Introduction to U.S. loans
Effective July 1, 2010, the US Department of Education requires all schools disbursing US government loans to do so through the US Government's William D. Ford Federal Direct Loan Program. This means that the US government will be electronically disbursing student loan funding directly to schools without the participation of any third parties (i.e, banks or financial institutions).
Under the Direct Loan program, your lender is the United States Department of Education.
The Borrower is the person who borrows money through the US Government's William D. Ford Federal Direct Loan Program. For certain loans, your parents may be the borrowers.
The Financial Aid and Awards Office (FAAO) at Concordia University works with you and your parents to determine your eligibility for different types of loans based on US federal guidelines. The FAAO also approves your federal loan application and the amount you can borrow. It reports enrolments and other information about Direct Loan borrowers to the US government, and is responsible for complying with US laws and regulations governing the Direct Loan program.
The US Federal Government is responsible for the disbursement of Direct Loan funds. In the Direct Loan program, funding is transferred directly to schools without the participation of third parties (such as banks or other financial institutions). The US Department of Education is your lender.
Direct Subsidized Loans are available for undergraduate degree students. Eligibility is based on financial need as defined by the US Department of Education. "Subsidized" means that the US government pays the interest while you are studying at least half-time. The government also pays the interest during any authorized period of deferment and for the grace period.
Stafford Unsubsidized Loans are available for undergraduate, graduate degree students. Eligibility is not based on financial need. You are responsible for paying the interest from the time the money is disbursed. The interest may be paid as it is due or it may be postponed and allowed to accumulate while you are in school as well as during any authorized period of deferment and during the grace period. If payments are postponed, the interest accrues and is capitalized (added to the amount you borrowed). Capitalized interest must then be paid back with the loan after any authorized period of deferment or after the grace period.
If you are a first-time borrower on or after July 1, 2013, there is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. This time limit does not apply to Direct Unsubsidized Loans or Direct PLUS Loans. If this limit applies to you, you may not receive Direct Subsidized Loans for more than 150 percent of the published length of your program. This is called your “maximum eligibility period.” Your maximum eligibility period is based on the published length of your current program.
For example, if you are enrolled in a four-year bachelor’s degree program, the maximum period for which you can receive Direct Subsidized Loans is six years (150 percent of 4 years = 6 years).
Because your maximum eligibility period is based on the length of your current program of study, your maximum eligibility period can change if you change to a program that has a different length.
Also, if you receive Direct Subsidized Loans for one program and then change to another program, the Direct Subsidized Loans you received for the earlier program will generally count toward your new maximum eligibility period.
Certain types of enrollment may cause you to become responsible for the interest that accrues on your Direct Subsidized Loans when the U.S. Department of Education usually would have paid it.
Maximum borrowing limits for Direct loans
The following chart provides maximum annual and total loan limits for both subsidized and unsubsidized loans as of July 1, 2012.
(Except students whose parents are unable to obtain Plus Loans)
(And dependent undergraduate students whose parents are unable to obtain Plus Loans)
|First-Year Undergraduate||$5,500—No more than $3,500 of this amount may be in subsidized loans.||$9,500—No more than $3,500 of this amount may be in subsidized loans.|
|Second-Year Undergraduate||$6,500—No more than $4,500 of this amount may be in subsidized loans.||$10,500—No more than $4,500 of this amount may be in subsidized loans.|
|Third-Year and Beyond Undergraduate||$7,500 per year—No more than $5,500 of this amount may be in subsidized loans.||$12,500 per year—No more than $5,500 of this amount may be in subsidized loans.|
|Graduate or Professional Degree Students||Not Applicable||$20,500 - Unsubsidized ONLY|
|Maximum Total Debt from Subsidized and Unsubsidized Loans||$31,000—No more than $23,000 of this amount may be in subsidized loans.||
$57,500 for undergraduates—No more than $23,000 of this amount may be in subsidized loans.
$138,500 for graduate or professional students—No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes all federal loans received for undergraduate study.
Note: The maximum total loan limits include any Subsidized Federal Stafford Loans or Unsubsidized Federal Stafford Loans you may have received under the Federal Family Education Loan (FFEL) Program. As a result of legislation, no further loans are made under the FFEL Program as of July 1, 2010.
