2017-2018 Student Loan Information Guide



THE LOS ANGELES COMMUNITY COLLEGE DISTRICTStudent Loan Guide andLoan Data Form2018-2019Deadlines:Fall 2018 – November 30, 2018Spring 2019 – May 17, 2019LACCD and Pierce College Loan PhilosophyAs low-cost public institutions with limited entrance requirements, we are concerned about our students and believe that it is critical that we establish a clear rationale for student loan eligibility at our institutions. We wish to be certain that when students transfer they have sufficient loan eligibility to complete their education, and that students who do not intend to go beyond the community college level will not be overly burdened by debt. Los Angeles Pierce College is dedicated to supporting student success. Students often need to borrow funds to help with school related expenses and ultimately help students finish their educational goal which is a good investment. However, many students enter into debt without a clear picture of how their loan debt will affect them in the future. Remember, student loans must be repaid with interest. Before you borrow, consider your ability to repay your loans. Defaulting on a student loan will negatively affect your credit history. WHAT IS A DIRECT LOAN?Direct Loans are low interest loans to 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. There are no banks or lending institutions. There are two types of Direct Loans: Subsidized loans and unsubsidized loans.Subsidized loans are awarded on the basis of financial need. You won’t be charged any interest until you graduate or drop below six units because the federal government subsidizes the interest during the time you are enrolled. Unsubsidized loans charge interest from the time the money is first disbursed until it is paid in full. The interest is capitalized when you enter repayment, meaning that you pay interest on any interest that has already accrued. One way to minimize how much interest accrues is to pay the interest as it accumulates. If you still have several years until you receive your degree, this can become very expensive – NOT RECOMMENDED.For additional information about Direct Loans, go to the U.S. Department of Education’s Direct Loan website ()ATTENTION FIRST-TIME LOAN BORROWERSA first time borrower is someone who has no outstanding balance of principal or interest on a Direct Loan or FFELP Loan on July 1, 2013 or on the date the borrower obtains a Direct Loan after July 1, 2013. If you are a first-time borrower on or after July 1, 2013, there is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. This time limit does not apply to Direct Unsubsidized Loans or Direct PLUS Loans. If this time limit applies to you, you may not receive Direct Subsidized Loans for more than 150% of the published length of your program. This is called your “maximum eligibility period”. For additional information about this regulation, go to Examples:If you are pursuing a two-year program at a community college, you will be limited to three (3) years of Subsidized Direct Loan. If you are pursuing a one-year certificate program, you will be limited to 1 ? years of Subsidized Direct Loan.It is important that you know the length of the program of study you are pursuing as it will affect your maximum period of time you can receive Direct Subsidized Loans. If you go over the 150% of the published length of your program, you will be responsible for the interest that accrues on your Direct Subsidized Loan.ENTRANCE LOAN COUNSELING REQUIREMENTFederal laws require all borrowers to participate in Student Loan Entrance Counseling. The counseling explains the terms and conditions for the loan you plan to borrow. It also provides borrowers with information about the various Direct Loan repayment options. NEW: Los Angeles Pierce College is part of a loan counseling experiment with the U.S. Department of Education. Students who have previously completed entrance counseling and are selected for the experiment will be required to complete the Entrance Loan Counseling on an annual basis. As part of this experiment, student’s Direct Loan disbursements are conditional upon completion of additional entrance loan counseling. Students may use the U. S. Department of Education’s online Entrance Loan Counseling () and click on “Complete Entrance Counseling”. You will need your Federal Student Aid (FSA) User ID to complete the Entrance Loan Counseling. Make sure you print the confirmation after completing the session.EXIT LOAN COUNSELING REQUIREMENTLos Angeles Pierce College requires borrowers to complete Student Loan Exit Counseling annually or when the borrower drops below six (6) approved units during the semester or when the borrower graduates. The Direct Loan