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A student seeking a loan under the Federal Direct Stafford Loan program must first complete a Free Application for Federal Student Aid (FAFSA) to determine student eligibility. 

Eligibility for William D. Ford Federal Direct Loans

To be eligible for a Federal Direct Loan, a student must be:

 

·         a U.S. Citizen or permanent resident alien

·         maintain satisfactory academic progress

·         not be in default on a prior educational loan

·         MUST be matriculated and registered for a minimum of 6 undergraduate credits for the semester(s)  

Maximum Annual Loan Amounts

Dependent Students

Base Amount (may be subsidized or unsubsidized)

Additional Unsubsidized Amount

Total Subsidized and Unsubsidized Amount

1st year - fewer than 30 credits earned

up to $3,500 per year

up to $2,000 per year

up to $5,500 per year

2nd year –30 or more credits earned

up to $4,500 per year

up to $2,000 per year

up to $6,500 per year

undergraduate aggregate maximum

up to $23,000

up to $8,000

up to $31,000

Independent Students

Base Amount (may be subsidized or unsubsidized)

Additional Unsubsidized Amount

Total Subsidized & Unsubsidized Amount

1st year - fewer than 30 credits earned

up to $3,500 per year

up to $6,000 per year

up to $9,500 per year

2nd year - 30 or more credits earned

up to $4,500 per year

up to $6,000 per year

up to $10,500 per year

undergraduate aggregate maximum

up to $23,000

up to $34,500

up to $57,500

There are two types of Federal Stafford Loans

Subsidized Federal Stafford Loan:

The interest on this type of loan is paid by the Federal government while attending college.  To be eligible for the Subsidized Federal Stafford Loan, the applicant must:

 

·         show financial need; and file a FAFSA to determine the Expected Family Contribution (EFC).

·         be enrolled for at least half-time study at an approved institution, be a United States citizen or a permanent resident alien demonstrate satisfactory academic progress

·         not be in default on a prior educational loan

MAXIMUM FOR SUBSIDIZED STAFFORD LOANS

Cost of Attendance- Expected Family Contribution- Estimated Financial Assistance = Maximum Loan Amount

Unsubsidized Federal Stafford Loan:  

 The interest on this type of loan is paid by the student while attending school or the interest is added to the loan (interest is 6.8%)

·         To be eligible for the Unsubsidized Federal Stafford Loan, the applicant must:

·         demonstrate satisfactory academic progress

·         not be in default on a prior educational loan

·         Cannot exceed the Cost of Attendance 

MAXIMUM FOR UNSUBSIDIZED STAFFORD AND PLUS LOANS

Cost of Attendance  – Estimated Financial Assistance = Maximum Loan Amount

Applying for a  Federal Direct Loan:

1.    If you are a first-time Direct Loan borrower at KBCC, you must complete Entrance Counseling

2.    If you are a first-time Direct Loan borrower at KBCC, you must sign an Electronic Master Promissory Note 3.    Decide the amount you wish to borrow (refer to the maximum loan amount table above)

4.    Complete and submit an online Federal Direct Loan Request (follow steps below as web guide)

 

·         Click on Log-in at the bottom of the left navigation bar.

·         If you do not have a username and password, go to Register Now to apply for one.

·         Enter your username and password.

·         Scroll down to Apply to CUNY and click on ‘CUNY’S Online Center for Admissions and Financial Aid.

·         Click on Financial Aid on the left navigation bar.

·         Go to Application Status from the drop-down menu.

·         Click on Direct Loan Request Form.

·         Complete and submit your Direct Loan application.

A paper application is also available under downloadable form to complete and submit to the Financial Aid Office in Room U201

Increasing/Decreasing/Canceling your Direct Loan:

If you wish to increase, decrease or cancel your Direct Loan before the funds disburse you must complete and submit a Loan Adjustment Request Form to the Financial Aid Department.               

