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United States Federal Loans - How to apply

Contents:

How to Apply

Step 1

Complete the Free Application for Federal Student Aid (FAFSA).

To complete the FAFSA, you will need:

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Step 2

Email the Federal Aid Administrator at BU to let us know you have applied. We will reply with details of expected costs and an estimate of your entitlement. Please attach a copy of your unconditional offer letter.

Step 3

Log on to StudentLoans.gov and complete a Direct Loan MPN and also complete Entrance Counselling.

Step 4

Email the Federal Aid Administrator to confirm that you have completed the above, advise them of how much you want to borrow and whether you will be receiving any other funding e.g. scholarships or bursary awards.

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Eligibility

BU and the US Department of Education Direct Loan Program require that the student / borrower be a US citizen or a permanent resident in the United States. Direct Loan Program regulations require that the student / borrower be accepted onto a full-time degree. The student borrower must be continually enrolled on the specified degree program for the duration of the academic year.

In order to remain eligible, student / borrowers are required to be making 'Satisfactory Academic Progress'. This progress is determined by the Federal Aid Administrator based upon the information contained on the student's academic transcript as of the date of evaluation.

A change in status (failure to enrol, withdrawal, exclusion, or failure to progress academically) will result in a failure to meet the above definitions of Academic Progress and Enrolment Status (see below).

If a student does not meet eligibility requirements for Direct Loan funds your loan service organisation will be notified.

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Satisfactory Academic Progress & Enrolment Status Evaluation

A student must be enrolled on a full-time degree awarding programme and taking the required credit load for full-time undergraduate or postgraduate degree courses (programmes).

In order to remain eligible, the student borrower must successfully complete each course with a passing grade for any assignments / examinations as defined and required for each course, and which equate to the number of credits earned. Failure, withdrawal, incomplete or other designations indicating a negative status for attempted courses are not considered successful completion. Courses that are repeated will be counted in the calculation of credits attempted and will be counted as credits earned when the student receives a passing grade. Students enrolled in undergraduate or postgraduate degree programmes must achieve the minimum required passing grade in each course taken at BU.

You must make satisfactory academic progress in order to maintain federal aid eligibility and to receive your subsequent disbursements.

Enrolment status will be continuously reviewed throughout the academic year.

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Evaluation Periods

Student loan eligibility will be reviewed during and at the end of each academic year.

Counselling

Students who borrow under the Direct Loan Program are required to complete counselling before receiving loan proceeds from their first loan and again shortly before graduating or otherwise leaving school. This can be done at StudentLoans.gov.

If you have recently applied for your first loan, you will need 'Entrance Counselling'.

If you are about to graduate or otherwise leave school, you will need 'Exit Counselling'.

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The Use of Direct Loan Funds

The use of Direct Loan funds are specifically to cover the cost of education. The primary cost of education is tuition, followed by associated expenses. Each loan has a grace period of 6 months. This means that 6 months from the date of your graduate or that you cease to attend, you will be required to begin repayments. You must check with your loan servicer for full details on the repayment of your loan.

Types of Stafford Loans

There are 2 different types of Stafford loans: Subsidised and Unsubsidised. The Student Aid Report will determine which type you are eligible for.

Subsidised loans are available to students who demonstrate a financial need. Subsidised means that you are not responsible for interest that accrues on the loan while you are enrolled at least half-time at university.

Unsubsidised loans are available to students who do not qualify for other financial aid or to students who qualify for partial financial aid but require additional funds. With an unsubsidised loan you are responsible for all the interest that accrues on the loan while you are enrolled at university. The interest on this loan can be paid monthly while you are at university or deferred until after you graduate or stop attending at least half-time.

Borrowing limits for Stafford Loans (combined Subsidised and Unsubsidised)

  Undergraduate Dependent Students Undergraduate Independent Students
1st year $5,500 per year maximum $9,500 per year maximum of which $3,500 per year is subsidised
2nd year $6,500 per year maximum $10,500 per year maximum of which $4,500 per year is subsidised
3rd year $7,500 per year maximum $12,500 per year maximum of which $5,500 per year is subsidised
Aggregate maximum: $31,000 $57,000

Graduate Students  
Annual Maximum $20,500 per year
Subsidised Maximum $8,500
Unsubsidised $12,000
Aggregate maximum: $138,500 including undergraduate loans

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Repaying your Loan

Please note that BU accepts no responsibility whatsoever for the repayment of your loan.

It is your responsibility to repay your loan.

There is a 6-month grace period on Direct Stafford Loans from the date you graduate or leave university, or drop below half-time status. Repayment begins at the end of the grace period. Please check with your loan servicer for full details on repayment.

Further details on repayment and the payment of interest on your loan can be found on our Federal Loan Frequently Asked Questions page.

Remember that if you default on your loan (270 days or more delinquent), a report is made to all the national credit bureaus which could result in you not being able to obtain a credit card, a mortgage or a car loan. Your name will also be given to the Internal Revenue Service (IRS) who may take your federal income tax refund, and your lender may possibly institute other action.

Further information on the consequences of defaulting on your loan can be found on our Federal Loan Frequently Asked Questions page.

If in doubt please contact your lender.

It is also your responsibility to:

Further information on your rights and responsibilities with regards to your loan can be found on our Federal Loan Frequently Asked Questions page.

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Withdrawal and the Return of Federal Loans Funds

If you withdraw or fail to attend your programme, you are required to inform the Federal Aid Administrator at BU, and your Loan Servicer no later than five working days after withdrawal. Students who withdraw from their programme of study are required to inform the University in writing. You might need to complete a Withdrawal Form (contact your School for this). Failure to attend after enrolment is deemed to be a withdrawal. Any "unearned" loan funds disbursed to you directly must be returned.

If you withdraw from your year of study, before and up to a point in time when 60% of your programme of study have been completed, the University is required in accordance with federal regulations, to return all loan funds disbursed on your behalf, to the US Dept of Education. Students who withdraw from the course of study are not eligible for the refund of tuition, or indeed any fees or costs that have been drawn from Direct Loan funds.

The University is at liberty to request the immediate re-payment of any proportionate amount up to the certified aggregate annual loan amount, if the US Government requires the University to return all of the Direct Loan funds certified in your name. This means that the entire loan amount certified for any one academic year, and any proportion of it which may have been returned to you as a credit balance by the University, must be returned to the University if the US Government indicates that your loan funds are "unearned".

If you complete more than 60% of your course, you are not entitled to a refund as the University has maintained your study place, and allocated resources thereof for your academic progress. If you withdraw from your course of study at any point during the current academic year, your Loan Servicer will be notified and you will be required to complete an Exit-Counselling session at StudentLoans.gov.

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