Servicing Center will send you information on your loan and when repayment begins. Borrower EligibilityThe following are general eligibility requirements for federal student loans:Complete a Free Application for Federal Student Aid ()Have received an Award Notification.Satisfy all the general student financial aid eligibility requirements.Be enrolled in a minimum of six (6) approved units. Students who are on an Extension Petition must be enrolled in six (6) approved units per the Educational ply with Entrance and Exit Loan Counseling requirements.Maintain Satisfactory Academic Progress standards.Borrowing the low-interest, Federal Direct Loan is a privilege. Even though it is a loan, the college has the right to refuse to certify a loan application for high-risk borrowers. Pierce College has a responsibility to evaluate all student loan requests on a case-by-case basis and Pierce College has the federal authority [HEA Sec, 479(A)(c), 34 CFR 685.301(a)(8)] to reduce or deny loan requests for students that in our professional judgment, are at serious risk of loan default. High levels of indebtedness, coupled with a small amount of progress in an academic program, are common indicators of high risk for default. After evaluation, your student loan request may be denied or reduced due to conditions below:A previous default on a federal student loan.Notification of previously discharged federal student loans due to disability or bankruptcy.Notification of delinquent federal student loan repayment status.Instances of inconsistent, fraudulent FAFSA, or admissions application information.Inability to repay -- Applicants with loan indebtedness in excess of a maximum for two-year public institutions.Consistently NOT meeting satisfactory academic progress standards.NOTIFICATIONThe college will transmit the loan information to the Direct Loan Servicing Center. You will then receive a loan disclosure notice from the U.S. Department of Education approximately two weeks after the loan has been originated. Watch for correspondence from your loan servicer. Take careful note of their contact information. It is critical that if your address or phone number changes, you notify your servicer. Maintaining correct information can help you protect your credit and keep your loan in good standing. You can also find your loan servicer at the National Student Loan Database website (). If you are a new borrower, you MUST E-Sign your Master Promissory Note (MPN). The college will receive electronic notification of your acceptance of your MPN. THE RIGHT TO REDUCE OR CANCEL THE STUDENT LOANIf it is determined that you are eligible, you will be notified via email (to your LACCD assigned email) to view your financial aid award on your student portal. You have the right to reduce or cancel the loan. Requests for reductions or cancellations must be submitted in writing to the Financial Aid Department within thirty (30) days of the date on the award notification.AWARDING OF LOANSThe loan period for an awarded Direct Loan corresponds to the period of enrollment (academic terms) that we anticipate you will be attending during the school year. As a result, when awarding the Direct Loan prior to or during the Fall semester, the loan is awarded for the academic year, Fall and Spring. Students who are enrolled in Spring only with no Fall enrollment, the loan is awarded for the Spring only. Students who complete a program of study in the Fall semester, the loan will be awarded for the Fall only and will be subject to proration. DROPPING BELOW HALF TIMEIf you drop below half-time (6 approved units) prior to the scheduled Fall semester disbursement, the disbursement will be cancelled and loan fund(s) will be returned promptly to the U.S. Department of Education. If you drop below half-time (6 approved units) after the scheduled fall disbursement and before the Fall semester is completed, you will not be eligible for a Spring semester loan disbursement. In both scenarios you may be eligible for a loan for the Spring semester only, and a new loan must be processed. If you drop below half-time (6 approved units) prior to the scheduled Spring semester disbursement the disbursement will be cancelled. We are concerned and you should be concerned about accruing debt when your progress is limited.SUMMER SEMESTERThe academic year for Federal Student Loans start with the Fall semester and ends with the following Summer semester. What does this mean to you: If you have borrowed the maximum annual loan limit during Fall and Spring semesters, you will have no remaining loan eligibility for the Summer semester within the LACCD. Please keep this in mind if you plan to continue to enroll in the LACCD as your future borrowing