total cost of the borrower’s loan, the longer the repayment, the more interest you will pay
- Borrower may have to forfeit all or a portion of the grace period
- Borrower may lose certain borrower benefits related to their current loans
- Certain deferments may be lost; however, borrowers retain their ability to request most major deferments
- Borrowers who consolidate Perkins Loans lose the deferment subsidy and cancellation eligibility options related to Perkins loans
Loans That Can Be Consolidated
Federal Direct Loans and Federal Family Education Loan(s) that are eligible for loan consolidation include:
- Stafford
- PLUS
- SLS
- Previous Consolidation Loans
- Perkins Loans
- Health Professional Student Loans
- Nursing Student Loans
- Health Education Assistance Loans (HEAL)
- Federally Insured Student Loans (FISL)
*Alternative loans are not eligible to be included in a Federal Consolidation Loan
If you have trouble making your education loan payments, you may qualify for a deferment (a temporary suspension of loan payments for specific situations such as re-enrollment in school, unemployment or economic hardship) or a forbearance (a temporary postponement or reduction of payments for a period of time because you are experiencing financial difficulty).
These periods do not count toward the length of time you have to repay your loan. You cannot get a deferment or forbearance for a loan that is already in default. You must continue making payments on your student loan until you have been notified that a deferment or forbearance has been granted.
Deferment
A deferment is a period of time during which no payments are required and interest continues to accrue on the unsubsidized portion. Interest does not accrue on the subsidized portion. PLUS borrowers may defer repayment while the student is enrolled at least half-time. To qualify for a deferment, you must meet at least one of the eligibility requirements listed below, with certain conditions:
- Be enrolled at least half-time (at least six credit hours) at a postsecondary school
- Study in an approved graduate fellowship program or in an approved rehabilitation training program for the disabled
- Be unable to find full-time employment (up to three years)
- Face an economic hardship including Peace Corps Service (up to three years)
- Be on Active Military Duty – If a borrower is called to active duty during a war, other military operation or national emergency and if the borrower was serving on or after Oct. 1, 2007, the borrower qualifies for an additional 180-day period following the demobilization date for the qualifying service.
Forbearance
If you temporarily cannot meet your repayment schedule, but you are not eligible for a deferment, your lender might grant you forbearance for a limited and specific period of time. Interest continues to accrue and you are responsible to pay it. Generally, your lender can grant forbearance for periods up to 12 months at a time, for a maximum of three years. You will need to provide documentation to the lender to show why you should be granted forbearance. The lender must send you a notice confirming the terms that were agreed to and record them in your file. Receiving a forbearance is not automatic: you must apply for it.
Is deferment or forbearance right for me?
If you are struggling to repay your loans due to a temporary circumstance, deferment or forbearance may be a good short-term solution.
If you are having trouble repaying your loans due to circumstances that may continue for an extended period, or if you are unsure when you will be able to afford to make your monthly loan payments again, a better option may be to consider changing to an income-driven repayment plan. Income-driven repayment plans base your monthly payments on your income and family size, and in some cases your payment could be as low as $0 per month. They can also provide loan forgiveness if your loan is not repaid after 20 or 25 years.
Always contact your loan servicer immediately if you are having trouble making your student loan payments.
Default is a serious consequence for not repaying your loans. It will occur if you fail to make a payment for 270 days. The school, lender, or agency that holds your loan may all take action to recover the money.
Not paying back your student loans can have serious consequences including:
- The lender can require that you repay the entire amount immediately, including all interest, collections, and late payment charges.
- The lender can sue you and can ask the federal government for help in collecting from you.
- The lender can garnish your wages.
- The Internal Revenue Service may withhold your income tax refund and apply it toward your loan repayment.
- You cannot get any additional federal student aid until you make satisfactory arrangements to repay your loan.
- The lender may notify credit bureaus of your default. This may affect your credit rating, which will make it difficult to obtain credit cards, car and/or home loans in the future.
In many cases, default can be avoided by submitting a request for a deferment, forbearance, discharge, or cancellation and by providing the required documentation.
There are steps that you can take to avoid going into default. Visit avoid default for more information.
Defaulted Student Loan information line: 1-800-621-3115
There are several options for repaying your loans if you suffer a financial hardship or other circumstances.
You may review loan balances and lender information for all student loans you have received at https://nslds.ed.gov/nslds/nslds_SA/. Please review the NSLDS website referenced above carefully to ensure all the information is correct.
The goal of exit counseling is to help you understand your responsibilities when repaying your federal student loan. If you are a student who has received subsidized, unsubsidized, or PLUS loans under the Direct Loan Program or the Federal Family Education Loan (FFEL) Program*, you must complete exit counseling.
*Note: No new loans have been made under the FFEL Program since June 30, 2010.
When you graduate, leave school or drop below half-time enrollment, you will be required to complete exit counseling. The exit counseling process must be completed in a single session and it usually takes 20-30 minutes.
To start your exit counseling process please visit Exit Counseling at Federal Student Aid website.
It is very important that you meet your student loan repayment responsibilities. If you experience problems in making payments, please contact your loan servicer. You will be able to identify your loan servicer on the aforenoted website. Loan default has serious consequences. Therefore, please use the resources available if you encounter problems repaying your student loan.
If you have questions or need future assistance, please contact Financial Aid Department.
Truth in Lending Act Disclosure
SCF does not endorse any specific private loan lenders or have a preferred lenders list. We encourage students to research private lenders and advise students to understand all terms, rights, and responsibilities. Students should first explore scholarships and grants opportunities; as well as federal student aid opportunities through completing the FAFSA (www.fafsa.gov) Federal loans will offer lower interest, are guaranteed by the Department of Education, and can provide flexible repayment terms.
For additional information, please visit studentloans.gov Federal Truth in Lending Act requires lenders to disclose key terms of lending arrangement and all costs in a uniform manner. SCF strongly encourages all students to review this information from your student loan lender; especially the data in the Federal Box, which should appear near the top of the Truth in Lending Act disclosure.
An example of this information:
| Annual Percentage Rate | Finance Charge | Amount Financed | Total of Payments |
|---|---|---|---|
| The cost of your credit as a yearly rate | The dollar amount the credit will cost you | The amount of credit provided to you or on your behalf | The amount you will have paid after you have made all scheduled payments |
| 5.05% | $1,407.80 | $2,425 | $3,832.80 |
In this example, student will be repaying $2,500 even though the amount financed showed $2,425. This includes origination fees and/or finance charges.