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Office of Financial Aid

Office of Financial Aid home page
Week of June 12, 2006

Graduate PLUS Loan Promissory Note is Available!

The following important information is for financial aid recipients. It is important to read the entire message to understand your financial aid options. If you do not receive financial aid, and do not have any interest in receiving financial aid, please disregard this message.

As you may be aware, earlier this year Congress approved a new federal loan for graduate students, the Graduate PLUS Loan. 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 Graduate PLUS Loan will be beneficial for students who need additional aid beyond the Federal Stafford and/or Perkins Loan. Previously, the only option available to these students was a private loan.

Students in need of additional aid will have to decide whether to apply for a Graduate PLUS Loan or a private loan for the 2006 -2007 academic year. Generally, our office recommends the Graduate PLUS Loan. The primary reason why this loan is more beneficial to students is the interest rate, which is fixed at 8.5%. While this may seem like a high rate when compared with the historically-low Stafford Loan interest rates of recent years, it is important to remember that interest rates are rising. The majority of Chicago-Kent students will not qualify for a private loan with a rate lower than 8.5%. Even for the few that do, the Graduate PLUS Loan may still be a better option, since private loans have variable rates, which are expected to continue increasing.

Ultimately, the decision to apply for a private loan or a Graduate PLUS Loan is yours, and it is one that you should consider carefully. At the following link you can view a chart that compares the terms of the Graduate PLUS Loan and private loans.

If you decide to apply for a Graduate PLUS Loan, the application process is very similar to that of the private loan. Please visit the following link (http://www.kentlaw.edu/depts/finaid/federalgraduatesloan.html) to view a list of our preferred lenders and the chart that compares the private loan to the Graduate PLUS loan.

Click on the lender of your choice to complete a Graduate PLUS Loan application. You will need to indicate the amount that you would like to borrow. Please remember that you must apply for the full academic year, since we will certify the loan so that the funds disburse equally between fall and spring. Also, please be aware that the amount of your PLUS Loan, combined with the rest of your financial aid package, cannot exceed the cost of attendance that is determined by our office. To help you determine the amount of Graduate PLUS loan funds you will need, please download the Estimated Cost Worksheet.

If you decide to apply for the private loan instead of the Graduate PLUS Loan, You must do the following:

Notify the Office of Financial Aid via email at finaid@kentlaw.edu or finaid@stuart.iit.edu.
Apply with your lender. Once your private loan is approved and completed with your lender, the Office of Financial Aid will be notified electronically to complete the school certification request.
If you choose to use a private loan instead of the Graduate Plus Loan and do not notify our office of your decision, we will not certify the private loan.

After your application is complete, your lender will contact our office for certification of your eligibility. Please keep in mind that we are currently updating our computer systems to administer this new loan. For this reason, we will not be able to certify the Graduate PLUS loan until after July 15th, 2006.

If you have any questions, please contact the Office

Office of Financial Aid Summer Hours

Monday- Thursday 8:30 A.M. - 6:00 P.M.
Friday 8:30 A.M. - 12:00 P.M.

Financial Aid Loan Processing for the Fall Semester

The Office of Financial Aid will be begin processing loans for the 2006-2007 academic year in late June. In order to ensure that your financial aid funds disburse by the first week of class, we are asking students to have their 2006- 2007 FAFSA and various loan promissory notes completed by the seconweek of July.

New Stafford Loan Rates

The new Federal Stafford Loan rate for funds disbusered after July 1 2006 is as follows:

6.80% during in-school, grace, deferment, forbearance, or repayment

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

If you decide to apply for the private loan instead of the Graduate PLUS Loan, You must do the following:

  1. Notify the Office of Financial Aid via email at finaid@kentlaw.edu or finaid@stuart.iit.edu.
  2. Apply with your lender. Once your private loan is approved and completed with your lender, the Office of Financial Aid will be notified electronically to complete the school certification request.

If you choose to use a private loan instead of the Graduate Plus Loan and do not notify our office of your decision, we will not certify the private loan.

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:

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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