during the Fall and Spring semesters will impact your ability to borrow during Summer semester.FEDERAL LOAN BORROWING LIMITSA student’s financial need and annual loan limits determine how much a student may borrow. There are limits on the amount of subsidized and unsubsidized loans that you may be eligible to receive each academic year (annual loan limits) and the total amounts that you may borrow for undergraduate study (aggregate loan limits). The actual loan amount you are eligible to receive each academic year may be less than the annual loan limit. Students will either be classified as Grade Level One (0-30 units completed) or Grade Level Two (over 30 units completed and student is enrolled in a program of more than one year). For most students, we will look not only at completed units, but at how long it will take to complete your program. For additional information about Loan Borrowing Limits, go to Grade LevelAnnual Subsidized MaximumGrade Level 0Preparatory courses for undergrad program$2,625Grade Level 1$3,500Grade Level 2$4,500A student’s unmet costs, dependency status, and annual unsubsidized loan limits determine the maximum unsubsidized loan a student may borrow in an academic year.Dependency StatusAnnual Maximum UnsubsidizedDependent, without parent PLUS denial$2,000Dependent, with parent PLUS denial$6,000Independent$6,000The total undergraduate aggregate loan limits are as follows:Dependent Undergraduate Student without PLUS denialIndependent Undergrad Student/Dependent with PLUS denialMaximum combined subsidized and unsubsidized debt$31,000 – no more than $23,000 of this amount may be in subsidized loans$57,500 – no more than $23,000 of this amount may be in subsidized loansImportant reminder: If you have several years remaining until you achieve your Bachelor’s Degree, you should consider limiting borrowing so you retain loan eligibility. You should also know that Pell Grant eligibility is now capped at the equivalent of 12 full-time semesters.INTEREST RATES AND ORIGINATION FEESLoan TypeInterest RateSubsidized and Unsubsidized Loans5.05%PLUS7.6%First Disbursement DateOrigination FeeOn or after 10/1/2017—before 10/1/20181.066%On or after 10/1/2018—before 10/1/20191.062%On or after 10/1/2017—before 10/1/20184.264%On or after 10/1/2018—before 10/1/20194.248%STUDENT LOAN PROCESSComplete the Student Loan Data Form electronically. Then print your completed Loan Data Form and submit to the Financial Aid Office before the established deadline. The Financial Aid Office will only accept forms that have been completed and printed electronically.Bring a valid government issued photo-identification (i.e. driver’s license or U.S. passport)New Loan Borrowers must complete the following:Loan Entrance Counseling () and attach documentation of completion.Master Promissory Note (MPN) () and attached a copy of the signed MPN.Continuing BorrowersNEW: Los Angeles Pierce College is part of a loan counseling experiment with the Department of Education. Students who have previously completed entrance counseling and social security number (SSN) ends in an even number or zero are required to complete the Entrance Loan Counseling on an annual basis. So if your SSN ends with an even number or zero you must complete the Entrance Loan Counseling at the Federal Student Aid Student Loans website () and attach documentation of completion. As part of this experiment, your Direct Loan disbursements are conditional upon completion of additional entrance loan counseling. The reason we are participating in this experiment is that many college students don’t have a clear understanding of their loans and payment obligations. They often borrow without considering the necessary steps needed to ensure repayment success. Total student loan debt has increased by 20% since 2014. Growth in the number of loans is modest, but the average balances are increasing. REPAYMENT INFORMATIONWhile you are enrolled at least half-time time (six credit hours as an undergraduate, or four credit hours as a graduate student) your loans will be in an “in school deferment” status.? This means you are not required to make payments on your federal loans.? It is a good idea, if you are able, to make payments on your loans while you are enrolled.? This will help reduce your overall indebtedness when you leave school.Once your enrollment drops to less than half-time, your federal loans will enter a grace period status.? The grace period is a length of time during which you are not required to make payments on your loans. The length of the grace period depends on the type of loan that you have borrowed.? Federal Stafford Loans (Direct or Federal Family Educational Loan Program) have a six month grace period.? This is a