Bunker Hill Community College

Loans

• Federal Stafford Loans
• Applying for a Federal Stafford Loan
• Federal Plus Loans
• Alternative Loans
• Why a preferred lender?

Federal Stafford Loan:

Please note: The Financial Aid Office wants students to seriously consider borrowing what they absolutely need.  Excessive borrowing can burden a student’s credit report and make it difficult to secure additional credit after college.

The Federal Stafford Loan Program is a program sponsored by the US Department of Education and is designed to offer students educational loans to assist them with their educational expenses while attending college. There are two types of loans that are offered under the Stafford Loan Program. They are the SUBSIDIZED Stafford Loan and the UNSUBSIDIZED Stafford Loan.

In order to qualify for the Stafford Loan Program, you, the student, must complete a FAFSA (Free Application for Federal Student Aid) which is then submitted to the Department of Education. The results are then sent to Bunker Hill Community College with the information determining which program you qualify for (Subsidized vs. Unsubsidized). Below is a description of the difference between these two loans and some basic information about borrowing from these loan programs. You will also find a link to download the Loan Request Form and a list of required documentation from you, the student that is needed in order to complete the loan application process.

SUBSIDIZED STAFFORD LOAN- Students who demonstrate financial need as determined by the results of their FAFSA qualify for this loan. The federal government pays the interest on this loan on behalf of the student while they are enrolled at least half-time (6 credits +) and for six months after a student graduates, drops, or withdraws from college.

UNSUBSIDIZED STAFFORD LOAN – Students who do not demonstrate need as determined by the results of their FAFSA can qualify for this loan. The student is responsible for the interest on this loan that accrues even during periods of enrollment of at least half-time (6 credits +). Borrowers may choose to defer that interest while they are in school and during the six month grace period, but that interest will be capitalized.

Borrower Rights and Responsibilities

• Stafford Loans MUST be repaid; including interest and fees associated with borrowing the loan, even if you do not finish your education, are not satisfied with your education, or cannot find a job.
• The amount a student will be billed monthly when they enter repayment varies according to the total amount the student has borrowed, with a minimum payment no less than $50.00 per month.
• Payments begin on the Stafford Loans six months after a student graduates, withdraws, or drops below half-time (6 credits +) status.
• Repayment options range from 5 years to 30 years depending on the plan that the student chooses.
• A student may prepay any or all of the Stafford loans at any time without penalty.
• Students may be able to qualify for a Deferment (postponement of payments) or Forbearance (reduced or delayed payments) on their Stafford Loans if they meet the eligible criteria for such programs.
• Students will be notified if their Stafford loans are transferred to a new holder or sold to a secondary market.
• Students MUST notify their Financial Aid Office, lender of their loans, and holder of their loans if any of the following changes occur:

Transfer to another school
Enroll less than half-time
Change their Social Security number
Withdraw from school
Change their name, address, and/or telephone number
Change their graduation date
Are unable to make the required payments when due.

• Failure to repay your student loans can likely result in the following actions being taken:

The loans will be referred to a collection agency.
Students may receive a negative credit rating which can adversely affect attempts to make major credit purchases for seven years or more.
The entire balance of the unpaid loans including interest, fees, and penalties may become due immediately.
Wages may be garnished by your employer and federal and state income tax refunds may be withheld.
You may become ineligible for future federal and/or state financial aid funds.

Applying For A Federal Stafford Loan

Student Type	Completed Credits	Subsidized	Unsubsidized	Annual Maximum
Dependent	Less than 30	$3,500	$2.000	$5,500
Dependent	30 or more*	$4,500	$2.000	$6,500
Independent	Less than 30	$3,500	$6,000	$9.500
Independent	30 or more*	$4,500	$6,000	$10,500

General Borrower and Student Eligibility Requirements
Each student borrower seeking a Stafford loan, each parent borrower seeking a PLUS loan, and each student for whom a PLUS loan is being sought must meet the following eligibility requirements: 

