Federal Loans

Tabor College has been selected to participate in the William D. Ford Federal Stafford Direct Loan Program. Under this program, students borrow money from the federal government to pay for their college costs. The U.S. Department of Education makes the loans, through the College, directly to the students. The College will use the student’s Direct Loan to pay college charges and will give the student any remaining money for living expenses. Additional information on Federal Direct Loans is available from the Department of Education or 800-848-0979.

There are three types of Direct Loans:

Federal Direct Subsidized Stafford Loans

These are based on financial need. The government will pay the interest on the loan while the student is in school.

Federal Direct Unsubsidized Stafford Loans

Students get Federal Direct Unsubsidized Stafford Loans regardless of need, but will have to pay all interest charges.

Federal Direct PLUS Loans (Parent Loans for Undergraduate Students) Parents of dependent students can borrow a Federal Direct PLUS Loan to help pay for their child’s education.

Tables and Directions

Download the Loan Interest Tables Download the Direct Stafford Directions

Application Procedures

All students must complete the Free Application for Federal Student Aid (FAFSA) by using FAFSA on the Web. Once the FAFSA has been completed and Tabor College has the results, the student loan application process consists of four basic steps:
  • Step 1. Locate or apply for your Federal PIN (sent to you by the U.S. Dept. of Education)
  • Step 2. Complete your online loan entrance counseling (required for first time borrowers)
  • Step 3. Complete and sign your electronic Master Promissory Note (if not already signed)
  • Step 4. Sign your Financial Aid award letter with the appropriate Stafford loan amount.

Step 1. Locate or apply for your Federal PIN

You should have received a Federal PIN from the U.S. Dept. of Education shortly after the first time that you completed a Free Application for Federal Student Aid (FAFSA). The PIN serves as your electronic signature and holds the same legal status as your written signature. You should keep your PIN in a safe place and not share it with anyone.

If you do not have a PIN, go to www.pin.ed.gov and choose either “Apply for a PIN” if you have never had one or “Request for a Duplicate PIN” if you had one but do not know it. You will need to submit your name, social security number, date of birth, and email or mailing address. A PIN will be generated and sent to you. You will have the option of receiving your PIN either through your email account (2-3 days) or your PIN can be mailed to you (7-10 days).

Step 2. Complete your Online Entrance Counseling

Every first time Federal Direct Loan borrower must complete student loan entrance counseling. Borrowing a student loan is a serious financial obligation, and the entrance counseling will provide you with the important information you need to know to be able to make an informed decision about student loan borrowing. The entrance counseling must be completed before the Financial Aid Office will accept and process your loan application.

Complete your online entrance counseling on the Federal Direct Loan Servicing website. This tutorial reviews basic facts about Federal Direct Loans, and your rights and responsibilities as a borrower. After you complete the tutorial, you will be required to take and pass a quiz. To pass the quiz, you must answer 12 out of 15 questions correctly. The tutorial and quiz will take approximately 20-30 minutes to complete. Once you have passed the quiz, the system will display your quiz results and ask you to choose a school. You should type in Tabor and find Tabor College in the drop down box. You may print your passing entrance counseling quiz results along with a copy of your rights and responsibilities by clicking “Retrieve Quiz Results” from the main page.

OR

Complete your online entrance counseling on the USA Funds website. This tutorial reviews basic facts about Federal Stafford Loans. After signing in with your login in and password, you will be required to take and pass the counseling session. To pass this counseling session, you must answer 12 out of 12 questions correctly. The session should take you approximately 20-30 minutes to complete. Once you have completed the counseling session, Tabor College will receive confirmation of your completed session.

Step 3. Complete and Sign your Electronic Master Promissory Note (MPN)

First time Direct Loan borrowers need to sign a Federal Direct Loan Master Promissory Note (MPN). If you have already signed a Federal Direct MPN previously for Tabor College or another Direct Loan college (online or paper), you do not have to complete a new MPN.

Students now are able to sign their MPN electronically on the web. Click on the: “Sign In” box. To complete an electronic MPN, students will need to use their U.S. Dept. of Education issued PIN. Students who do not have a computer or the appropriate software may use computers available on campus to complete the process.

Completing an electronic MPN is very simple and easy. You must complete the entire process in a single session so be prepared and give yourself plenty of time. If you exit the site before signing your electronic MPN, you will be required to start over from the beginning.

IMPORTANT: Before beginning your electronic MPN session:

  • Have your federal PIN ready. If you misplaced your PIN, see the instructions on how to obtain a new PIN.
  • Be ready to provide two references (name, address, and telephone number). These should be people who have known you for at least one year (preferably relatives) who live at different addresses.
  • Remember to always use your full legal name as it appears on your social security card.

Paper Option: If you do not wish to sign your MPN with your PIN, you may request that the Financial Aid Office print a copy of your MPN. The printed copy will be mailed to your home address for your signature, but this will delay the processing of your loan application.

