Beginning July 1, 2012, graduate students are no longer eligible for subsidized loans due to a change in federal regulations.
Unless you have previously borrowed a Direct Loan while at the University of Montevallo and completed the Entrance Counseling and signed the Master Promissory Note (MPN) with the U.S. Department of Education within the past 10 years, you must follow the processes below.
- Federal Direct Stafford Loans (FAFSA required)
Federal Direct Stafford Loans typically pay to the student’s account early in the semester after all financial requirements have been completed.
However, exceptions may apply as noted below. Students applying for the loan for one semester only (ex: fall only) will receive funds in two disbursements. The initial disbursement will credit early in the semester if the process was completed on a timely basis. The second disbursement will credit at the midpoint of the semester. The Cashier’s Office is aware of the regulation and will work with students in this situation. Students receiving the first disbursement as a first-time, first-year borrower (freshmen in the first semester) will receive a disbursement of funds thirty days after classes begin. This federal regulation applies only to the initial semester. The Cashier’s Office is aware of the regulation and will work with students in this situation. Students awarded this loan will be borrowing through the federal government and must complete the processes listed below. Repayment of the loan(s) start(s) six months after ceasing to be enrolled at least half time which is six (6) credit hours for undergraduates and five (5) credit hours for graduate students. Keep in mind that if you are unable to repay the loan(s) when payment is due, you need to contact the Department of Education or your loan servicer(s) to ask about alternative repayment or deferment options. There are numerous options to avoid defaulting on the loan(s). Do not allow the loan(s) to default, because it will affect your credit!
Undergraduate students may be eligible for the need-based subsidized Direct Loan or the non-need-based unsubsidized Direct Loan. “Subsidized” means the government is paying the interest while the student is enrolled at least half time. “Unsubsidized” means that the student has the option of paying the interest or allowing it to accrue with the principal. Eligibility is based on the FAFSA information, cost of attendance and class level.
- Federal Direct Parent Plus Loan (FAFSA Required)
Federal Direct Parent Plus Loan (FAFSA Required)
Parents of dependent students may borrow up to the cost of attendance minus any financial aid that the student receives. Parents begin repayment within 60 days of the final disbursement unless the lender grants deferment. This loan is not automatically awarded. To apply for the loan, a parent may go online to complete the application at www.studentloans.gov. Applications for the upcoming fall/spring semesters will be available June 1. The loan will not be processed through the federal government until mid-July. The application must be completed for certification. If the loan is not approved but denied, the dependent student may contact the Student Aid Office to request additional funds through the Unsubsidized Direct Loan Program.
- Federal Direct Grad Plus Loan (FAFSA Required)
Federal Direct Grad Plus Loan (FAFSA Required)
Graduate students may borrow up to the cost of attendance minus any other financial aid awarded. Typically graduate students at the University of Montevallo are not eligible for this loan for the fall/spring semesters because the Stafford loan covers the cost of attendance. Contact the Student Aid Office to advise the office that you want to apply for this loan. To apply for the loan, a graduate student may go online to complete the application at www.studentloans.gov. Applications for the upcoming fall/spring semesters will be available June 1. The loan will not be processed through the federal government until mid-July. The application must be completed for certification. The loan will be certified electronically if the student borrower is approved.
- Alternative Loans
Students may borrow non-federal loans to help with college expenses. These non-federal loans are called alternative or private loans, and they may be combined with other aid as long as the total aid does not exceed the student’s cost of attendance as determined by the University. Numerous lending institutions offer alternative loans, and students are encouraged to research the student loan market for options. Make certain to tell the lender that the University of Montevallo processes alternative loans electronically through ElmResources. The University of Montevallo cannot recommend a lender. This is the student’s choice. This guide is designed to help you through the alternative loan process.
-The FAFSA is not required for this loan, but students are encouraged to file the FAFSA to apply for low-interest federal student loans first. There is also the possibility of receiving grants such as the Pell Grant ranging from hundreds to thousands of dollars or other federal grants ranging from $1200 to $4000.
-Investigate alternative loan programs by checking with various lenders. Evaluate the program on the following features: interest rates, fees, loan minimum/maximum (annual and aggregate), academic progress requirements, co-signer, enrollment status, citizenship requirements, repayment terms, benefits and options.
-Select an alternative loan program and apply directly with the lender. Advise the lender to process electronically with the University of Montevallo through ELMResources.
Federal regulations require the student to request a Self-Certification Form from the Student Aid Office before the lender can process the loan. Therefore, it is recommended that students visit the Student Aid Office immediately upon completion of an alternative loan application to have the Self-Certification Form completed. The student has the responsibility of mailing the form to the lender of choice.