• The individual must be a U.S. citizen or national or eligible non-citizen.
• The individual must provide his or her valid Social Security number.
• The individual must not be in default on any federal education loans.
• The individual must not be liable for an overpayment nor have exceeded annual oraggregate limits imposed on any Title IV program.
• The individual must not have borrowed in excess of any annual or aggregate Federal Stafford loan limits.
• The individual must not have been determined ineligible—solely due to the individual’s error or as a result of providing false or misleading information— for a FFELP loan that has already been obtained. The individual is entitled to receive an additional Stafford or PLUS loan only if he or she repays in full any ineligible loan or ineligible portion of a loan.
• The individual must not have property subject to a judgment lien for a debt owed to the United States.
• The student must have—and may self-certify that he or she has—at least a high school diploma or the recognized equivalent of a high school diploma, or the student must meet one of the following standards:
• The student must (a) be beyond the age of compulsory school attendance in the state in which the postsecondary school is located and (b) pass an independently administered ability-to benefit test that has been approved by the Department.
• The student, if currently enrolled, must be maintaining satisfactory academic progress (SAP), as determined by the school according to federal regulations and the school’s policy.
• Unless exempt, a male student must register with the Selective Service. A female student is exempt from the Selective Service registration requirement.
• The student must not have fraudulently borrowed a loan, provided information that caused his or her loan to exceed applicable annual loan limits during an academic year, nor knowingly exceeded an aggregate loan limit for the FFELP, FDLP, or Federal Perkins Loan Program.
• The student must not have had his or her eligibility for Title IV aid denied when sentenced by a court due to conviction of possession or distribution of a controlled substance, under the authority of the Anti-Drug Abuse Act of 1988. A student whose financial aid eligibility is denied as part of the penalty for a drug conviction will be placed on the Department’s Drug Abuse Hold File at the direction of the Department of Justice. The student will receive a Student Aid Report (SAR)with no calculated EFC and a comment instructing him or her to contact the U.S. Department of Education if the student wishes to contest the finding.
• The student must not have been convicted of an offense involving the possession or sale of an illegal drug within prescribed time frames Any student who applies for federal student financial aid will receive a warning on his or her Student Aid Report (SAR) indicating that a conviction for the possession or distribution of a controlled substance may result in the loss of the student’s eligibility for Title IV aid.
• The student must not be incarcerated at the time funds are disbursed or delivered.

Federal Plus Loans (Parent Loan for Undergraduate Students)

The Federal PLUS loan is an educational loan offered to the Parent’s of a student attending college through FFELP (Federal Family Education Loan Program). This loan is often used to supplement a student’s financial aid package to assist with educational expenses related to a student’s attendance at college. The PLUS loan does not require that a student complete a FAFSA (Free Application for Federal Student Aid), however, it is highly recommended that a student complete the FAFSA to see if they  qualify for Federal or State grants, or the lower interest Stafford Loans.
           
Parents wishing to apply for the PLUS loan should read the link in the previous section entitled General Borrower and Student Eligibility. It is important to note that the PLUS loan IS a credit-based loan. Parents will be required to complete the Loan Request Form (see link below), submit that form to the Financial Aid Office located in Room B-213 off the main lobby of the Charlestown campus, and log on to the ASA website to apply for the PLUS loan (see website below). Once a Parent’s credit has been approved, notification will be sent to both the borrower and the school notifying them that the loan is ready for certification by the school. Once the loan has been certified by the Financial Aid Office, a letter will be sent to the student notifying them of their PLUS loan award.

To Apply For A Federal PLUS Loan

1. Download the Federal Plus Loan Request Form.
2. Complete Master Promissory Note with ASA.

Please note:
*** PLUS loan maximum eligibility amounts are listed on the Loan Request form, and
cannot exceed the amounts posted for an Academic year.
***If a PLUS loan is denied based on the Parent’s credit history, the student is eligible to
            receive an additional Unsubsidized loan.

Parent Borrower Eligibility Requirements
For purposes of obtaining a PLUS loan, an eligible parent borrower is a student’s natural or adoptive mother or father. The spouse of a parent who remarried is eligible to borrow a PLUS loan if the spouse’s income and assets would have been taken into account when calculating a dependent student’s expected family contribution (EFC). Any two eligible parents may borrow separately to provide for the educational expenses of the student—provided the combined borrowing of the parents does not exceed the calculated cost of attendance (COA) minus aid.

To be eligible for a PLUS loan, a parent borrower must be applying for the loan to pay the postsecondary educational costs for an eligible dependent undergraduate student who is enrolled or accepted for enrollment at least half time at a participating school.  Each PLUS loan borrower must certify, as part of the PLUS Application and Master Promissory Note (PLUS MPN) filed with the school or lender, a statement of educational purpose.

Parent borrowers also must be determined creditworthy to be eligible for a PLUS loan

Alternative Loans

Please note: The Financial Aid Office wants students to seriously consider borrowing what they absolutely need.  Excessive borrowing can burden a student’s credit report and make it difficult to secure additional credit after college.

