Financial Aid: Available Loans
FEDERAL DIRECT LOAN PROGRAM
Direct Loans are low-interest loans for students and parents to help pay for the cost of a student’s education after high school. The lender is the U.S. Department of Education (the Department), though the entity you deal with, your loan servicer, can be a private business.
Subsidized Student Loan:
- Student must be a citizen or permanent resident.
- Loan is awarded on the basis of financial need.
- Must have a complete financial aid file with the Office of Financial Aid.
- Low interest rate.
- No interest accrues while in school and in grace period.
- Six-month grace period upon graduation or termination before repayment begins.
Unsubsidized Student Loan:
Note: This is an unsubsidized loan. Interest accrues while in school and in grace period.
- 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 with the Office of Financial Aid.
- Low interest rate.
- Non-need based loan.
- Six-month grace period upon graduation or termination before principle repayment begins.
Borrowing Limits for Subsidized & Unsubsidized Student Loans:
Loan limits are determined by a student’s status or the number of completed credit hours he/she has:
First Year Student (0-29 credit hours completed)
Second Year Student (30-59 credit hours completed
Other Undergraduate (60 + credit hours completed)
Graduate & Professional (undergraduate degree requirements completed)
Loan Limits are as follows:
For Dependent Students:
$5,500 First year ($3,500 may be subsidized)
$6,500 Second year ($4,500 may be subsidized)
$7,500 Other undergraduate ($5,500 may be subsidized)
For Independent Students:
$9,500 First year ($3,500 may be subsidized)
$10,500 Second year ($4,500 may be subsidized)
$12,500 Other undergraduate ($5,500 may be subsidized)
Aggregate Limits for FFEL Loans
$31,000 as a dependent undergraduate student
$57,500 as an independent undergraduate student ($23,000 may be subsidized)
$138,500 as graduate or professional student
Entrance Interview Requirement
First time borrowing students are required to complete an entrance counseling session. Included in this session is comprehensive information on the terms and conditions of the loan and of the borrower’s responsibilities. Upon acceptance of this loan students must complete their entrance interview at www.studentloans.gov. By completing this exercise, you will have familiarized yourself with the Stafford Student Loan program. This requirement needs to be fulfilled prior to disbursement of the loan.
Exit Interview Requirement
Students who have borrowed under the Federal Stafford Student Loan program during their academic career at Western Connecticut State University and have stopped attending based on graduation, withdrawal, or less than half time registered status must complete an exit interview. This counseling session will provide information on terms and conditions concerning repayment or forgiveness or deferment of the loan amounts that the student has incurred while attending Western Connecticut State University. Upon ceasing enrollment please complete the exit interview process provided at the following website: www.studentloans.gov.
- Parents of dependent undergraduate students
- Minimal credit check is required
- Low interest rate
- Minimal credit check
- High balance loan program
- Repayment term: up to 10 years
- Borrowing Limits:
- Cost of attendance per student minus other aid.
If you would like additional information about the Federal Student Loan Programs, please visit Federal Student Aid.
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
Students may choose to borrow private funding from various lenders. Students may search and compare lenders and their benefits by visiting ELM Select. Western Connecticut State University highly recommends that students first apply for Federal Title IV loan programs before considering alternative loans. The reason for this recommendation is that the federal loans may possess more favorable terms and conditions that the private alternative loans.
WCSU Payment Plan
Western Connecticut State University offers has partnered with Nelnet Business Solutions to offer a low cost payment plan option.
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.
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.
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).
An institution is required to notify potential borrowers that if they receive Federal Student Loans or Grants that their information will be reported to the National Student Loan Data System (NSLDS). The National Student Loan Data System (NSLDS) is the U.S. Department of Education’s (ED’s) central database for student aid. 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. For more information please view www.nslds.ed.gov.