great time to set up an account with your loan servicer as well as review and select a repayment plan that works for you.? Once your grace period ends your repayment begins.? If you re-enroll in school at least half-time before the end of your grace period, you will receive the full six-month grace period when you stop attending school or drop below half-time enrollment (other conditions apply).There are several repayment plans available for students. The chart below provides an example of the repayment plans where the student had borrowed $31,000. The borrower has the following loans:Loan TypePrincipal BalanceInterest RateSubsidized Stafford$23,0005.6%Unsubsidized Stafford$ 8,0006.8%Sample Repayment PlansRepayment PlanRepayment Period (In months)Monthly PaymentProjected Loan ForgivenessTotal Interest PaidTotal Principal & Interest RepaidStandard120$3430$10,131$41,131Graduated120$197-5870$12,834$43,834Extended Fixed300$1980$28,408$59,408Extended Graduated300$153-3000$33,660$64,660Income Based Repayment (IBR)191$154-3430$20,210$51,210Income Based Repayment – New Borrowers240$103-343$9163$31,786$53,623Pay As You Earn240$103-343$9163$31,786$53,623Income-Contingent Repayment198$223-2750$18,405$49,405You may use the Federal Student Aid Repayment Estimator to calculate your repayment options.? You may choose to either log in and your personal loan information will be calculated or you may proceed without logging in and you may “Add Loans” to estimated repayment.Repayment Estimator ()FEDERAL LOAN SERVICERSThe Loan Servicer is the organization responsible for billing, collecting and managing your loan repayment, and deferment/forbearance processing. You will send loan payments directly to your servicer.Your servicer will contact you to?provide important information about your repayment terms. It is your responsibility to notify your servicer directly any time your phone number, email address, or mailing address information changes.Your servicer will send you information about your loans by mail and/or email - Be sure to open and read it!If you do not know which agency services your loans, visit NSLDS to view your loan details and obtain your loan servicer contact information.? It is a wise choice to create an on-line account with your federal loan servicer.? This way you will be able to easily make a payment and review your loan balance.To get an updated list of loan servicers contracts with the U.S. Department of Education go to the Federal Student Aid website ().Student Loan Data FormBefore you complete this Student Loan Data document, you must read the Student Loan Information Guide. After you complete this form, print and submit to the Financial Aid Office before the established deadline. The Financial Aid Office will only accept documents that are complete. Check the Financial Aid Office website for deadlines to submit the Student Loan Data Form .Section A: Student InformationLast NameFirst NameStudent ID NumberCell Phone NumberAlternative Phone Section B: Student Loan HistoryYou MUST log in to the National Student Loan Data System (NSLDS) at nslds. to retrieve your current student loan debt. Even if this is your first time borrowing (no loan history), we encourage you to login to NSLDS. Logging in to the NSLDS will familiarize yourself with the NSLDS website in order to best manage any current and/or future student loan debt.Enter your current student loan balance - refer to the NSLDS website and enter the amount of your current total student loan debt. If you do not have a loan balance, enter zero.$Section C: Student Loan during the 2018-19 academic yearLos Angeles Pierce College will determine your academic program year for maximum loan eligibility. You are permitted no more than two (2) loans per academic year. All student loan disbursements are divided into two (2) payments per loan period. Federal regulations require that the first disbursement for students who have never borrowed before be no earlier than 30 days AFTER the start of the term.Only borrow what you need to pay for your educational expenses. You should consider your expenses and your income (including financial aid) to determine the loan amount you need to borrow.Enter the amount of federal student loan you need to borrow during the 2018-2019 academic year.An academic year consists of fall (winter is part of the fall semester), spring and summer semesters. You may not receive Direct Loans for a semester that you are not actively enrolled in at least six (6) approved units, and at least one (1) approved unit must be at Pierce College.