Graduate and professional students enrolled in certain health profession programs may receive additional unsubsidized Direct Loan amounts each academic year beyond those shown above. For these students, there is also an increased aggregate loan limit of $224,000 (maximum $65,500 subsidized).
Federal Parents PLUS Loans are available for parents who meet certain credit guidelines and whose child is a dependent undergraduate student as defined by the US Department of Education. Eligibility is not based on financial need. Parents may use this loan to pay the entire cost of attendance minus any other financial aid received by their dependent undergraduate student. Repayment is due to commence within 60 days after the loan is fully disbursed, although deferment of payment may be available through select lenders. This loan does not have a grace period.
Federal Graduate PLUS Loans are available for graduate and professional students. Before July 1st, 2006, this loan was only available to the parents of dependent undergraduate students. Graduate students may borrow this loan to cover the difference between cost of attendance and all other awarded aid after applying for other Federal aid. This loan has a federal credit check process. The review looks for bad credit only. You do not have to meet other financial standards as with other private alternative loans. Repayment is due to commence within 60 days after the loan is fully disbursed, although deferment of payment may be available. This loan does not have a grace period.
The maximum PLUS loan amount that a parent or graduate and professional degree student can borrow is the student's cost of attendance as calculated by the University minus any other financial aid the student receives.
Alternative loans are private, non-governmental funds that are available if you need additional sources of funding. You may borrow up to your cost of attendance (COA) minus any other financial aid that you receive for that aid year. Alternative loans have different interest rates, fees and repayment options than US government loans. A co-signer may also be required. Some lenders offer borrower benefits that reduce your loan balance or lower your interest rates. If you are not registered in a degree program, you may still apply for alternative loans. Please keep in mind that it is your decision which loan product you choose. The FAAO will certify any alternative loan that you choose provided the organization accepts that you are attending an institution outside of the US.
Application Process for a US alternative loan
- Students should apply online via the loan provider's website (e.g.: salliemae.com or vsac.org)
- Contact a US Financial Aid Advisor at the FAAO to advise them you have applied for private loan funding.
- Complete all required documents as required by the US Financial Aid Advisor
- Respond to the Cost of Attendance (COA) email sent to you from the US Financial Aid Advisor
- Wait for your alternative aid cheque pick-up notification email
Receiving your US alternative loan
All students receive their alternative loan funds by cheque in two or three equal disbursements.
- An e-mail notification is sent out by the Financial Aid & Awards Office when the cheque arrives.
- The student must go to the Birks Student Center (LB-185) to endorse the cheque which is subsequently deposited into your student account to pay your current charges.
Your responsibilities as a student
- Repay your loan. Your obligation to repay becomes legally binding when you sign the Master Promissory Note (MPN) and authorize the electronic transfer of funds to your student account. Your requirement to repay does not go away because you; don't complete your educational program, cannot find employment, were not satisfied with the education or other services your received from the University, or were notified that your loan was sold to another party by your lender.
- If you withdraw from the University, you may be required to repay part of or all your loan(s). You may also owe the University any loan funds returned on your behalf. The US Department of Education regulations state that a school must return loan funds if a student has not completed a minimum of 60% of the payment/enrolment period. If you received more loan funding than was "earned," the excess funds must be returned by the school and/or the student. The amount of money to be returned is determined by a specific formula that is used in a calculation called a "Return to Title IV." If you did not receive all of the funds that were earned, you may be eligible for a post-withdrawal disbursement. Further information is available HERE [pdf].
- Make a Minimum Payment. A minimum monthly loan payment is required. This minimum amount varies depending on the amount you borrow and your repayment plan.
- Pay on Time. You must make your payments on time unless you have made special arrangements with the lender or servicer. Many lenders offer repayment incentives to reward you for paying on time.
- Notify the lender about changes. Let them know if you change your name, address, contact information, driver's license number or Social Security Number. You must also inform them if you withdraw from the University or drop below half-time status.
- Complete a Master Promissory Note (MPN). When you decide to enter into an agreement with a particular lender for your student loan, you will sign an MPN. This document explains the terms and conditions of your loan in full detail. It also serves as the legal document requiring you to repay the loan with interest. Read through the entire promissory note before you sign it and make sure you understand your rights and responsibilities. The MPN is valid for a maximum of one year when attending a university outside the US. You must provide the original MPN to the school. It is important to keep a copy of your MPN in your files.
