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LOANS
Loans unlike grants or work-study, are borrowed money that must be repaid, with interest. These are real loans - just like car loans and mortgages. You cannot have these loans canceled just because you didn't like the education you received or because you're having financial difficulty. These loans are a serious obligation, so think about the amount you'll have to repay over the years before you take out a loan.
Federal Family Education Loan Program (FFELP)
Formerly known as the Guaranteed Student Loan Program, the Federal Family Education Loan Program is available to assist students and their parents with the costs associated with attending college by offering low-cost education loans.
[Part B of Title IV of the Higher Education Act of 1965, as amended]
Types of Loans Available:
Subsidized Stafford Loan--This loan is available to students with demonstrated need (determined by the FAFSA). The federal government will pay the interest on this type of loan as long as the student is not in repayment status or until the student's deferment period ends.
Unsubsidized Stafford Loan--This loan is available to students regardless of demonstrated need (determined by the FAFSA). For independent students, this loan may supplement the funds obtained through subsidized funds. Students receiving this type of loan are responsible for all interest payments, including the time that the student is in deferment. It is advisable that, if possible, the student should make interest payments while in school. The student does, however, have the option of capitalizing the interest. This means that the unpaid interest will be added to the principal amount of the loan at regular intervals, and the student will ultimately owe more money.
Federal Parent PLUS Loan--This loan is available for parents of eligible dependent students. The borrower will be subject to a credit check to determine eligibility. Like unsubsidized loans, the borrower is responsible for all interest payments; however, the repayment period for this loan is determined by your lender.
- To be considered for the PLUS Loan, you must complete the FAFSA and a PLUS Pre-Approval Form online.
Lenders:
You must select a lender who is able to process the Master Promissory Note electronically. Visit our Online Lender List link to help you make a selection. To protect lenders from loss in the event of a borrower's death, disability, bankruptcy, or default, your loans are guaranteed by a guarantor. The guarantor is reinsured by the U.S. Department of Education. It is important that you know who your lender and guarantor are!
Student Eligibility:
You must:
- be either a U.S. citizen or eligible non-citizen
- accepted for enrollment
- making Satisfactory Academic Progress
- be enrolled at least half-time
- not be in default on previous student loans
The actual amount you are awarded will depend on other financial aid you receive, your estimated family contribution (EFC), and other factors. Your total financial aid award package cannot exceed your cost of attendance budget. This means that you may not be eligible for the maximum amount specified below. The grade level for your yearly loan limits will be based upon the number of earned hours you have at the beginning of the Fall semester for each year. Example: If you have 29 hours earned at the beginning of the Fall 2008 term, your loan will be awarded at Freshman levels for the Fall, Spring, and Summer sessions of the 2008-2009 academic year.
Yearly Loan Totals Based Upon Grade Level
Dependent Independent Subsidized Unsubsidized Subsidized Unsubsidized Total Combination Freshman $3,500 $2,000 $3,500 $6,000 $9,500 Sophomore $4,500 $2,000 $4,500 $6,000 $10,500 Junior $5,500 $2,000 $5,500 $7,000 $12,500 Senior $5,500 $2,000 $5,500 $7,000 $12,500 Graduate $8,500 $12,000 $20,500 The limits listed below apply to your entire academic career. These limits are established by the federal government, and you may not exceed them. It is extremely important that you be responsible with your borrowing habits. ALL LOANS MUST BE REPAID. Failure to repay your student loans will adversely affect your credit rating and purchasing power.
*GRADUATES MUST BE ENROLLED IN AT LEAST 5 GRADUATE LEVEL HOURS AND BE ADMITTED TO A DEGREE-SEEKING GRADUATE PROGRAM TO MAINTAIN GRADUATE ELIGIBILITY.
Aggregate Loan Limits
Dependent Independent Subsidized/Unsubsidized Subsidized Unsubsidized Total Combination Undergraduates $31,000 $23,000 $34,500 $57,500 Graduates $65,500* $72,500* $138,000* *Includes undergraduate loans
Master Promissory Note:
- The Master Promissory Note is the method for students to apply for their Stafford Student Loans. It was created to reduce the paperwork burden for students and schools. The initial MPN application, which replaces the Common Stafford Application, may be the one and only time a student is required to complete a loan application.
- Borrowing limits remain unchanged, but you do not NOT designate a specific loan amount on the MPN.
- Your loan amounts will appear on your award letter; however, you can reduce your loan amount on your web award notification. It will be better for you to borrow what you think you will need with your initial loan request.
- If you remain at the same school and keep the same lender throughout your collegiate career, you should not have to complete a new promissory note with each loan request. (Transfer students will be required to complete new MPNs when transferring to ULM.)
- Your MPN is similar to a line of credit. You will be responsible for repaying all amounts which are borrowed against that note. Be responsible. Keep good records of what you borrow.
- Make certain you know who your lender and guarantor are. Your initial MPN will be invalid if you change lenders.
