Understanding Financial Aid (How your financial aid is calculated) - - PowerPoint PPT Presentation

• Understanding Financial Aid
• (How your financial aid is calculated)
• Types of Direct Loans
• Grade Levels, Aggregate Loan Amounts
• Grace Period – Deferment Options
• Student Loan Repayment
• Using Your Student Loan Money Wisely
• Delinquency - Consequences
• Loan Application Process
• Your Responsibility as a Borrower - Reminders

Financial aid allows you to obtain a college education. It is important to know the eligibility requirements for federal and state grants. Federal Student Aid Video

Grants:

Federal and state grants provide students with financial assistance and in most cases, DO NOT HAVE TO BE REPAID. Eligibility may vary.

Tuition Waiver:

The California College Promise Grant (BOGW), waives the tuition only ($46 per unit). There is no monetary value for this

• waiver. It is applied to your account.

Scholarships:

Scholarships are often based on academic merit, a specific program of study, special talents, etc. These can be awarded by private donors, agencies, businesses, and organizations. Be aware of scholarship scams. William D. Ford Federal Direct Loans: Loans made to students directly through the U.S. Department

• f Education

 Cost of Attendance – Institutional Budget

• A student can never exceed the COA and loan amount ceilings

 EFC – Expected Family Contribution

• The expected family contribution is an amount that a family is expected

to contribute towards a student’s college education.

• The EFC is calculated by the Federal Government when you file a

FAFSA application.

 Calculating your Need: COA (Cost of Attendance) – (EFC) – (Financial Aid) = Unmet Need

Enrollment Living w/parent Away from Parent(s) 2 Semester 2 Semester Fees $ 1,338 $ 1,338 Books & Supplies $ 1,917 $ 1,917 Food & Housing $ 6,786 $15,084 Transportation $ 1,134 $ 1,278 Personal Expenses $ 3,564 $ 3,996 Total: $14,739 $23,613

Cal l State Fu Fulle llert rton C Curr rrent C COA SCC SCC Cu Current CO COA

Enrollment Undergrad. Commuter Undergrad in Dorm 2 Semester 2 Semester Fees

$6,933 $6,933

Books & Supplies

$2,058 $2,058

Room/Board

$6,096 $15,852

Transportation

$1,578 $1,472

Misc.

$1,704 $1,704

Loan Fee

$60 $60

Total:

$18,429 $28,079

Subs bsid idiz ized Unsubsidiz idized

Are for undergraduate students with demonstrated financial need, as determined by federal regulations Are not based on financial need No interest is charged while you are in school at least half-time and during deferment periods Interest is charged during all periods, even during the time you are in school and during grace and deferment periods Current interest rate for 2019-2020 loans is 4.53% with an origination fee of 1.062% For current interest rates and origination fees click the following link: https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsidized

Dire Direct P Plu lus L Loans: :

Are unsubsidized loans for the parents of dependent students and for graduate/professional students. Interest is charged during all periods. Current interest rate is: 7.08% with an origination fee of 4.248%

You must always be actively enrolled AND attending in at least 6 payable units AT ALL TIMES. This applies to late start classes.

Full Time:

12 units or more

Three Quarter Time:

9-11.9 units

Half Time:

6-8.9 units

*Time limitation on Direct Subsidized Loan Eligibility for FIRST-TIME BORROWERS on or

after July 1, 2013 – in general you may not receive Direct Subsidized Loans for more than 150% of the published length of your program. (AA/AS degree = 3 years max) Refer to your loan

packet for further information.

School Policy: *The Financial Aid Appeals Committee reserves the right to decline any student loan request to students not carrying a full-time load and/or have already exceeded over 90 attempted units. *Any future borrowing request may be declined if the student has reached at least half of the students entire undergraduate eligibility.

Subsidized and/or Unsubsidized Dependent Student Independent Student Grade Level One: 1-29 units completed $ 3,500

$1,750 per semester

$ 3,500

$1,750 per semester

Grade Level Two: 30+ units completed $ 4,500

$2,250 per semester

$ 4,500

$2,250 per semester

Additional Unsubsidized $ 2,000*

$1,000 per semester

$ 6,000*

$3,000 per semester

 The grace period gives you time to get financially settled and to select your repayment plan  You only get ONE, and it only lasts 6 months  You will receive your repayment obligation, which includes:

• Date payments are to begin (Payment is expected even if you do not receive a payment booklet)
• Monthly payment amount
• Repayment terms
• Current principal balance
• Interest Rate

The Grace Period is a set period of time after you graduate, leave school, or drop below half-time enrollment before you must begin repayment on your loan.

An authorized period of time during which you can postpone payment on your loan. Interest does not accrue on subsidized loans, however any unsubsidized loans, interest will continue to accrue. Examples of Deferments:

In school at least half-time after a there has been a lapse in enrollment In a graduate fellowship program In an approved rehabilitation program Unable to find full-time employment Experiencing economic hardship Refer to the Exit Counseling for more details

Standard Repayment Plan

Payments are a fixed amount that ensures your loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).

