Once the Counseling Session is completed and submitted, confirmation information will display. You may print a copy for your records. Saint Leo University will be notified of your entrance counseling completion within 24 hours, if you recorded our school code 001526.
Online Master Promissory Note (MPN)
A Master Promissory Note (MPN) is the binding legal document you sign when you apply for a student loan. It lists the conditions under which you are borrowing and the terms under which you agree to pay back the loan. It will include information on how interest is calculated and the deferment and cancellation provisions. It is very important to read and save this document, because you will want to refer to it later when you begin repaying your loan.
A first-time borrower must complete a Master Promissory Note (MPN). To complete the MPN you will need:
- FSA ID (this is a federal student identification number, it the same one used to electronically sign the FAFSA)
- Your full legal name as it appears on your social security card
- Permanent mailing address
- Driver’s License number and state (if applicable)
- Phone number
- Email address
- Name, address, and phone number for two references. These should be people who have known you for at least one year – preferably relatives – who live at different addresses from one another
Completing a MPN takes about 20 – 30 minutes.
Information regarding the terms and conditions of federal loans can be viewed in the text of a Direct Loans Master Promissory Note.
- Click on “Sign In”.
- Complete the sign on, which includes providing your FSA ID.
- This will open “Welcome to StudentLoans.gov Complete the Personal Information.
- Click on “Complete a Master Promissory Note”.
- The next web page asks you to select the type of loan.
- Complete the MPN. Read the instructions carefully.
- Once MPN is completed and submitted, confirmation information will display. Print a copy for your records.
Direct Loans are awarded in two disbursements in an academic year, i.e. one disbursement each semester for semester-based students. Students in term-based programs will receive 2 disbursements per semester or one disbursement for each 8 week term. The money is credited to your student account and used to pay tuition and fees. If there is a credit balance after paying tuition and fees, along with room and board, if applicable, you will receive a BankMobile card, bank deposit, or check, depending on which option you selected. It will be issued within 14 days of the credit balance.
The deadline to accept federal student loans to ensure they are eligible to disburse is 10 days prior to the last day of a student’s academic year (or last day of enrollment). It should be noted that federal loans must be originated to be eligible to disburse and this process may take up to 10 days after the loan has been accepted.
Students that choose to reject or cancel their loan(s) must notify the University in writing within 14 days of the loan disbursement. Loan cancellation may result in a balance on the account. Students that choose to reject or cancel a loan must understand that these canceled funds cannot be used to pay their Saint Leo University account. These students will need an alternative payment method to cover any remaining educational costs.
A borrower may view loan summary details at www.nslds.ed.gov
A student borrower’s (or parent PLUS borrower’s) loan information will be submitted to the National Student Loan Data System (NSLDS) and can be viewed by the borrower using his/her FSA ID. In addition, the loan information will be accessible by guaranty agencies, lenders, and institutions determined to be authorized users of the data system. Information is available on the borrower’s loan history, including loan type, loan period, loan amount (and principal), refunds (if any). lender, and loan servicer. The loan history is reported to a school when the student files a Free Application for Federal Student Aid (FAFSA), and the information is updated as the loan history changes.
A student borrower’s enrollment status is reported to the National Student Loan Data System (NSLDS) throughout her/his attendance at Saint Leo University.
When a student graduates, withdraws, or drops to less than half-time enrollment, the in-school deferment on loan repayment ends. The lender (or loan servicer) is notified. The borrower will be contacted about repayment. However, it is the borrower’s responsibility, whether or not the lender (or loan servicer) contacts him/her, to make loan repayment arrangements.
LOAN EXIT COUNSELING
When a student borrower graduates, withdraws, or drops to less than half-time enrollment, Saint Leo University’s Financial Aid Office will notify the student borrower to complete online loan Exit Counseling.
The online loan exit counseling will include information on:
- the effect of the loan on the eligibility of the borrower for other forms of aid;
- an explanation of the use of the Master Promissory Note;
- the seriousness and importance of the students' repayment obligation;
- information on the accrual and capitalization of interest;
- borrowers of unsubsidized loans option of paying interest while in school;
- definition of half-time enrollment and consequences of not maintaining half-time enrollment;
- importance of contacting appropriate offices if student withdraws prior to completion of program of study;
- sample monthly repayment amounts;
- the obligation of the borrower to repay the full amount of the loan regardless of whether the borrower completes program or completes within regular time for completion and whether or not the borrower is able to obtain employment upon completion, or is otherwise dissatisfied with or does not receive the educational or other services the borrower purchased from the school;
- consequences of default;
- information about the NSLDS and how the borrower can access the borrower's records; and
- name and contact information for individual the borrower may contact with questions about the borrower's rights and responsibilities or the terms and conditions of the loan.