$Annual Loan MaximumsDependent StudentIndependent StudentFirst Year Student (0-30 units completed)Up to $5,500Up to $9,500Second Year Student (30+ units completed)Up to $6,500Up to $10,500These annual maximums include unsubsidized portions. Annual subsidized maximums are $3,500 (1st Yr), $4,500 (2nd Yr)Section D: Student Loan Terms and ConditionsI understand that I am borrowing a loan which must be repaid with accrued interest. Initial: ______This loan is to be used for educationally related expenses. Initial: ______I must have a signed Master Promissory Note (MPN) to receive this loan and collection of all debts acquired under this MPN is fully enforceable in a court of law. Initial: ______I must immediately notify the holder of my loan if my status changes and that failure on my part to adhere to the terms and conditions of my loan may result in default and may affect my rights as a student loan borrower. Initial: ______My loan(s) will be originated for the loan period that I am eligible for and the loan(s) may be prorated if my educational goal at Los Angeles Pierce College will be completed in less than a full academic year. Initial: ______I must be enrolled in at least six (6) approved units for my loan request to be certified. This means that if I am on a Petition Extension due to satisfactory academic progress, only the courses listed on my Student Educational Plan and approved by the Financial Aid Office will be counted in the approved units. Initial: ______I understand that I must complete my program of study within the 150% of the program otherwise I will lose the interest subsidy on my subsidized student loan. Initial: _______My loan will be cancelled if my enrollment is less than six (6) approved units at the time of my first loan disbursement. Initial: ______I understand that I am permitted no more than two (2) loans per academic year. Initial: _____I understand that loan funds will be disbursed in two (2) payments per loan period. Initial: _____I understand that Direct Loans CANNOT be certified (originated) AFTER the end of a loan period (i.e. a term of enrollment / semester), unless I am actively enrolled in six (6) or more approved units for the current term / semester of the same academic year.? In order to ensure timely origination, I understand I must submit ALL requested documentation by the the established and published deadline dates for the current term of enrollment.? Documents submitted after the deadline dates may result in an inability to obtain a Direct Loan for that term.? Initial: _______ ?New borrowers only: As a new loan borrower, I understand that my first loan disbursement will be delayed thirty (30) days from the first day of semester. Initial: ______As a new loan borrower, I understand that I am subject to 150% rule of subsidized loan as explained in the Student Loan Information Guide. Initial: ______Documentation required along with the Loan Data FormYou need to confirm that you have the following items completed and attached to the Student Loan Data Form:?Bring a government-issued photo identification (i.e. driver’s license, US Passport)?NEW Borrowers only: ?Complete Entrance Loan Counseling – must attach documentation of completion of loan counseling?E-sign the Master Promissory Note (MPN) – must print a copy of your signed Promissory Note?CONTINUING Borrowers only: Beginning in the 2017-18 academic year, Los Angeles Pierce College is part of a loan counseling experiment with the Department of Education. Students who have previously completed entrance counseling and social security number (SSN) ends in an even number or zero are required to complete the Entrance Loan Counseling on an annual basis. So if your SSN ends with an even number or zero you must login to the Student Loan website at and complete the Entrance Loan Counseling and attach documentation of completion. As part of this experiment, your Direct Loan disbursements are conditional upon completion of additional entrance loan counseling.Borrower CertificationThe information provided on this document is true and correct to the best of my knowledge. I understand that I am borrowing a loan that MUST BE REPAID, including any fees, interest rate and/or collection costs. I understand all the terms and conditions of this student loan. I understand that Los Angeles Pierce College will notify me via email to my LACCD assigned email of all correspondences. I have read and understand the information on the Student Loan Information Guide and the eligibility requirements of this student loan. I understand the deadlines and that Los Angeles Pierce College will not certify my student loan due to incomplete documents and not meeting eligibility requirements._____________________________________________________________________________________Student’s SignatureStudent ID NumberDate ................
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