Step 4. Sign your Financial Aid award letter

If you are a first time student at Tabor College, sign and return your Financial Aid award letter. If you are a returning student, please log-on and click the “My Info” tab located at the top of the page. Then select the “My Financial Info” link located in list on the right side of the screen. From here, please click the “Financial Aid Awards” link that appears on this page (it is located under the ‘Financial Aid Awards’ section on the left side of the screen). Your Financial Aid Award should be displayed (if not, change the drop-down ‘Award Year’ list to the appropriate academic year). Please review the award and make sure there are no discrepancies. If everything looks correct, please click “accept/decline” located at the top of your award and accept/decline the appropriate scholarships and loans.

Eligibility Criteria

To be eligible for a Federal Direct Loan a student must:
  1. be a U.S. citizen or permanent resident alien;
  2. be taking at least six credit hours and be matriculated in a degree or certificate program;
  3. not owe any refunds on a Pell Grant or other awards received and not be in default on repayment on any type of student loan.

Each new student loan recipient will be required to complete entrance counseling before a loan application is processed and attend an exit interview when graduating or terminating from school.

Exit Counseling

Federal regulations require that all student loan borrowers must have an exit interview/exit counseling during their final semester at the College. All borrowers should plan to attend exit counseling with the Financial Aid Office at this time. During the exit counseling, students are reminded of their rights and responsibilities as a student loan borrower. The Federal Direct Loan Exit Counseling Guide for Borrowers is the primary resource used. Topics include: when repayment starts, various repayment plans, deferments, loan consolidation, and consequences of default. All borrowers are requested to complete the Rights and Responsibilities Checklist and Borrower Information Form.

Students may access information about Exit Counseling. This provides access to the Exit Counseling Guide as well as the Borrower’s Information Form and the Borrower’s Rights and Responsibilities Form which must be completed in the exit interview process.

Students who have a pin number have the option of using the online Exit Counseling. This will satisfy all requirements for exit counseling and give the borrower up to date information on their student loan balances. This is the quickest and easiest way to satisfy the exit counseling requirement.

OR

Complete your exit counseling on the USA Funds website.

Maximum Loan Amounts

Dependent Student – A first year Dependent student (parent information is required on the FAFSA), with less than 24 earned or transfer credits, may borrow up to $5,500 per year with a maximum of $3,500 of that amount being in a subsidized loan. Second year dependent students, with at least 24 earned or transfer credits, may borrow up to a maximum of $6,500 per year with a maximum of $4,500 of that amount in a subsidized loan. Third and fourth year dependent students, with at least 56 earned or transfer credits, may borrow up to a maximum of $7,500 per year with a maximum of $5,500 of that amount in a subsidized loan. A dependent undergraduate student may only borrow up to an aggregate limit of $31,000.

Independent Student – Independent students (parent information is not required on the FAFSA) may have up to an additional $4,000 in unsubsidized loans per year. A first year independent student, with less than 24 earned or transfer credits, may be eligible to borrow up to $9,500 per year with a maximum of $3,500 of that amount being in a subsidized loan. Second year independent students, with at least 24 earned or transfer credits, may be eligible to borrow up to $10,500 per year with a maximum of $4,500 in a subsidized loan. Third and fourth year independent students, with at least 56 earned or transfer credits, may borrow up to a maximum of $12,500 per year with a maximum of $5,500 of that amount in a subsidized loan. An independent undergraduate student may only borrow up to an aggregate limit of $57,500.

Repayment Terms

The fixed interest rate for subsidized Federal Direct Loans is 4.5% (2010-2011) and unsubsidized Federal Direct Loans is 6.8%. In addition, all Federal Direct Loans charges an origination fee of 1.5%. With the current rebate allowances for on time payments of 1.0%, the actual origination fee charged is 0.5%.

For a Federal Direct PLUS loan, the fixed interest rate is 7.9%. In addition, the Federal Direct PLUS loan has an origination fee of 4%. With the current rebate allowances for on-time payment, the actual origination fee charged is 2.5%.

There are several ways to repay a Federal Direct Loan:

A standard repayment plan has a fixed monthly repayment amount for a fixed period of time, usually 10 years.

An extended repayment plan has a lower fixed monthly payment amount, and loan repayment can be extended beyond the usual 10 years.

A graduated repayment plan usually begins with lower monthly payments, and payment amounts increase at specified times. Payments may be the usual 10 year period, or they may be extended beyond the usual 10 years. Income-contingent repayment plan sets annual repayment amounts based on the borrower’s income after leaving school. The loan is repaid over an extended period of time, not to exceed 25 years.

A servicing agency will be responsible for maintaining the loan account and repayments. It is the student’s responsibility to maintain contact with that agency.

Loan Consolidation

Students who have previously borrowed FFELP student loans through a lending institution and who are now borrowing a Federal Direct Loan are encouraged to consolidate all of their student loans into one Federal Direct Consolidation Loan. This will help the borrower avoid the situation of owing two separate loans to two different lenders. Borrowers who are interested in consolidation of all their student loans into one Consolidation Loan can contact the U.S. Department of Education for more information.

Last Updated 04/07/2010

Contact Tabor Wichita call 1 (800) 546-8616 for more information