Financial Aid: Available Loans

Federal Perkins Loan Program (PERK)

This program uses both federal and state funds. Annual loan limits are established at $4,000 for undergraduate students and $6,000 for graduate students. Aggregate borrowing limits are set at $20,000 for undergraduate students and $40,000 for graduate and professional students. Students must provide their driver's license number at the time of application. The monthly minimum repayment is set at $40. There will be no repayment of principle or interest until nine months after the completion of the grace period.

Note: There are a variety of reasons why Perkins Loan payments may be deferred such as, economic hardship, military service, etc. For more complete information please refer to the promissory note that is a part of your loan agreement.

Federal Family Education Loan Program (FFELP)

In order to receive these loans, except for the PLUS, you must go through the entire financial aid application process.

Subsidized Student Loan:

Eligibility:
Student must be a citizen or permanent resident.
Must have a complete Financial Aid file in the Financial Aid Office.
No interest accrues during the in-school period.
 
Limits: Loan Limits: - (effective July 1, 2007)
$3,500 first year (0-29 credit hours complete)
$4,500 second year (30-59 credit hours complete)
$5,500 other undergraduate (60+ credit hours complete)
$8,500 Graduate and Professional
 
Aggregate Limits:
$23,000 Dependent Undergraduate
$46,000 Independent Undergraduate
$138,500 Graduate and Professional

* Note: Both dependent and independent students may receive the subsidized Stafford Loan. However, if the maximum Subsidized loan limit is not received, the student may apply for an Unsubsidized Stafford Loan to make up the difference.

Advantages:
* Low interest rate
* No interest accrues while in school and in grace period.
* Six month grace period upon graduation or termination before repayment begins.
 
Cost/Rates:
* Fixed rate of 6.8%

Unsubsidized Student Loan:

Eligibility:
The SLS has been incorporated into the Unsubsidized Student Loan Program.
Borrowers who do not qualify for Subsidized Stafford Loans; and those who do qualify for Subsidized Stafford Loans but have not reached the established Stafford Loan limit.
Must have a complete Financial Aid file in the Financial Aid Office.
This is an unsubsidized loan. Interest accrues during in-school period.

Limits: Loan Limits - (effective July 1, 2007)

For DEPENDENT Students
$3,500 first year
$4,500 second year
$5,500 other undergraduate
$8,500 graduate and professional		 Aggregate Limits

$ 23,000
For INDEPENDENT Students
$7,500 first year
$8,500 second year
$10,500 other undergraduate
$20,500 graduate and professional 		Aggregate Limits

$46,000 Undergraduate
$138,500 Graduate and                 Professional
Advantages:
Low interest rate
Interest accrues while in school and in grace period
Non-need based loan
Six month grace period upon graduation or termination before principle repayment begins.
 
Cost/Rates:
Fixed rate of 6.8%

Plus Loans:

Eligibility:
Parents of dependent undergraduate students
Minimal credit check is required

Loan Limits: Cost of Attendance per student less other aid.
Aggregate Limits: Cost of Attendance per student less other aid.

 
Advantages:
Low interest rate
Minimal credit check
High balance loan program
Repayment term: up to 10 years
 
Cost/Rates:
Interest Rate: Fixed rate of 8.5%
Fees:
3% Origination Fee
1% Default Fee

Federal Direct Consolidation Loans

Borrowers who have loans under the FFELP (Federal Family Education Loan Program) may consolidate these Federal loans through a Direct Consolidation Loan if they are unable to negotiate satisfactory, income-sensitive repayment terms with their current loan services. The borrower determines whether or not he or she is satisfied with the repayment terms offered by the loan servicer. The toll free number for loan consolidation information is 1-800-557-7392. For all other information on student financial aid, call 1-800-4FEDAID.

Borrowers who have Direct Loans and other Federal Student Loans (such as FFELP, Perkins and those administered by the Public Health Service) may consolidate all of their loans into a single Individual Education Account, leaving the borrower with one affordable monthly payment.

Defaulted borrowers may also consolidate their loans and benefit from the Income Contingent repayment Plan.

