2012-2013 Federal Direct
Student Loan Workshop
Berkeley City College
2050 Center St
Berkeley, Ca 94704
Financial Aid Office Hours and
Contact Information
Office Hours:
Monday & Tuesday: 8:30 am - 4:30 pm
Wednesday: 8:30 am – 6:30
Thursday: 8:30 am – 4:30 pm
Friday: 8:30 am – 12:00 noon
Question on your loan, please contact:
Catherine Nichols at [email protected]
Understanding My Financial Options

Nearly two-thirds of
all college students
today receive
financial aid. The
most common types
of aid are grants,
scholarships, workstudy and loans.
Financial Aid Options




Grants are money awarded to students based on
financial need, that students do not have to payback
(e.g. Federal Pell Grants and Cal Grants).
Scholarships are also free money, usually based on
area of study or merit, such as good grades, high test
scores, athletic or musical ability, special talents,
heritage or community service.
Work-study programs, funded by the federal
government or colleges, lets students earn money in a
job on or off campus to help pay for their education.
Loans are money students borrow that must be repaid
with interest.
Federal Direct Stafford Loans

Federal Direct
Stafford Loans are
the largest source of
federal aid and are for
qualified
undergraduate,
graduate, career and
professional students
at all types of
colleges.
Federal Direct Stafford Loans
There are two types of Direct Stafford
loans:
 Subsidized, for which the government
pays the interest while students are in
school.
 Unsubsidized , for which students pay all
the interest on the loan.

Direct Stafford Loan Eligibility



Students must submit
a current FAFSA
application
Student must be
enrolled in school at
least half time
Student must make
satisfactory academic
progress
Subsidized and Unsubsidized
Direct Stafford loans

Direct Subsidized
Stafford loans are for
students with financial
need. When determining
eligibility, colleges
consider all financial
resources, including
federal Pell grants, Cal
Grants, work-study and
private scholarships.

Direct Unsubsidized
Stafford loans are for all
qualified students
regardless of their income
or assets.
Example: Independent Student
Budget = $18,388
Bogg
- $1008
Pell
- $5550
SEOG
- $400
CWSP
- $3000
Care
- $1000
Remaining Budget = $7206
Federal Direct Stafford Loan
Limits
Academic Year
Dependent
Student
Dependent
Student
Independent
Student
Subsidized
Independent
Student
Unsubsidized
Unsubsidized
Total for
Dependent
Student of
Sub & Uns
Total for
Independent
Student of
Sub & Uns
Subsidized
First Year( .5 to 30
units)
$3,500
$2,000
$5,500
$3,500
$6,000
$9,500
Second Year ( 30.5
to 60 units)
$4,500
$2,000
$6,500
$4,500
$6,000
$10,500
Dependent
Undergraduate
$23,000
$8,000
______
________
______
$31,000
Independent
Undergraduate
______
______
_____
$23,000
$34,500
$57,500
Total Loan Borrow
Limits
Loan Reality Check
Should I Borrow ?


Do I really need a
student loan to pay
for school?
Only borrow what you
need!
The True Cost of Student Loans

It costs money to borrow. Students should
be sure to know the true cost of their
loans. In addition to interest charges, there
may be an origination fee taken out of
each loan disbursement. Moreover,
borrowers who do not make their loan
payments on time may be hit with late fees
and collection cost.
Understanding Interest and
Repayment
For Direct Subsidized, if the first
disbursement of your loan is between July
1, 2012 and June 30, 2013, the interest
rate is fixed at 3.4 percent.
 For Direct Unsubsidized, the interest rate
is fixed at 6.8 percent.
 There is a Origination Fee on all Direct
Subsidized and Unsubsidized Loans.

Understanding Interest and
Repayment
■
■
The Origination Fee is a percentage of the
amount of each loan you receive. For
loans first disbursed between July 1, 2011
and June 30, 2013 the fee is 1.0%. It will
deducted from each loan disbursement.
When you receive your first Direct Loan,
you will be contacted by the servicer for
that loan (you repay your loan to the loan
servicer). If you’re not sure who your loan
servicer is, you can find information on
www.nslds.ed.gov or call 1-800-433-3243
Understanding Interest and
Repayment

After you graduate, leave school, or drop
below half-time enrollment, you will have a
six-month grace period before you begin
repayment. During this period, you'll
receive repayment information from your
loan servicer, and you'll be notified of your
first payment due date. Payments are
usually due monthly.
Calculating Repayment:
Please visit
http://studentaid.ed.gov under
Repayment Plans & Calculators
section.
Borrowing Tips!
Borrow conservatively-only borrow
what you need…
 Budget wisely
 Plan ahead to repay your student loans
 Be aware of the monthly payments for
the amount you borrow

