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Office of Financial Aid

Office of Financial Aid home page
Week of May 29, 2006

Graduate Plus Loan

Congress has recently passed legislation allowing graduate students to borrow from the Federal PLUS loan program beginning July 1, 2006. Unlike undergraduate PLUS loans, where the borrower is the student’s parent, Graduate PLUS loans allow only the student to be the borrower. Students must meet federal credit criteria to qualify. The interest rate for 2006-07 will be fixed at 8.5%. The standard repayment period is 10 years. Borrowers may be able to extend the repayment period to as long as 30 years through federal student loan consolidation. As more details become available, the Illinois Institute of Technology Downtown Campus Office of Financial Aid web site will be updated and students will be instructed on how to apply for a Graduate PLUS loan.

In addition to the federal PLUS loan for graduate students, there are several types of private, credit-based student loan programs designed specifically for law students. These private loan programs are similar to consumer loans and require the borrower (and in some cases, the co-signer) to be credit-worthy. Most lenders have telephone and web application processes to inform the potential borrower if they qualify for the private loan based on their credit-worthiness. Interest rates for private loans are variable. Recipients may defer payment up to 9 months after graduation. The maximum repayment period varies from lender to lender, and may be as long as 25 years.

Through the graduate student PLUS loan or private loans, students may borrow up to the cost of attendance, less other aid, each academic year. Interest on these loans begins to accrue upon disbursement.

When applying for federal loans or private educational loans, please anticipate what you will need to satisfy your educational expenses for the entire nine month academic year. Students are encouraged to apply for only one supplemental loan (PLUS or private) per academic year. Applying for too many new loans in a short period of time can damage your credit (more than three inquiries in 12 months could lower your credit score).

A complete list of preferred lenders who participate in the Graduate PLUS loan and private educational loan programs will be available soon.

The Pros and Cons of Federal Student Loan
Consolidation for In-School Students

Pros

  • Low fixed interest rate
    Unlike Federal Stafford Loans, which have a variable interest rate, the rate on a Federal Consolidation Loan is fixed. The fixed interest rate is calculated using the weighted average of the loans that are being consolidated, rounded up to the nearest 1/8%. Until June 30, 2006, the Federal Stafford Loan rate for students who are in-school is 4.7%. Therefore, the interest rate on your Federal Consolidation Loan may be as low as 4.75%.
  • Retain deferment benefits
    In order to consolidate your loans while you are in-school, the loans will be placed in repayment status. However, you are still eligible for in-school deferment. Therefore, when the consolidation process is complete, your Federal Consolidation Loan will be placed in deferment status.
  • Lower monthly payments
    With a Federal Consolidation Loan, the loan repayment period may be extended from the standard 10 years to a maximum of 30 years, depending on the total loan amount. This will result in a lower monthly payment amount.
  • No prepayment penalties.
    There is no penalty to pre-pay your loan at anytime.
    No fees
    No credit check

Cons

  • Loss of grace period
    In order to consolidate your Federal Stafford Loans while you are in-school, your loan must be placed in repayment status. When your loan is placed in repayment status your 6-month grace period will be waived. While you are in-school your loans may be deferred, but once you graduate or cease to be enrolled at least half-time your loans will go into repayment immediately. Please keep in mind that although you loose your grace period you still have the option to postpone repayment through other deferments (i.e. economic hardship, unemployment) or forbearance. Ask you consolidation lender for details.
  • Not all lenders offer in-school consolidation
    Check with your lender to determine if they offer federal loan consolidation for in-school students.
  • Higher overall interest cost
    By extending your repayment period you may incur higher overall interest costs.

Useful Links:
• IDAPP
http://www.idapp.com/borrowers/loanconsolidation.htm

• Access Group
http://www.federalconsolidation.org/inschoolborrowers/index.htm

• Sallie Mae
http://www.salliemae.com/school/faqs/consolidation_faq.html

*The IIT-Downtown Campus Office of Financial Aid created this document to provide students with general information about federal loan consolidation, based on our research. Please confirm the loan terms with your lender when you apply. The Office of Financial Aid does not recommend one lender in particular.

2006-2007 FAFSA

In order to qualify for federal financial aid for 2006-2007, you must complete a Free Application for Federal Student Aid (FAFSA) or Renewal FAFSA for 2006-2007. In order to complete the 2006-2007 FAFSA you will need to provide 2005 income and tax information, so we recommend that you complete your 2005 tax returns before filing your FAFSA. However, we also recommend that you complete your FAFSA as soon as possible to receive full consideration for financial aid.

You can complete your FAFSA or Renewal FAFSA online at www.fafsa.ed.gov

Applying for Private Loans

Whether you are applying for a private loan for the first time this academic year or you are looking to borrow additional funds, please keep the following in mind:

Borrowing for the first time this year:

Apply online with any of our preferred lenders here.

Remember to apply for the amount that you want to receive for the full academic year (fall/spring for Kent students and fall/winter/spring for Stuart students). Our office will automatically certify your loan for the full academic year and split the total loan between all terms.

Borrowing additional funds:

Students who have already borrowed a private loan with Access Group for the 05-06 school year may complete a loan amendment form to increase their loan amount. Please stop by our office in Room 230 to complete this form.

Students who have already borrowed from any other private lender must apply for an addtional loan. To do so online, please visit our preferred lender list here. Please keep in mind that all loans will be certified for the full academic year, so plan accordingly when requesting your loan amount.

Please be aware that our office will only certify additional loan funds for you if you are eligible to receive additional financial aid. Your total financial aid award for the 05-06 school year cannot exceed your cost of attendance, as calculated by our office.

New Stafford Loan Rates

The new Federal Stafford Loan rates for the period from July 1, 2005 to June 30, 2006 have been set. The rates are as follows:

4.70% during in-school, grace, or deferment
5.30% during repayment

Free Credit Report

Did you know that you are now able to receive a free credit report once every 12 months? We encourage students to review their credit reports annually to check for inaccuracies and identify any suspicious activity.

To receive your free credit report, please visit the following link: www.annualcreditreport.com. This central site allows you to request a free credit file disclosure, commonly called a credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion.

Please be aware that other sites may advertise free credit reports, but this is the only site that is sponsored by the federal government and the three nationwide credit reporting agencies. Other sites may charge fees.

REFUND CHECKS

Refund checks are generated by the Bursar's Office and are available to be picked up at their office (Room 290) approximately 5-7 business days after a credit has resulted in a student's account.

The Bursar's Office will send the student an email when a refund check is available.

Office Hours - Suite #230

Monday-Thursday ~ 8:30 a.m. to 6:00 p.m.

Friday ~ 8:30 a.m. to 4:30 p.m

Phone: (312) 906-5180 - Fax: (312) 906-5274

 

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