Mary Baldwin Financial Aid: Loans

Financing education is first a family effort, and we encourage students and parents to talk to each other about financial aid and especially the loans you are taking. Loans are an important part of most aid packages. Therefore, it is important that you understand all the aspects of each loan program. The U.S. Dept. of Education provides on on-line version of the Student Guide which describes all federal aid programs, including loans, in depth.

The Perkins Loan

Because of limited funding, the Perkins Loan is awarded based on the student’s need for a Pell Grant. The Perkins Loan is not subject to origination fees and bears interest at a fixed, 5% interest rate during repayment. Promissory notes are completed at the time of enrollment at the Business Office. Repayment does not occur until nine months after leaving school or graduation. For more in-depth information about repayment of this loan please contact the Business Office.
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The Direct Stafford Loan

The Direct Stafford Loan is awarded by the aid office per federal guidelines. To accept the federal direct subsidized and/or unsubsidized loans listed on the student’s financial aid award letter, the student must sign and return the award letter to the Financial Aid Office.  The subsidized loan interest is paid by the government for your period of at least half-time enrollment in school. The unsubsidized loan interest is the responsibility of the student from the time of the disbursement. Capitalization of interest can be chosen to defer payment until after graduation. The maximum Stafford interest rate is 8.25%. Repayment is the responsibility of the student.
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Direct PLUS Loan

The Direct PLUS Loan is a loan for parents of undergraduate, dependent students. Loan eligibility is based on college costs, less other aid, subject to a credit check by the lender. The award letter will only show the amount of the Direct PLUS Loan to direct costs of Mary Baldwin University. A parent can increase the loan amount up to the student’s cost of attendance less any other financial aid received. The extra funds can be used to cover loan fees, books or other educational expenses. Contact our office for assistance in determining the amount of loan you may need. Parents begin repayment 60 days after the second disbursement of the loan (usually in March of an academic year). The maximum PLUS interest rate is 9%.
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Disbursement of Direct Loans

All family federal education loans are disbursed in at least two payments (usually by semester) and are subject to as much as a 4.02% origination fee which is withheld by the lender and guarantee agency at the time of disbursement.

Once funds are received and enrollment status and continued eligibility verified, funds are applied directly to the student’s account. Funds are received no earlier than the week after add-drop period with the first refund checks issued approximately four weeks after the start of courses.

If a student’s eligibility has changed because of withdrawal or reduced enrollment, funds will be returned to the lender. Credit balances on a student’s account must be refunded within 14 days of the credit balance occurring. If any activity occurs on your student account, such as loan disbursements, you will receive updated billing within 30 days. You have the right to cancel any loan up to 14 days after the receipt of the first billing that reflects the disbursement of that loan.
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DIRECT LOAN FAQs

How will this affect my prior year federal Stafford and Grad PLUS Loans?

This change will NOT affect any prior year federal student loans.

Does this change impact me?

If you are a student who plans to borrow federal loans for fall 2010-2011, this change will impact you. Beginning in fall 2010, all Federal Stafford, Parent PLUS and Graduate PLUS loans will be processed through the Federal Direct Loan Program.

Why did Mary Baldwin choose to switch to the Direct Loan Program?

Before congress acted to reform student lending, Mary Baldwin University had already begun the process of switching to direct lending. The college did so to ensure that students would receive federal loan funds without delay and under better benefits.

On March 30, 2010, President Obama signed the Health Care and Education Reconciliation Act of 2010 (HCERA), which, among other things, makes significant changes to the federal student loans programs authorized by Title IV of the Higher Education Act of 1965. One of the provisions of the HCERA is the termination, as of July 1, 2010, of the authority for lenders to make new loans under the Federal Family Education Loan (FFEL) Program. Therefore, beginning July 1, 2010, all new Stafford, PLUS, and Consolidation loans can only be made under the William D. Ford Federal Direct Loan (Direct Loan) Program.

What happens to the Federal Stafford loans I have borrowed in previous years? Will payments still be deferred?

Your Stafford loans from previous years will remain in deferment as long as you maintain at least half-time status.

How will repayment work if I have FFEL and Direct Loans?

You will have the option of making separate payments to each agency/loan servicing company or you may also opt to consolidate all loans into one Federal Direct Consolidation Loan.

Are there additional requirements for me to receive funds with the Direct Loan Program?

The application process for Direct Loans is the same as FFEL Loans. US Citizens or permanent residents can apply for Direct Loans by completing the Free Application for Federal Student Aid (FAFSA).

We recommend that you complete these two things before you leave campus for the summer.

  1. If you are a student who plans to use federal loans for 2010-2011, you must sign a Direct Loan eMPN at:https://dlenote.ed.gov/empn/index.jsp
  2. Complete Direct Student Loan Entrance Counseling at:https://www.dl.ed.gov/borrower/EntrCounselingPage.do?cmd=doStart.

Once you have completed this process, your funds should arrive in a timely manner. The Department of Education will NOT send the funds until this process is complete.