How much Do I Really Need to
Borrow?
My monthly income x 12
____
My monthly expenses x 12
____
My Financial Award
____
Total
____
Cost of Attendance $18,388(Independent)
Cost of Attendance $11,872(Dependent)
Total-Cost of Attendance=
____
Delinquency


If you fail to make the required payments on your loan(s)
on time, your loan is delinquent. If you don’t make
payments for 270 days, your loan is then considered to
be in Default.
There are serious consequences of default (refer to the
Default section for more information).
Deferment
You can receive a deferment for certain defined
periods.
 A deferment is a temporary suspension of loan
payments for specific situations such as
reenrollment in school, unemployment, or
economic hardship.etc.
 You don’t have to pay interest on the loan
during deferment if you have a subsidized
Direct.
 If you have an unsubsidized Direct, you’re
responsible for the interest during deferment.
Deferment



If you don’t pay interest as it accrues
(accumulates), it will capitalize (added to the
loan principal), and the amount you have to pay
in the future will be higher
You have to apply for a deferment to your loan
servicer (the organization that handles your
loan), and you must continue to make payments
until you’ve been notified your deferment has
been granted. Otherwise, you may become
delinquent or go into default.
For the list of deferments reason visit:
http://studentaid.ed.gov
Forbearance



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If you do not qualify for a deferment, consider
requesting a forbearance from your loan holder.
Forbearance is a temporary postponement or
reduction of payments for a period of time
because you are experiencing financial difficulty
Unlike deferment, whether your loans are
subsidized or unsubsidized, interest accrues,
and the borrower (you) is responsible for
repaying it.
Your loan holder can grant forbearance in
intervals of up to 12 months at a time for up to 3
years. You have to apply to your loan servicer
for forbearance, and you must continue to make
payments until you've been notified your
forbearance has been granted.
Default

In Default means you, the borrower, failed to
make payments on your student loan according
to the terms of your promissory note, which is
the binding legal document you signed at the
time you took out your loan. In other words, you
failed to make your loan payments as
scheduled. Your school, the financial institution
that made or owns your loan, your loan
guarantor, and the federal government all can
take action to recover the money you owe. Here
are some consequences of default.
What Are the Consequences If I
Default?

National credit bureaus can be notified of your default,
which will harm your credit rating, making it hard to buy a
car or a house.

You will be ineligible for additional federal student aid if
you decide to return to school.

Loan payments can be deducted from your paycheck.

State and federal income tax refunds can be withheld
and applied toward the amount you owe.

You will have to pay late fees and collection costs on top
of what you already owe and can be sued.
What Are the Consequences If I
Default?

Right to deferment is lost.

Eligibility for further financial aid is stopped until the loan(s) is
paid in full or is in repayment with EDFUND and the borrower
has met all requirements for additional financial aid.

The borrower's school may withhold academic transcripts.

State and federal tax refunds may be "offset" (withheld) to
repay the defaulted student loan(s).

Wages may be garnished.
Berkeley City College Student
Loan Serving Policies and
Procedures

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
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Student Loan applications need to be turned in at our front
counter, April 19th 2013 is the last day to apply for a student loan
for the spring 2013 semester. There will be no exceptions
Continuing borrowers are required to attend the workshops to
insure they are up-to-date with our most recent changes.
Participation in the Student Loan Workshop does not
guarantee student loan approval. Each student’s application
will be reviewed thoroughly before any decision is made.
Continuing borrowers are not automatically approved for
student loans.
Financial Need, Satisfactory Academic Progress, Pell Grant and
Loan History will be thoroughly assessed, when determining
eligibility
Berkeley City College Student
Loan Serving Policies and
Procedures

A Student who’s EFC exceeds 5550 but does not exceed
Cost of Attendance (COA), will be given first priority during
the review process. In order to avoid overpayments,
students who receive financial aid will be evaluated for loan
eligibility, after all awards (Pell, SEOG, BOGG, Cal Grant,
Work Study, EOPS, CARE, and Scholarships) are entered to
Financial Aid System.

Subsidized loans are need based loans, Students will be
awarded Subsidized Loans based on need only. For
example, an independent student whose EFC exceeds the
COA, will only qualify for an unsubsidized loan.
Berkeley City College Student
Loan Serving Policies and
Procedures



Student Loan Servicing will take anywhere from 4-6 weeks. All
students must be thoroughly verified before certification of
student loans. Please refer to Appendix A for Student Loan
Servicing Procedure flow chart.
Continuing students who have dropped to less-then-half time
enrollment will be reported to NSLDS within 30 days of status
change. Repayment status on their student loan is initiated.
Continuing students who were granted a student loan and fail
to meet enrollment requirements during their prior loan period
are not eligible for recertification.