Graduated Repayment Plan

Payments are lower at first and then increase, usually every two years, and are for an amount that will ensure your loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).

Extended Repayment Plan

Up to 25 years, payments may be fixed or graduated in amount that ensures that your loan will be paid in full in 25 years

Income Based Repayment (IBR)

Up to 25 years, with forgiveness of any remaining balance-payments will be the lesser of 15% of your income or 10 year standard plan

Pay as You Earn Repayment

Your monthly payments will be 10 percent of discretionary income, but never more than you would have paid under the 10-year Standard Repayment Plan. Payments are recalculated each year and are based on your updated income and family size. You must update your income and family size each year, even if they haven’t changed.

Income Contingent Repayment

Up to 25 years with forgiveness of any remaining balance-payments will be lesser of 20% of income OR the amount you would pay on a 10-year Standard Repayment multiplied by a percentage based on your income.

Repayment Options Video

• Use student loan money ONLY

LY for school-related expenses, such as tuition, housing, books, transportation, and food.

• You may send any loan money not needed for educational

purposes back to your servicer.

• The more loans you receive now, the more money you are

required to repay later, for example:

$ 4,500 Loan Amount 5% Interest Rate (Estimated)

114 Number of Monthly Payments

• OR-

$ 6,000 Loan Amount 7.6% Interest Rate (Estimated)

120 Number of Monthly Payments $ 50 Monthly Payments $5,662 Total Loan Amount $ 72 Monthly Payments $8,584 Total Loan Amount

Failure to make payments when due can lead to delinquency and can lead to default

Consequences of Default:

• Default will remain on your credit score for a minimum of 7 years
• Damage to your credit rating which could prevent you from buying a car/home/etc.
• Garnishment of your wages
• Legal action against you
• Loss of deferment eligibility
• Loss of your professional license
• Withholding of your federal and state income tax refunds

To DEFAULT means you failed to make your payments on your student loan as scheduled according to the terms of your master promissory note (the binding legal document you signed at

the time you took out your loan).

1.

Complete online Entrance Counseling at www.studentloans.gov (Refer to packet instructions)

2.

Complete the Master Promissory note at www.studentloans.gov

3.

Complete the Direct Loan Request form, Required Components Form, and Reference Sheet.

4.

Accept your loan award on your WebAdvisor (Self-Service).

If you borrow unsubsidized loans, the financial aid office will accept the award on the student’s behalf.

Origination:

The following documents/steps must be submitted/completed before

• rigination of your loan can be processed.

MPN DEFINITION: MPN must have the following: Promise to Pay SSN (Social Security Number) Legally Enforceable Driver’s License/State issued ID # Terms and Conditions E-mail address Rights and Responsibilities References: Must be 2 different addresses Valid for 10 years from the date signed MPN MUST BE COMPLETED ON

All online components must be completed at the following website:

www.studentloans.gov

You must use this website to complete the following:

1. Entrance Counseling 2. Master Promissory Note (MPN) 3. Exit Counseling

All SCC borrowers must complete the Exit Counseling before the end

• f the school year!

Also:

• Deferment/Forbearance
• All Loan Servicing needed

Disbursements – There is only 1 per month, that means you must complete ALL the components in order to receive a disbursement. There is a total of 2 disbursements per semester.

If any component is missing or completed at a later time, you will receive the next available disbursement on our schedule.

The following must be completed prior to disbursement:

1.

Submittal of all required documents.

2.

Complete the Entrance Counseling and MPN at www.studentloans.gov

3.

Maintain active enrollment in 6 or more units at ALL TIMES, NO EXCEPTIONS.

4.

Maintain enrollment in PAYABLE classes. *Students will receive a “revised” award letter after accepting the student loan

SCC’s Disbursement Schedule

Make sure to sign up with BankMobile Via your WebAdvisor

Available dates vary! See flyer or contact financial aid for more information.

 Notify your servicer if you are having difficulty making your monthly

payments

 Notify your servicer of any changes in your status, including when you

change schools, drop below six units or when you graduate/transfer

 Notify your servicer and school of any changes to name, address, and

phone numbers

 Complete the Exit Counseling online before the end of the academic

year**

CashCourse (www.cashcourse.org): Provides students with Free Financial Literacy which includes money management, financial literacy, and budgeting. Use CashCourse to:

Create a budget Learn about benefits of checking & savings accounts Protect your credit Plan for retirement

Reminde ders:

• Keep all your records
• Know who your servicer is (IMPORTANT)
• Borrower Conservatively
• Always r

remain in “ “activ ively ly enro rolle lled” in 6 6 unit its o

• r more

re

Helpful ful W Websi sites: s:

www.studentloans.gov www.NSLDS.ed.gov www.studentaid.gov www.cashcourse.org