When you are no longer enrolled at least half-time, your federal loan(s) enters a grace period. A grace period is a window of time after you leave school when you aren’t required to make loan payments. The grace period on federal loans is six months long, beginning from your last day of enrollment. At the conclusion of your grace period you will be responsible for making payments on your loan or arranging for your loan to enter deferment or forbearance. Please be aware, there is no grace period for Direct PLUS Loans—the repayment period for a PLUS Loan begins on the day after the final loan disbursement is made.
Your grace period is a good time to begin thinking about your loan repayment strategy. You are encouraged to contact your loan servicer to select a repayment plan, set up automatic payments, and to update your contact information. If you are unsure of who your lender is or what federal loans you borrowed, you can access this information through NSLDS, the National Student Loan Data System.
A student borrower’s repayment amount will depend on the size of the debt and the length of the repayment period. A loan repayment calculator is available for each type of repayment option below.
The repayment options are:
- Standard Repayment: You arrange to pay a fixed amount each month until your loans are paid in full. Your monthly payments will be at least $50, and you'll have up to 10 years to repay your loans.
- Extended Repayment: To be eligible for the extended plan, you must have more than $30,000 in Direct Loan debt and you must not have an outstanding balance on a Direct Loan as of October 7, 1998. Under the Extended repayment plan, you have 25 years for repayment and two payment options: fixed or graduated. Fixed payments are the same amount each month, as with the standard plan, while graduated payments start low and increase every two years, as with the graduated plan below.
- Graduated Repayment: You arrange to pay smaller amounts initially that increase every two years. The length of the repayment period is up to ten years. Your monthly payment will never be less than the amount of interest that accrues between payments. Although your monthly payment will gradually increase, no single payment under this plan will be more than three times greater than any other payment.
- Income Contingent Repayment: This plan gives you the flexibility to meet your Direct Loan obligations without causing undue financial hardship. Each year, your monthly payments will be calculated on the basis of your adjusted gross income (AGI, plus your spouse's income if you're married), family size, and the total amount of your Direct Loans. Under the ICR plan you will pay each month the lesser of:
1. the amount you would pay if you repaid your loan in 12 years multiplied by an income percentage factor that varies with your annual income,
2. 20% of your monthly discretionary income.
If your payments are not large enough to cover the interest that has accumulated on your loans, the unpaid amount will be capitalized once each year. However, capitalization will not exceed 10 percent of the original amount you owed when you entered repayment. Interest will continue to accumulate but will no longer be capitalized.
The maximum repayment period is 25 years. If you haven't fully repaid your loans after 25 years (time spent in deferment or forbearance does not count) under this plan, the unpaid portion will be discharged. You may, however, have to pay taxes on the amount that is discharged.
- Income-Based Repayment: You arrange monthly payments based on your income during any period when you have a partial financial hardship. Your monthly payment may be adjusted annually. The maximum repayment period under this plan may exceed 10 years. If you meet certain requirements over a specified period of time, you may qualify for cancellation of any outstanding balance of your loans.
The Direct loan servicer will send information about repayment, and you will be notified of the date repayment begins. However, you are responsible for beginning repayment on time, even if you do not receive this information. Remember: Failing to make payments on your loan can lead to default with severe consequences.
Sample Monthly Loan Repayment Schedule
The table below reflects monthly loan repayments under a standard 10-year repayment plan. Borrowers interested in a plan that accrues the least amount of interest should stay on a standard 10-year repayment plan.
The table displays monthly repayment amounts for loans with the following interest rates – 3.4%, 5%, 6.8%, and 7%. The loan amounts range from $5,000 to $30,000 in increments of $5,000. For example, if a student borrowed $10,000 at a 5% interest rate, the monthly payment for principal and interest would be $106 a month for ten years.
This chart is intended to provide a very general overview of what a monthly loan repayment schedule could look like. Borrowers are encouraged to use the Repayment Estimator on the Federal Student Aid website. The Repayment Estimator can be used to estimate your federal student loan payments under each repayment plan.
TROUBLE MAKING YOUR PAYMENTS
If you have trouble making payments on your loans, always contact your loan servicer as soon as possible. Your servicer will work with you to determine the best option for you. Options include:
- Changing repayment plans.
- Requesting a deferment. If you meet certain requirements, a deferment allows you to temporarily stop making payments on your loan.
- Requesting a forbearance. If you do not meet the eligibility requirements for a deferment but are temporarily unable to make your loan payments, then (in limited circumstances) a forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments.
If you stop making payments and don't get a deferment or forbearance, your loan could go into default, which has serious consequences.
DEFAULT ON A STUDENT LOAN
If you default, it means you failed to make payments on your student loan according to the terms of your promissory note, 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.
The consequences of default are severe! The federal government may take action to recover the money, including;
- 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.
- You can be sued.
In many cases, default can be avoided by submitting a request for a deferment, forbearance, or discharge and by providing the required documentation. To learn what actions to take if you default on your loans, see the Department of Education’s Default Resolution Group Web site.
A deferment is a period of time during which no payments are required and interest does not accrue (accumulate) on a subsidized loan (but it does accumulate on an unsubsidized loan).