Will I still be able to borrow private (alternative) loans through an outside lender?

Yes, as long as you and your co-signer (if needed) are credit approved you will still be able to borrow private loans through an outside lender.

Where can I get more information on Federal Direct Loans?

General information for students: http://www2.ed.gov/offices/OSFAP/DirectLoan/student.html

General information for parents:
http://www2.ed.gov/offices/OSFAP/DirectLoan/parent.html

Account Information:
www.dl.gov
Direct Loan Servicing Center: 
1-800-848-0983

If you have additional questions about the William D Ford Federal Direct Loan Program, please contact the Office of Financial Aid at 540-887-7022 or finaid@marybaldwin.edu

Alternative Loans

If you have used all of your federal loan eligibility, and your parents are not able or do not wish to take a parent loan, you may want to consider applying for an Alternative Loan.

If you have used all of your federal loan eligibility, and your parents are not able or do not wish to take a parent loan, you may want to consider applying for an Alternative Loan.

What is an alternative loan?
An alternative loan is a student loan that may be borrowed through an outside lending institution to assist with education-related expenses such as tuition, housing, travel, and books.

Will I qualify for an alternative loan?
Most students, unless they have a significant credit history and are working full-time, will require a cosigner. Alternative loans are based on credit, so loan applications are based on the credit of the student and the cosigner.

How do I choose a lender and apply?
Mary Baldwin University is pleased to offer a list of preferred lenders for review using the FastChoice lender selection and application tool. On this site, you will be able to compare the lenders on our list side by side, check out their benefits, interest rates, and terms, and when you choose a lender, you can apply right from the site. The web address is:
https://choice.fastproducts.org/FastChoice/Welcome.do?configId=1318882697419

How were the lenders on the list chosen?
The Mary Baldwin University Financial Aid Office sent out a “Request for Information” to all lenders who were present at the 2011 VASFAA (Virginia Association of Student Financial Aid Administrators) Conference. Each lender was asked a series of questions about interest rates, customer service policies, loan benefits, etc. The Financial Aid Office staff compared lenders to determine which lenders offered the greatest benefits for our students. Because none of the lenders that were reviewed seemed to offer fewer benefits for students, we were able to include all of the lenders present at the VASFAA conference.

May I use a lender that is not on the list?
Absolutely. Mary Baldwin is happy to use any loan from any lender, provided that they are willing to lend to a student at Mary Baldwin. Students may apply for a loan with any lender they choose.

The Financial Aid Office strongly recommends that students exhaust all federal aid options before applying for alternative loans. We also caution students to be aware that alternative loans are credit-based, often carry variable interest rates, and cannot be consolidated with federal loans.

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Entrance Counseling

Student Loan Entrance Counseling is completed by first-time student borrowers prior to enrollment and/or disbursement of loan proceeds. Students should complete entrance counseling at www.studentloans.gov. Federal regulations require an entrance counseling session to be sure students are aware of the scope and nature of loans.

Exit Counseling

An Exit Counseling Session is required when a student graduates, withdraws from classes or drops below half-time enrollment. The session stresses the importance of repayment of student loans and the impending date that repayment will begin. You can complete your exit counseling at www.mappingyourfuture.org.
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Mary Baldwin University Lender Code of Conduct

Staff members in the Office of Admissions and Financial Aid are prohibited from accepting gifts from any lender of student and parent loans or from any loan guarantee agency.  Gifts include but are not limited to travel, hotel or motel lodging, entertainment, restaurant meals, office supplies and event tickets.  Exceptions include such things as newsletters or reprints of articles and presentations designed to inform college officials about relevant issues.

In order to ensure the fair and consistent selection of lenders for student and parent loans, the following additional policies governing the College’s relationship with lenders will apply:

Mary Baldwin University staff members may not serve on lender advisory boards;

Mary Baldwin University and its employees will not engage in financial arrangements with lenders that result in a financial benefit to the College or its employees, including revenue sharing, referral fees or stock options;

Mary Baldwin University and its employees will not accept gifts, including computers or other equipment, from lenders at no cost or at a rate below market price;

Mary Baldwin University and it employees will not accept printing or publication services from lenders at no cost or at a rate below market price.  Brochures and mailings to borrowers as part of the lender’s normal customer service and marketing activities are exempt from this policy;

The use of Mary Baldwin University’s name, emblem or logo by lenders is prohibited;

Mary Baldwin University will not accept staffing assistance of “call center” services from lenders.  Calls to borrowers as part of the lender’s normal customer service activities are exempt from this policy.
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More Information

For more financial aid tips, loan application status, account balances, learning about deferment options, finding repayment options, and learning about loan consolidations please contact the Financial Aid Office.  Direct Loans will also have information about these topics.  You may also contact another lender of your choice about alternative loans.  The Financial Aid Office recommends that you and your family only consider alternative loans as a last resort.
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Questions? Contact Financial Aid.