For many students and families, educational loans are a necessary part of the process of paying for college. The Financial Aid Office offers and certifies loans for students, as well as federal direct PLUS loans for parents of undergraduates. All of these loan programs offer low interest rates, deferment and forbearance options, and a maximum repayment period between 10 and 25 years. Remember, only borrow what you need to be a responsible borrower.
Federal Direct Loans
The federal direct loan is the most widely-used loan for college students and is available to both graduate and undergraduate students. There are two types of federal direct loans and your eligibility for both is determined using your financial aid application.
- Direct subsidized loans are interest-free while you are enrolled in college at least half-time.
- Direct unsubsidized loans accrue interest (4.29% UG, 5.84% GRAD- July 1, 2015) while you are enrolled. You can choose to pay the interest each month while in school, or allow the interest to accumulate.
- Due to the continued sequester provisions in the Budget Control Act of 2011, loans with a first disbursement after October 1,2016 the fee will increase very slightly. For DL Subsidized and Unsubsidized it will go from 1.068% to 1.069%.
Borrowing limits for each academic year depend on your class level:
- $5,500 First Year (maximum $3,500 may be subsidized)
- $6,500 Sophomore (maximum $4,500 may be subsidized)
- $7,500 Juniors/Seniors (maximum $5,500 may be subsidized)
- $20,500 Graduate Students—Unsubsidized
Applying for a Loan
To apply for federal student aid, you need to complete the FAFSA or Free Application for Federal Student Aid, https://fafsa.ed.gov/. Completing and submitting the FAFSA is free and quick, and it gives you access to the largest source of financial aid to pay for college.
In addition, The College of Idaho uses your FAFSA data to determine your eligibility for state and school aid, and some private financial aid providers may use your FAFSA information to determine whether you qualify for their aid.
Applying isn’t the last step; your FAFSA has to be processed, and then you get an Expected Family Contribution (EFC), which The College uses to figure out how much aid you can get.
1) Accept Your Loan on web advisor
- If the loan is included in your award you can accept in Web Advisor. Under the Student Center tab, in the Finances section, select "Accept or reject my financial aid awards." You can accept or decline the loan. To request an adjustment to an award submit in writing or via email, ([email protected]) the award name and the amount you wish to accept.
- If you do not have the loan included in your award, submit a request to [email protected].
2) Complete Your Master Promissory Note
If you completed a Direct Loan Master Promissory Note (MPN) in a prior academic year at The College of Idaho, you do not need to complete a new MPN, your existing MPN covers your Direct Loan borrowing for up to ten years.
- Go to the Direct Loan website at http://StudentLoans.gov/.
- Click on the green "Sign In" button.
- Log in with your FSA ID.
- Click on "Complete Master Promissory Note."
- Click on "Subsidized/Unsubsidized."
- Complete all required fields (indicated by red asterisk) in the Personal Information section.
- Continue with Steps 2, 3 and 4, including the electronic signature. You will have the opportunity to print a copy of your completed, signed MPN. The College of Idaho Financial Aid Office will be notified when you have completed and signed your MPN.
3) Entrance/exit Counseling
All first time federal direct loan borrowers are required to complete an entrance counseling requirement. The entrance counseling session provides you with information about your rights and responsibilities as a borrower. After reading the information, you will be quizzed on your knowledge.
Note: If you completed the entrance counseling requirement in a prior academic year at The College of Idaho or another institution, you do not need to complete the requirement again.
You will not receive any disbursements of your federal direct loan until we have the entrance counseling requirement or confirmation of prior borrowing. To complete the requirement, follow these steps:
- Go to the Direct Loan website at http://StudentLoans.gov/.
- Click on the green "Sign In" button.
- Log in with your FSA ID. You will see a screen with several options.
- Click on "Complete Entrance Counseling." Follow the prompts until you reach the School and Loan Information screen.
- For School State, select IDAHO.
- For School Name, select THE COLLEGE OF IDAHO.
Work through the entrance counseling information, responding to the quiz questions along the way. When you have finished, The College of Idaho Financial Aid Office will be notified.
Exit Counseling; student loans, unlike grants and work-study, are borrowed money thatmust be repaid, with interest, just like car loans and home mortgages. Youcannot have these loans canceled because you didn’t like the education youreceived, didn’t get a job in your field of study or because you’re havingfinancial difficulty. Loans are legal obligations that you’ll have to repay.
