CNR Arts & Sciences Financial Aid: Educational Loans

EDUCATIONAL LOANS

Educational loans are monies awarded to students to aid in the payments of college-related expenses. Loans, unlike grants or scholarships, have to repaid. There are four educational loans available to CNR students: Federal Perkins, Federal Direct Subsidized, Federal Direct Unsubsidized and Federal Parents' Loans for Undergraduate Students (PLUS) loans. Each is described below.

Federal Perkins Loans
Application Procedures - students must:

complete a Free Application for Federal Student Aid (FAFSA)
complete three promissory notes
complete a loan entrance interview form

All the aforementioned forms are available through the College Financial Aid Office.

Selection of Recipients and Allocation of Awards - loans are available to students enrolled at least half-time in approved post-secondary institutions. In awarding Perkins Loan funds the College will give priority to students with "exceptional need." Award Schedule - the amount which may be borrowed is up to $20,000 for undergraduate study, $40,000 for graduate study.

Interest Rate - the current interest rate, payable during the repayment period, is five percent of the upaid principal.

Fees and Costs - None.

Rights and Responsibilities of Recipients - Repayment begins nine months after graduation or leaving school and may extend over a 10-year period. Loan payments may be deferred for up to three years for certain categories of borrowers, including Public Health Services officers, the temporarily disabled, teachers at designated low-income schools, and full-time Peace Corps, VISTA, or other national volunteers. A professional internship deferral is limited to two years. Other Information - Forms, as well as specialized information on loan cancellation provisions for borrowers who go into certain fields of teaching or specified military duty, are available in the Financial Affairs Office.

Federal Direct Subsidized Loans
Application Procedures - a student must:

complete a Free Application for Federal Student Aid (FAFSA);
complete three promissory notes
complete a loan entrance interview form

All the aforementioned forms are available through the College Financial Aid Office.

Selection of Recipients and Allocation of Awards - to eligible, a student must be:

a U.S. citizen or permanent resident alien;
enrolled in or admitted as a matriculated student, on at least a half-time (six credit) basis;
not be in default or refund status for any federal Title IV program at any institution;
have been determined to be eligible or ineligible for a Pell grant;
if a male born after 1957, be registered with the Selective Service;
have a Social Security number;
demonstrate financial need;

Award Schedule - the student may borrow up to $23,000 in subsidized loans as an undergraduate student with the following maximums:

$2,625 as a freshman
$3,500 as a sophomore
$5,500 as for each of the remaining years

Loan funds may not be disbursed earlier than ten days before the first day of classes.  However, the first installment of a loan to any student who is entering the first year of a program of undergraduate study at CNR, who has not previously received a loan, may not be disbursed earlier than 30 days after the first day of class the start of classes.  Two-semester loans will be disbursed separately for each semester.  Single-semester loans will also be disbursed in two parts within the semester.  Three semester loans will be disbursed in three parts for each semester.

Interest Rate - the interest rate is a variable rate, adjusted annually based on the 91-day Treasury bill plus 3.1 percent with a cap of 8.25 percent.

Fees and Costs - these loans are subject to a 3 percent origination and insurance fee.  These fees will be subtracted from the amount that is actually credited to the student's college account.  However, the student will be responsible for repayment of the full amount borrowed.

Rights and Responsibilities of Recipients - Federal Direct Subsidized Loans are subsidized, meaning no interest must be paid on the loan while the student is attending classes or during a 6-month grace period after the student leaves school.  Additional payment deferrals are available through the Federal government.  Further information is available through the Financial Aid Office.  Repayment begins after the student leaves school or drops below half-time (6 credits) enrollment in any semester.

Students may choose may choose one of four repayment options:

Standard - requires payments of up to 10 years
Extended - requires fixed payments over a 12-to-30-year schedule
Graduated - requires smaller initial payments and larger ones in succeeding years
Income Contingent - requires payments according to the borrower's income

Borrowers may change his/her repayment options as often as he/she likes without penalty.

Federal Direct Unsubsidized Loan
Application Procedures - same as Federal Direct Subsidized Loan.

Selection of Recipients and Allocation of Awards - same as Federal Direct Subsidized Loan, except that the student must be declared independent or have his/her parents' PLUS loan rejected.

Award Schedule - the student may borrow up to $23,000 in unsubsidized loans as an undergraduate student. The yearly maximums are as follows:

$4,000 per year the first two years
$5,000 per year the remaining years

Interest Rate - same as Federal Direct Subsidized Loan.

Fees and Cost - same as Federal Direct Subsidized Loan.

Rights and Responsibilities of Recipients - same as for the Federal Direct Subsidized Loan, except the student is responsible for interest payments while in school and during deferment periods. The borrower may pay the interest as it accrues or capitalize the interest payments, that is, the interest not paid is added to the principal of the loan and interest is calculated on the new principal.

Federal Parents' Loans for Undergraduate Students (PLUS)
Application Procedures - parent of the student must:

obtain application from participating lending institution (bank, credit union, etc.);
return completed application to the Financial Aid Office at the College;
application is sent from the College to the lending institution;
application is sent from the lending institution to the New York State Higher Education Services Corporation.

Selection of Recipients and Allocation of Awards - parent(s) of the student must:

be a U.S. citizen or permanent resident alien;
the natural or adoptive parent or guardian of a dependent full-time undergraduate student.

Award Schedule - the maximum annual borrowing amount is the total cost of education less any financial aid that the student is receiving minus the expected family contribution (efc).  In order to receive this aid, the parent must submit a PLUS application to the school.  Unlike Federal Direct loans, parents can be denied access to a PLUS due to adverse credit histories.  Tardiness in paying bills is not considered an adverse credit history.

Interest Rate - the interest rate is based on the 52-week Treasury bill plus 3.1 percent and is adjusted annually.  The interest rate is capped at 10 percent.

Fees and Costs - an origination fee of 4 percent will be assessed.

Rights and Responsibilities - parents begin repayment shortly after disbursement of the check.  Deferments are based on the parent's in-school status, not the student's.