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MBC Financial Aid: Loans

Financing education is first a family effort, and we encourage students and parents to talk to each other about financial aid and especially the loans you are taking. Loans are an important part of most aid packages. Therefore, it is important that you understand all the aspects of each loan program. The U.S. Dept. of Education provides on on-line version of the Student Guide which describes all federal aid programs, including loans, in depth.

The Perkins Loan

Because of limited funding, the Perkins Loan is awarded based on the student’s need for a Pell Grant. The Perkins Loan is not subject to origination fees and bears interest at a fixed, 5% interest rate during repayment. Promissory notes are completed at the time of enrollment at the Business Office. Repayment does not occur until nine months after leaving school or graduation. For more in-depth information about repayment of this loan please contact the Business Office.
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The Direct Stafford Loan

The Direct Stafford Loan is awarded by the aid office per federal guidelines. To accept the federal direct subsidized and/or unsubsidized loans listed on the student’s financial aid award letter, the student must sign and return the award letter to the Financial Aid Office.  The subsidized loan interest is paid by the government for your period of at least half-time enrollment in school. The unsubsidized loan interest is the responsibility of the student from the time of the disbursement. Capitalization of interest can be chosen to defer payment until after graduation. The maximum Stafford interest rate is 8.25%. Repayment is the responsibility of the student.
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Direct PLUS Loan

The Direct PLUS Loan is a loan for parents of undergraduate, dependent students. Loan eligibility is based on college costs, less other aid, subject to a credit check by the lender. The award letter will only show the amount of the Direct PLUS Loan to direct costs of Mary Baldwin College. A parent can increase the loan amount up to the student’s cost of attendance less any other financial aid received. The extra funds can be used to cover loan fees, books or other educational expenses. Contact our office for assistance in determining the amount of loan you may need. Parents begin repayment 60 days after the second disbursement of the loan (usually in March of an academic year). The maximum PLUS interest rate is 9%.
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Disbursement of Direct Loans

All family federal education loans are disbursed in at least two payments (usually by semester) and are subject to as much as a 4.02% origination fee which is withheld by the lender and guarantee agency at the time of disbursement.

Once funds are received and enrollment status and continued eligibility verified, funds are applied directly to the student’s account. Funds are received no earlier than the week after add-drop period with the first refund checks issued approximately four weeks after the start of courses.

If a student’s eligibility has changed because of withdrawal or reduced enrollment, funds will be returned to the lender. Credit balances on a student’s account must be refunded within 14 days of the credit balance occurring. If any activity occurs on your student account, such as loan disbursements, you will receive updated billing within 30 days. You have the right to cancel any loan up to 14 days after the receipt of the first billing that reflects the disbursement of that loan.
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Alternative Loans

If you have used all of your federal loan eligibility, and your parents are not able or do not wish to take a parent loan, you may want to consider applying for an Alternative Loan.

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Entrance Counseling

Student Loan Entrance Counseling is completed by first-time student borrowers prior to enrollment and/or disbursement of loan proceeds. Students should complete entrance counseling at www.studentloans.gov. Federal regulations require an entrance counseling session to be sure students are aware of the scope and nature of loans.

Exit Counseling

An Exit Counseling Session is required when a student graduates, withdraws from classes or drops below half-time enrollment. The session stresses the importance of repayment of student loans and the impending date that repayment will begin. You can complete your exit counseling at www.mappingyourfuture.org.
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Mary Baldwin College Lender Code of Conduct

Staff members in the Office of Admissions and Financial Aid are prohibited from accepting gifts from any lender of student and parent loans or from any loan guarantee agency.  Gifts include but are not limited to travel, hotel or motel lodging, entertainment, restaurant meals, office supplies and event tickets.  Exceptions include such things as newsletters or reprints of articles and presentations designed to inform college officials about relevant issues.

In order to ensure the fair and consistent selection of lenders for student and parent loans, the following additional policies governing the College’s relationship with lenders will apply:

Mary Baldwin College staff members may not serve on lender advisory boards;

Mary Baldwin College and its employees will not engage in financial arrangements with lenders that result in a financial benefit to the College or its employees, including revenue sharing, referral fees or stock options;

Mary Baldwin College and its employees will not accept gifts, including computers or other equipment, from lenders at no cost or at a rate below market price;

Mary Baldwin College and it employees will not accept printing or publication services from lenders at no cost or at a rate below market price.  Brochures and mailings to borrowers as part of the lender’s normal customer service and marketing activities are exempt from this policy;

The use of Mary Baldwin College’s name, emblem or logo by lenders is prohibited;

Mary Baldwin College will not accept staffing assistance of “call center” services from lenders.  Calls to borrowers as part of the lender’s normal customer service activities are exempt from this policy.
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More Information

For more financial aid tips, loan application status, account balances, learning about deferment options, finding repayment options, and learning about loan consolidations please contact the Financial Aid Office.  Direct Loans will also have information about these topics.  You may also contact another lender of your choice about alternative loans.  The Financial Aid Office recommends that you and your family only consider alternative loans as a last resort.
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Questions? Contact Financial Aid.