Receiving a deferment is not automatic. You must apply for it by contacting the Direct Loan servicer. You MUST continue making payment on your loan until you are notified that your deferment has been granted. If you stop making payments before the deferment is approved, your loan could become delinquent or in default.
In-School deferment: While enrolled in an approved graduate fellowship program or an approved rehabilitation training program for the disabled Economic hardship deferment (for up to 3 years): Unable to find full-time employmentEconomic hardship deferment (includes Peace Corp Service) (for up to 3 years): Economic hardship as defined by federal regulations.Military Service deferment: Borrower is on active duty during a war or other military operation or national emergency and if the borrower was serving on or after October 1, 2007, for an additional 180-day period following the demobilization date for the qualifying service.Post-Active Duty Student deferment: For a borrower who is a member of the National Guard or other reserve component of the U.S. Armed Forces (current or retired) and is called or ordered to active duty while enrolled at least half-time at an eligible school or within six months of having been enrolled at least half-time, during the 13 months following the conclusion of the active duty service, or until the borrower returns to enrolled student status on at least a half-time basis, whichever is earlier.
|In-School deferment: While enrolled at least half-time study at a postsecondary school
|In-School deferment: While enrolled in an approved graduate fellowship program or an approved rehabilitation training program for the disabled
|Economic hardship deferment (for up to 3 years): Unable to find full-time employment
|Economic hardship deferment (includes Peace Corp Service) (for up to 3 years): Economic hardship as defined by federal regulations.
|Military Service deferment: Borrower is on active duty during a war or other military operation or national emergency and if the borrower was serving on or after October 1, 2007, for an additional 180-day period following the demobilization date for the qualifying service.
|Post-Active Duty Student deferment: For a borrower who is a member of the National Guard or other reserve component of the U.S. Armed Forces (current or retired) and is called or ordered to active duty while enrolled at least half-time at an eligible school or within six months of having been enrolled at least half-time, during the 13 months following the conclusion of the active duty service, or until the borrower returns to enrolled student status on at least a half-time basis, whichever is earlier.
If you temporarily cannot meet your repayment schedule, and you do not meet the requirements for a deferment, the loan servicer may grant you forbearance. During forbearance, your loan payments are postponed or reduced. Unlike deferment, whether your loans are subsidized or unsubsidized, the interest continues to accrue (accumulate). You are responsible for paying it, no matter what kind of loan you have.
Depending on the circumstances, you may receive forbearance for periods of up to 12 months at a time for a maximum of three years. You will have to provide documentation to the Direct Loan Servicer to show why you should be granted the forbearance. You MUST continue making payment on your loan until you are notified that your forbearance has been granted.
LOAN DISCHARGE (CANCELLATION)
A loan discharge (cancellation) releases you from all obligation of having to repay a student loan. However, it is only under specific circumstances that this is possible. Two examples are your death or your total and permanent disability. Also, your loan might be discharged because of the type of work you do: teaching in a designated low-income school, for example. In order to qualify for a loan discharge, you must contact the Direct Loan Servicer.
It is important to remember that your loan can not be canceled because you did not complete the program of study at your school (unless you could not complete the program because the school closed). Also, cancellation is not possible because you did not like the school or program, or you did not obtain employment afterwards.
For more information on Loan Discharge/Cancellation go to Federal Student Aid and search Discharge/Cancellation at: http://studentaid.ed.gov/repay-loans/#forgiveness.
Loan consolidation is a way for you to consolidate (combine) multiple federal student loans with various repayment schedules into one loan. When consolidated, you can make just one monthly payment. You can consolidate during your grace period, once you have entered repayment, or during periods of deferment or forbearance.
With a consolidation loan, your payments might be significantly lower, and you can take a longer time to repay (up to 30 years). Also, you might pay a lower interest rate than you would on one or more of your existing loans. However, it is important to remember that consolidation significantly increases the total cost of repaying your loans. Because you can have a longer period of time to repay, you will pay more interest. In fact, consolidation can double total interest expense. So, compare the cost of repaying your unconsolidated loans with the cost of repaying a consolidation loan.
To qualify for a consolidation loan or to receive more information about interest rates, contact your Direct Loan Servicer and read about Loan Consolidation on Federal Student Aid at: http://studentaid.ed.gov Search the words Loan Consolidation.
It is important to keep in touch with your Direct Loan servicer. You must notify your lender (or its loan servicer) when you:
- withdraw from school
- drop below half time status (6 credits=half time)
- change your name, address, or Social Security number
- transfer to another school
Failure to keep updated information with your loan servicer could cause your loan to go into default or to be sent to a collection agency.
- More information explaining Federal Financial Aid can be found at www.studentaid.ed.gov
- More information on Direct Loans go to the U.S. Department of Education’s Student Loans website at www.studentloans.gov
If you have additional questions contact the Saint Leo University Financial Aid Office.