- Is required before you withdraw, graduate, or drop below half-timeattendance (even if you plan to transfer to another school)
- Helps you understand your rights and responsibilities as a studentloan borrower
- Provides useful tips and information to help you manage your loans
The U.S. Department of Education’s (the Department’s) two majorfederal student loan programs are the William D. Ford FederalDirect Loan Program (Direct Loan ProgramSM) and the FederalFamily Education Loan Program (FFEL Program).Loans made through the Direct Loan Program are referred to asDirect LoansSM. You borrow directly from the Department. DirectLoans include Direct Subsidized Loans and Direct UnsubsidizedLoans, Direct PLUS Loans, and Direct Consolidation Loans.You repay these loans directly to the federal government.Loans made through the FFEL Program are referred to as FFELLoans. You borrow from a bank or other private lender, and theloans are backed by the federal government. FFEL Loans includesubsidized and unsubsidized Federal Stafford Loans, FederalPLUS Loans and Federal Consolidation Loans.You repay a FFEL Loan to the bank or other private lender thatmade the loan.
4) Receiving Your Loan Funds
Loans are generally divided evenly over the two semesters (Fall/Spring) of the academic year. If your promissory note, entrance counseling is complete and you have begun attending classes, the loan funds will be applied to your student account at the beginning of each semester.
If you are offered a student loan as part of your award package and you accept the offer, you have the right to cancel all or a part of your loan within the first 14 days after your student account is credited with your student loan funds.
federal direct plus Loans
The federal direct PLUS program is a popular financing option for graduate students, and parents of undergraduate students.
- The maximum PLUS loan amount you can borrow is the cost of attendance minus any other financial assistance received.
- Interest rates for direct PLUS Loans. These are fixed interest rates for the life of the loan.
- For Direct PLUS Loans first disbursed on or after July 1, 2015 and prior to July 1, 2016 the fixed interest rate is 6.84%.
- Origination fee of 4.272% will be deducted from each disbursement on disbursemnts on or after October 1, 2016.
- A credit check is conducted when you begin the loan application process. For more information about the credit check please visit the FAQ section of www.Studentloans.gov.
- Undergraduate students are required to complete the Free Application for Federal Student Aid (www.fafsa.ed.gov/) in order for their parents to use the direct PLUS loan program.
- Undergraduates whose parents do not qualify for a direct PLUS loan can borrow additional federal direct loan funds.
Private Loans vs. Federal Loans
Many banks, credit unions, and other financial institutions offer private (non-federal) student loans, sometimes called alternative loans. Private loan programs may offer interest rates and terms that are competitive with those of federal loans. However, as you consider your borrowing options, you should keep in mind that federal student loans are required by law to provide a range of flexible repayment options, including income-based repayment plans, and loan forgiveness benefits, which private loans are not required to provide. Also, federal direct loans are available to students regardless of income.
Know What You Owe
The National Student Loan Data System (NSLDS) https://www.nslds.ed.gov/nslds_SA/ is the U.S. Department of Education's (ED's) central database for student aid. NSLDS receives data from schools, guaranty agencies, the Direct Loan program, and other Department of ED programs. NSLDS Student Access provides a centralized, integrated view of Title IV loans and grants so that recipients of Title IV Aid can access and inquire about their Title IV loans and/or grant data.
Understanding the repayment process for your federal student loans can go a long way toward building a solid financial foundation.
Remember, federal student loans are real loans, just like car loans or mortgages. You must repay a student loan even if your financial circumstances become difficult. Your student loans cannot be canceled because you didn’t get the education or job you expected, or because you didn’t complete your education (unless you couldn’t complete your education because your school closed).
It is important for student borrowers to know loan balance amounts and repayment options both before and after graduation. We encourage students to work with their loan servicers and the U.S. Department of Education to stay informed about their loans. Students should make regular monthly payments on loans in order to maintain a good credit rating. Complete loan repayment information through the U.S. Department of Education is available at Repay Your Loans (https://studentaid.ed.gov/repay-loans).
Upon ceasing (Graduation/transferring/leave of absence) enrollment and prior to beginning repayment, you will be required to complete exit counseling if you have received any of the following:
- Subsidized/Unsubsidized Stafford or Graduate PLUS loan through the Direct Loan (DL) and/or Federal Family Education Loan (FFEL) programs
- Federal Perkins loan
Exit counseling (www.Studentloans.gov) will provide information about borrower rights, responsibilities regarding loan repayment. To determine how much you have received in federal loans, you can use the National Student Loan Data System (NSLDS) to track your funds.
For questions about your individual student loans, you should contact your lender or the current holder of your loan. To determine the holder of your loan, you should consult NSLDS. Please note that private (non-federal) education loans are not included in NSLDS.
If you encounter difficulties with your lender, you may wish to contact the U.S. Department of Education’s Federal Student Aid Ombudsman. The Ombudsman provides borrowers with information and guidance to resolve concerns about their student loans. As an advocate, the Ombudsman can research problems and determine if you have been treated fairly. Here is the contact information for the Ombudsman’s office:
U.S. Department of Education
FSA Ombudsman Group
830 First Street, N.E., Mail Stop 5144
Washington, D.C. 20202-5144