What Happens Next:

  • It takes approximately two weeks for a loan to be processed by KBCC
  • If an online loan request is submitted, the student will receive a confirmation thru e-mail as notification that the loan has been processed by the school.  If a paper application has been submitted a disclosure statement follows.
  • Your request will be processed after we have determined that:
            a. you have filed a FAFSA for the current academic year;
            b. the information you provided on your FAFSA is correct;
            c. you have registered for at least 6 credits or the equivalent.
  • The Bursar will be notified about your request-in-progress within 3 to 5 business days.
  • Once your request has been submitted the student will be sent a Loan Disclosure Statement in the mail  from the Dept. of Education,  that summarizes information about the type of loan, the approved amounts and the estimated dates of disbursement
  • Your electronic Master Promissory Note (e-MPN) must be acknowledged and approved by the Dept. of Education before any funds can be authorized for disbursement
  • If you do not sign the e-MPN, a paper MPN will be mailed to you about two weeks after your loan request is processed. Sign and return the paper MPN in the envelope provided or log-on to the e-MPN web site and complete the MPN electronically. Be aware that utilizing the paper method may delay receipt of your loan funds.    Note: if you previously signed an MPN that did not result in a disbursement of Direct Loan funds, you must resign your MPN for any new loan requests
  • Your loan will be disbursed in at least 2 installments. The first disbursement can be no more than 1/2 of the total approved loan amount. For loans covering the full academic year (Fall & Spring semesters), each disbursement will be about 30 days after the start of the fall and spring semester respectively. For loans covering one semester, the second disbursement will occur midway through the semester
  • Your class attendance will be checked to make sure you actually began attending your classes and are continuing to attend on at least a half-time (6 credit) basis prior to the release of any loan funds. If you receive a disbursement of Direct Loan funds for classes you have never attended, you must return the entire payment immediately to the College.             
  • The Bursar may deduct unpaid tuition charges from your loan before releasing funds to you
  • You will be notified via e-mail as to the date your funds become available. The portion of your loan not deducted for tuition charges will be issued as a payment to your CUNY Scholar Support Prepaid Card or direct deposited to your personal bank account on the scheduled disbursement date. If you have not elected the prepaid card or direct deposit options, your loan proceeds will be available as a check mailed to your home

FEDERAL PARENT LOAN FOR UNDERGRADUATE STUDENTS (PLUS)

PLUS loans are federal loans that parents of dependent undergraduate students can use to help pay for college

·         The annual limit on a PLUS Loan is equal to the student's cost of attendance minus any other financial aid the student receives.  For example, if the cost of attendance is $6,000 and the student receives $4,000 in other financial aid, the student's parent can request up to $2,000.

·         In most cases, the loan will be disbursed in at least two installments, and no installment will be more than half the loan amount. The school will use the loan money first to pay the student's tuition, fees, room and board, and other school charges. If any loan funds remain, the parent will receive the amount as a check or other means. Any remaining loan funds must be used for the student's education expenses.

·         The interest rate is fixed at 7.9%. Interest is charged from the date of the first disbursement until the loan is paid in full.   The parent will pay a fee of 4% of the loan amount, deducted proportionately each time a loan disbursement is made.

·         The repayment period for a Direct PLUS Loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. However, for Direct PLUS Loans with a first disbursement date on or after July 1, 2008, the parent may defer repayment

·         while the student on whose behalf the parent borrowed the loan is enrolled on at least a half-time basis, and

·         For an additional six months after the student ceases to be enrolled at least half-time.

TO RECEIVE A PLUS LOAN YOU MUST:

·         Student must file a FAFSA application

·         Must be a U.S. Citizens or eligible non-citizens

·         Parents must be able to pass a credit check

·         Must not be in default of any loan or owed an overpayment for FSA grant

·         The dependent student must enrolled be at least half-time

 

           How to apply:

·         A PLUS Loan request (separate application), which can be found under downloadable form, must be submitted to the financial aid office

·         Complete an Electronic Master Promissory Note for Parent Plus

·         The loan request is then submitted for a credit check

·         Parents will be notified by mail of their results

·         If approved a disclosure statement will be sent notifying the amount and dates of disbursements

 

 

ALTERNATIVE LOANS

Alternative loans, also called private loans,  are used at KBCC Community College by students and their families when:

·                     the student is not eligible for a Federal Direct Loan because they do not meet the federal eligibility requirements

·                     the student is receiving the maximum Federal Direct Loan allowed for the loan period but still needs additional funds to meet the cost of attendance

·                     Students and parents who are eligible for Federal Direct Loan funds should always borrow through the Federal Direct Loan program before turning to alternative loans to finance the student’s education

·                     Alternative loan costs vary widely between programs. All private lenders will review the borrower’s credit history and some will require a loan co-signer. The Office of Financial Aid at KBCC Community College does not endorse or recommend any particular alternative loan program or any particular private lender. Students and their families should carefully consider the interest rates, loan fees, and terms of the alternative loan program before deciding on a private lender

·                     Some alternative loan programs have restrictions regarding the minimum number of credits for which the student must enroll, as well as the requirement that the student must be matriculated (enrolled in a degree program).

 

 
 
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