What other events invalidate my MPN?
- You submit a request in writing to the lender that you no longer wish to borrow under that MPN.
- Ten years have passed since you signed the MPN.
- One year has passed since you signed an MPN, and no loans have been disbursed to you.
- You transfer to ULM from another college or university.
Loan Disbursements:
If the lender and guarantor approve your certified loan amount, ULM will receive your funds electronically (EFT). Federal regulations require that loan funds be sent in two separate disbursements, one in the Fall and one in the Spring. If you have a Fall/Spring loan or a Summer I & II loan, you will receive funds within approximately the first two weeks of class.
You must, of course, maintain your eligibility to receive your loan disbursements. This includes, but is not limited to, maintaining Satisfactory Academic Progress, maintaining at least 1/2 time enrollment (Graduates MUST have at least 5 GRADUATE hours of enrollment), and completing any requested documentation.
All first-time borrowers are required to complete an Entrance Counseling Session before your loan will be transmitted to the guarantor. If you have repaid all of your previous loans, you will be asked to complete another Entrance Session.
If you call your guaranty agency and request an anticipated disbursement date, please remember that this date does NOT mean your refund from ULM will be available on that date. The Financial Aid Office receives electronic funds transmissions twice a week. If you meet eligibility requirements, these disbursements are credited to your account, and the Controller's Office then produces the appropriate refund for you. With the exception of the first scheduled refund date, the Indian Bank mails paper check refunds each week, or by direct deposit. You can apply for direct deposit at the Indian Bank or Student Account Services (Administration Building 1-5A).
Additional Information:
Cancellations:
If you wish to cancel your loan prior to disbursement, contact the Financial Aid Office either in writing, in person or tribe mail.
Interest Rate:
The interest rate on both Subsidized and Unsubsidized Loans are variable and adjusted annually on July 1st. The interest rate is not to exceed 8.25%. For Subsidized Loans, the interest that accrues is paid by the Department of Education during periods of authorized deferment. For Unsubsidized Loans, you are required to pay all interest, even during a period of authorized deferment. You have the option of capitalizing your interest while you are in school; however, please be aware that by doing so, you will ultimately owe more money when you graduate or leave school. Capitalized interest increases the principal balance of your loans and the total amount of interest costs you incur. Contact your lender for more information.
If you are in default, you are not eligible for a deferment! Under certain circumstances, you have the right to postpone the repayment of your Stafford Loan. Deferments are not automatic. You may request, from your lender, a deferment application which explains the requirements. You should complete the student section and take it to the Registrar's Office. They will complete the registration information and return it to your lender. You are eligible for a deferment if you are enrolled at least 1/2 time (6 hours) or are engaged in a full-time course of study in a graduate fellowship program. Contact your lender for more information about deferment eligibility requirements.
You will receive a 6 month grace period before the first payment of your Stafford Loan must be made. The grace period begins the day after you cease to be enrolled at least half time. Your first payment will be due within 45 days after your grace period ends. You must make payments on your loan even if you do not receive a bill or repayment notice. Be certain you know who you are making payments to, what amount you are required to pay, and where you must mail it. There will be no penalty for prepaying any portion of your loan. Check with your lender about grace periods and the following repayment options:
- Standard Repayment Plan
- Graduated Repayment Plan
- Extended Repayment Plan
- Income-Sensitive Repayment Plan
- Consolidation
Remember:
LOANS MUST BE REPAID.
Default is defined as the failure of the borrower to fulfill the contract or agreement by not making installment payments when due or by not complying with other terms of his/her Promissory Note. Payments are due after your 6 month grace period has ended following your graduation or your departure from school. You must make payments on your loan even if you do not receive a bill or repayment notice. It is important for you to know who holds the rights to your loan, as well as where all payments should be made. A few consequences of default:
- Loss of federal and state income tax refunds
- Loss of other federal or state payments
- Legal action against you
- Collection charges (including attorney fees) may be assessed against you
- An increase in your interest rate
- Loss of eligibility for other student aid and assistance under most federal benefit programs
- Loss of eligibility for loan deferments
- Negative credit reports
- Garnishment of your wages
www.ed.gov/offices/OSFAP/DCS/default.html
This link will take you to the Department of Education's site which contains important default and repayment information.
Entrance Counseling
Federal regulations require all students who have not previously received Stafford Loan funds to attend an Entrance Counseling Session. This is an attempt to make you a better informed and responsible borrower. ULM requires that, if you are applying for a loan for the first time, you must complete this session before your loan will be transmitted to your guarantor.
link: entrance loan counseling
Exit Counseling
Federal regulations require all students who have received Stafford Loan funds at any time during their academic career to attend an Exit Counseling Session. This session will help you make better decisions as you enter the repayment period of your loan. The sessions are generally conducted by various lending representatives and are offered prior to commencement ceremonies. Only if you are unable to attend the session in person should you complete the on-line version.
link: exit loan counseling