Alternative loans are private education loans designed to meet the needs of students who may not qualify for other forms of Financial Aid such as Federal and State grants, or the Federal Stafford Loan Program. It is also designed for students who may be taking courses but are not enrolled in a degree or certificate program, for students that owe a balance to the college from a previous semester, or for students whose educational expenses are not being met by the Federal and State Grant and/or guaranteed Federal Stafford Loan Programs. Students are encouraged to apply for the Federal Guaranteed Stafford Loan Program first, since the Stafford Loan Program usually offers better interest rates, lower fees, and better repayment options than alternative loans

Alternative loans have different guidelines for eligibility based on the type of loan and the lender issuing the loan. Some of the criteria for eligibility for alternative loans may include:

• Credit check
• Co-borrower
• Income verification
• Matriculation into a Degree / Certificate Program
• Enrolled in a specific course load

The following lending institutions are preferred alternative loan lenders that Bunker Hill Community College recommends for its students. The Financial Aid Office has built relationships with these lenders, thereby making a smoother process for students to receive these funds, from application to disbursement of the loans. Please visit one of the following websites to acquire additional information about these alternative loans and to apply for a loan online.

Preferred Alternative Loan Lenders

 Sallie Mae Signature Loan - www.salliemae.com 

MEFA Loans – www.mefa.org

***Please note***      If you choose to use a lender other than one of the lender above, it is your responsibility to ensure that all proper paperwork is completed and that the Financial Aid office at Bunker Hill  Community College receives all of the necessary documentation to certify the loan on your behalf. (Certification documentation, Loan Program requirements, etc.)

Why a preferred lender?

Why does Bunker Hill Community College have Preferred Lenders?
Why Does the Financial Aid Office have a preferred lender list?  While there are dozens of student loan lenders offering hundreds of different products, features, benefits and incentives; we know that the average student/parent borrower does not have the time or resources to research all of the available options.  We also know that the promotional material (including Web sites) that lenders employ are advertising, and as such are not designed to give the full picture or provide side-by-side comparisons.  We have even found some of that advertising to be intentionally misleading.  
Bunker Hill Community College monitors the performance of all of our student loan lenders to ensure the highest quality of service for our students and their families.  Our preferred lenders have demonstrated a commitment to providing the very best in customer service, technology and quick loan processing.  They have worked collaboratively with the higher education community to continuously improve and expand the services we collectively provide to students and families, and to keep borrowing costs as low as possible.  They provide us detailed information about their products and services so we can give you a side-by-side comparison of interest rates, fees, features and benefits.  They have agreed to a strict set of ethical standards and business practices and want to compete fairly and honestly for your business.  Mostly, they have worked together with Bunker Hill Community College to ensure that the student loan process is as smooth and efficient as possible for you, the borrower.
Am I obligated to use one of the preferred lenders?
Of course not!  You are always free to choose among the dozens of lenders who provide student loans.  Please be aware that some smaller banks, credit unions, and start up lenders do not participate in the electronic processes used at Bunker Hill Community College.  Selection of one of these paper process lenders will significantly slow the processing of your student loans throughout your time at Bunker Hill Community College , and such delays will be financially problematic for most families.  Be sure the lender you choose is participating by consulting our list of Preferred Lenders
How does Bunker Hill Community College determine which lenders are preferred lenders?:
We judge the performance of our lenders on numerous factors each academic year.  This is why the list changes slightly from year-to-year as new lenders are judged to be superior by our experienced team of Advisors.  If our lenders are not performing, our students make sure we know about it!  There are many lenders that provide good services without making our preferred list, but you can be sure that the lenders who make the list have earned the designation through superior performance in serving you - our students and families.  

All of our preferred lenders:

1. Have proven records of great customer service in dealing with our students and parents.  This includes offering a variety of payment options (including auto-debit and web payment), while maintaining trained staff to answer questions via a toll-free telephone number (including evenings and weekends).  We want to ensure that you get the same great service from your student loan lender that you get from us.
2.  Are divisions/affiliates of federally-insured banks, federally-insured savings banks, federal credit unions, or other established financial services companies that have been actively engaged in the student loan industry for at least five years.  This helps to ensure that the lender you choose will still be there for you when you need a loan in future years.
3. Offer good value in the loan services they offer.  Value isn’t always just about price, although our list usually contains several of the lowest-cost providers.  Value might include added services like incentives for on-time payments, opportunities to defer payments until graduation, or even a free checking account.  This allows you to determine which combination of discounts/benefits is best for your situation.
4. Believe that it is important to adhere to a set of business and ethical standards in their interactions with our students and families. 
5. Provide value added services to our students through cooperative efforts with the College.  This includes numerous activities including: providing useful websites to educate students on financial issues, offering debt management tools and programs, and offering credit management/credit card programs.  Responsible lenders want to help our students become responsible, credit-worthy consumers in the future.
We hope that our list of preferred lenders will be useful to you in making a good lender choice.