USA

United States Federal Loans - Frequently Asked Questions

Contents:

Do I need money to support myself until my Direct Loan money becomes available?

Yes! It could take up to four weeks after term starts for the money to be available to you. It is very important to ensure that you have enough funds available to you to support yourself in the meantime.

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When can I expect the money?

Your loan will be disbursed in three instalments, at the start of each term. The disbursement date is the date the US Dept of Education issues the funds. Generally the first disbursement date is mid October. Your tuition/accommodation fees will be deducted automatically and any remainder made out to you by £ cheque, which should be available for you to collect within 14 working days after the disbursement date. If you are a first-year, first-time borrower this may take longer.

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Where will my money go?

The money will be sent directly to us and we will contact you to let you know when you can collect any surplus funds by cheque.

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How can I access my funds once it has been disbursed?

The funds will be paid directly into BU's bank account. We will arrange to have tuition fees and/or accommodation fees deducted. If there is any balance left, this will be returned to you by cheque in UK £ for you to pay into your UK bank account and this should be available 17 working days after the disbursement date.

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What is the cost of living in Bournemouth?

The cost of living varies from person to person and year to year. On average you need approx £8,000 for living expenses. Below is an indication of what living expenses might be for 08/09:

Accommodation £85 - £100 per week (depending on where you stay and the type of accommodation)
Bills £35 - per month
Food £120 - per month
Travel £45 - per month (travel around town and to the University)
Stationery £40 - per year
Books £170 - per year
Second hand bicycle £70

You can find out the approximate equivalents in dollars at www.oanda.com.

If you have any specific questions about living expenses or any other student support matters, please email askBU.

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Does the University deduct my tuition and accommodation fees from my loan funds?

Yes, this will be done automatically when the funds are received.

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How can I pay my tuition fees on enrolment when I get my loan funds over 3 disbursements?

You can pay your tuition fees in instalments, but you must contact your Programme Administrator to let him/her know that you will be receiving Direct Loan funds.

We strongly suggest that you set up a Payment Plan for your tuition fees. You can speak to your Programme Administrator or your School's Finance & Resources Manager about setting up a Payment Plan.

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How do I pay for my accommodation when I get my loan funds over 3 disbursements?

Payment for rent is usually collected 3 times a year (once every term) i.e. in October, January and April of each year. Because you receive your Direct Loan funds in instalments you can pay your accommodation in instalments as well. You must contact the Accommodation Office to let them know that you receive Direct Loan funds and that you will pay your accommodation in instalments. They can also help if you wish to make alternative arrangements for paying your rent.

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Where can I get information about “entrance clearing visas” and immigration matters?

If you have any questions regarding visas and immigration matters, please contact askBU.

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Where can I get information on how to open a bank account in the UK?

You will only be able to open a bank account in the UK once you have enrolled. For information on opening bank accounts, please contact askBU.

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Do I need to check whether my loan has been approved?

An email will be sent to you once your loan has been originated and a certificate will be posted to you for use with your Visa application. It is important to stay in contact with the Federal Aid Administrator from time to time to check the status of your loan application.

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What do I do if I have applied for a loan, but cannot enrol on my programme?

If you have applied for a loan and find that you are unable to continue with your study plans, contact the Federal Aid Administrator immediately.

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How is my financial aid calculated?

If eligible, you will either receive a subsidized and/or an unsubsidized Stafford loan. Loan amounts are calculated on the following basis:

Subsidized Loans
Cost of Attendance (e.g. tuition fees, accommodation fees, books, transport costs etc.)[COA] – Expected Family Contribution [EFC] – Other Financial Aid (if applicable) [OFA] = Subsidized loan amount.

For example, if the COA is $29,500.00 and the EFC is 10,000 and you are not receiving any other financial aid, the calculation will be 29,500 – 10,000 – 0 = 19,500. You will not be eligible for a $19,500.00 Stafford loan because the subsidized (and unsubsidized) loan amounts are subject to certain maximum amounts based on your grade level. Please see Borrowing limits for Stafford Loans (combined Subsidised and Unsubsidised).

Unsubsidized Loans
Cost of Attendance [COA] – Other Financial Aid (e.g. subsidized Stafford loans) [OFA] = unsubsidized loan amount.

For example, if the COA is $29,500.00 and you were eligible for a subsidized Stafford loan of $8,500.00 (i.e. OFA), the unsubsidized loan amount will be $21,00.00. You will not be eligible for a $21,000.00 Stafford loan because the unsubsidized loan amounts are subject to certain maximum amounts based on your grade level. Please see Borrowing limits for Direct Loans (combined Subsidised and Unsubsidised).

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What should I use the money for?

US Department of Education regulations state that you can only use the money for educational purposes.

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Who will be paying the interest on my loan?

If you receive a subsidized Stafford Loan, the federal government will pay the interest that accrues on your loan at these times:

While you are in school (on at least a half-time basis)
During the six-month, post-school grace period
During periods of deferment.

If you receive an unsubsidized Stafford Loan, you are responsible for paying all of the interest that accrues. If you are offered an unsubsidized loan, you will be given the choice of paying the interest on that loan while in school, or you can have it added to the principal of the loan. This is called "capitalized interest".

You can find out more about interest rates at StudentLoans.gov.

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What are the issues surrounding the repayment of my loan?

Financial Factoid: Student loans must be repaid!

There are a variety of options for determining your monthly payment, including:

Standard repayment
Long-term, equal-instalment repayment
Graduated repayment
Income-sensitive repayment
Income contingent repayment
Loan consolidation

As soon as you graduate or drop below half-time status, you will get the eligibility rules and repayment terms for these repayment plans as part of your exit counselling session.

After graduating or leaving school, you must let your servicer (i.e. Lender or Guarantor) know about changes in your financial situation and personal information (such as your name, address, Social Security number, references, driver's license number, and the name and address of your expected employer).

It is critical that you notify your servicer of any changes in your financial condition. Your lender/servicer can offer repayment options designed to help you manage your monthly loan payments. In addition, if you have multiple loans and payments, your lender/servicer can help you explore repayment options that will allow you to consolidate multiple loans into a single loan, making payments easier.

Financial Factoid: Can't pay? If you have difficulty making payments on your student loan, contact your servicer immediately. Your servicer will describe the options available to help you deal with temporary difficulties.

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What are my rights and responsibilities?

You are required to repay education loans even if you do not finish your academic programme or the programme does not meet your expectations.
You are required to notify your school and lender or servicer if you have previously received student loans.
You must use money received from student loans for education expenses.
You must not use loan proceeds to purchase or lease a vehicle.
You must notify your lender or servicer in writing of any of the following events:
change of address
name change
failure to enrol at least half-time
failure to enrol for the loan period certified
failure to enrol at the school that certified your loan application
withdrawal from school
transfer from one school to another
graduation
change of employer or employer's address
You have a right to repayment deferments - which may postpone payments - if you meet the eligibility requirements. Deferments can be requested for a number of reasons (such as if you return to school).
You have a right to consider the loan repayment options available to you as you enter the repayment process. These options include loan consolidation.

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What are the consequences if I default on my loan?

If you fail to make payments, your student loan will 'default'. Some consequences of default:

Bad credit, which will affect your ability to get a car loan, home mortgage, or credit cards.
Wage garnishment (withholding a portion of your pay).
Legal action.
Loss of professional licenses.
Withholding of tax refunds.
Repayment Reminders

Repaying your student loan is an important responsibility.

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