Direct Consolidation Loans are subject to the same terms and conditions as regular Direct Loans. The interest rate for student loans is variable and cannot exceed 8.25 percent. The interest rate for parent loans cannot exceed 9 percent. There are no fees charged.

Borrowers may consolidate any or all of their student loans and take advantage of the range of repayment options available under Direct Loans.

There is no limit on the loan amount that may be consolidated through a Direct Consolidation Loan.

Alternatives for Financing

Alternative Loans

Students may choose to borrow private funding through a wide variety of lenders. Students may search and compare lenders and their benefits by visiting studentloanlistings.com, simpletuition.com and other similar websites.

Tuition Pay

Tuition Pay is not a loan, but a tuition payment plan that allows students to pay their full year educational expenses, interest-free, over a period of ten months. It is available to full-time students only. For more information, call AMS toll-free at 1-800-635-0120 or contact the Financial Aid Office at (203)837-8580.

WCSU Payment Plan

Western Connecticut State University offers students the ability to defer half of their bill by applying for WCSU's Payment Plan. If eligible, you may elect to participate by paying half of the balance due plus a $35 enrollment fee. The remaining balance is due in two equal payments on Sept. 15 and Oct. 15. WCSU Payment Plan information is available in the Financial Aid Office.

Loan Repayment

Borrowers may choose from among a variety of repayment plans for Loans administered under the Federal Family Education Loan Program:

  • Standard plan- a fixed annual repayment amount (generally, $50 per month) paid over a fixed period of time, not to exceed 10 years.  
  • Extended repayment plan- a fixed annual repayment paid over a period longer than 10 years. The borrower must still pay a yearly minimum (usually at least $600 a year as specified in amended Section 428 (b)(1)(L) of the Higher Education Act), but has a longer time to repay.  
  • Graduated repayment plan- annual payment amounts at two or more levels paid over a fixed or extended period of time. Payments must be at least half, but not more than one-and-one-half of what the payment would be if the loan were repaid under the standard repayment plan.  
  • Income contingent repayment plan-varying annual repayment amounts based on the borrower's adjusted gross income (and that of the borrower's spouse if a joint return is filed), paid over a period not to exceed 25 years. Note: PLUS borrowers are not eligible for this plan.  

Payments will vary in relation to the "appropriate portion" of the borrower's (and spouse's) annual income. The Guarantor will determine the appropriate portion.

A borrower who has defaulted may be required to repay the loan according to an income contingent repayment plan.

If the borrower does not select one of the four repayment plans, the Guarantor will choose a standard, extended or graduated repayment plan for the borrower.

The borrower may change the type of payment plan he or she originally chose under terms and conditions the Guarantor will establish.

On a case by case basis, the Guarantor may approve an alternative repayment plan if the borrower can demonstrate that one of the plans above cannot accommodate the borrower's exceptional circumstances. The alternative plan may not exceed the cost of any of the four plans discussed above.

The borrower may accelerate his or her payments without penalty.

Borrower defenses Against Repayment

The Department will specify in the regulations what acts or omissions on the part of a school a borrower may assert as a defense against repaying a Federal Family Educational Loan. However, a borrower may not recover from the Department an amount that exceeds what he or she has repaid on the loan.

Deferments

During deferment periods, payment of principal will be postponed.

Deferments may be granted for:

  • at least half-time study at a post secondary institution
  • study in an approved graduate fellowship program or in a rehabilitation
  • training program for the disabled
  • unemployment (up to three years)
  • economic hardship (up to three years)

A Deferment is not available for a medical internship or residency, for Direct PLUS and Direct Consolidation borrowers.

Bankruptcy

The limits that currently exist in Section 532(a)(6) of the Bankruptcy Code to prevent the discharge of FFELs in bankruptcy also apply to Direct Loans. (The limits specify that student loans will not be discharged except in cases where the loans first became due more than seven years before the date the borrower and his or her dependents incurred hardship. These provisions apply to both Chapter 7 and Chapter 13 bankruptcy cases).


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