Federal regulations require that the University tracks the academic progress of student loan recipients from the first date of enrolment at Concordia University, whether or not loans were received at that time. Credits transferred from all other credit sources will be considered as attempted and completed credits in the evaluation of the completion rate standards, but these courses do not affect the calculation of your GPA.
Concordia University requirements for satisfactory academic progress
In order to be eligible for US loans, you must meet Concordia University's institutional requirements for minimum satisfactory performance. These are defined in the Undergraduate and the Graduate Calendar under each Faculty's section. Note that you must maintain a minimum annual GPA of 2.0 in all Undergraduate Faculties and 3.0 for Graduate Faculties.
DISC, INC, MED, DEF, AU, F/FNS/R/NR & S Grades, and repeated course work will be treated as follows:
- Course withdrawals (DISC) after the drop/add period are not included in the GPA calculation but are considered as non-completion of attempted course work.
- Incomplete (INC) indicates that you have not completed required course work and that the instructor has agreed to accept the work after the due date. The notation is always used in combination with a letter grade such as B/INC and the grade is used in the calculation of the various GPAs.
- Medical (MED) indicates that you have been unable to write a final examination or complete other assignments due to a long-term medical situation. A MED notation carries no grade point value.
- Deferred (DEF) indicates that you have been unable to write a final examination. A DEF notation carries no grade point value.
- An audit (AU) grade is not considered attempted course work. It is not included in the GPA calculation or completion rate determinations.
- F/FNS/R/NR grades are treated as attempted credits that were not earned, and so are included in both the calculation of GPA and minimum completion rate.
- A satisfactory grade (S) is treated as attempted credits that are earned, but is not included in calculation of GPA.
- In case of repeated courses, only the grade corresponding to the latest attempt of the course will be used in calculation of the various GPAs, but every repeated attempt will be included in the completion rate determinations. No loans can be disbursed for a repeated attempt if you have already achieved a passing grade for that course. The University's policy means that you receive aid for only one repeat of a course.
Satisfactory Academic Progress for Titile IV Aid Recipients
The following policy applies to Title IV aid recipients who are considered to be full-time, quarter-time or part-time in undergraduate or graduate level studies in the Title IV aid-eligible programs.
As a student loan recipient, you are rquired to be in good standing, maintain satisfactory academic progess toward your degree requirements for each semester in which you are enrolled, and complete your degree in the prescribed period according to your program. Satisfactory Academic Progress (SAP), as described below, is evaluated on an annual basis in June. Note, that Satisfactory academic Progress for Title IV aid recipients is stricter than the university's regulations as pace of progression in addition to academic performances are measured. Failure to maintain satisfactory academic progress may result in the cancellation of your Title IV aid.
Basic Standard for Satisfactory Academic Progress
To achieve SAP as per the US Department of Education, students must:
- Maintain a minimum annual GPA of 2.0 (undergraduates) and 3.0 (graduate studies)
- Maintain a minimum cumulative rate of two-thirds of credits attempted (67%)
Also, the financial aid office will ensure that students are completing their educational program within a time frame no longer than 150% of its published length. (For example, a student must complete their program after attempting a maximum of 180 credits for a 120-credit program).
Furthermore, for students enrolled in an educational program of more than two academic years, must have a minimum CUMULATIVE GPA of 2.0 or have the academic standing consistent within their faculty's published requirements for graduation.
Example of ideal pace of progression for an undergraduate student:
0 - 30 credits = year 1
30 - 60 credits = year 2 (with a minimum Cummulative GPA of 2.0 or more)
60 - 90 credits = year 3
90 - 120 credits = year 4
For graduate students, the maximum timeframe will be defined by the School of Graduate Studies upon admission and will be monitored and evaluated on an annual basis.
Student Loan Denied Status
If you fail to meet the minimum 2.0 annual Grade Point Average standard, or fail to complete at least two-thirds of cumulative credits attempted, you will immediately lose your eligibility for Title IV funding. No Title IV financial aid will be disbursed to you unless you are removed from Student Loan Denied status.
If you fail to satisfy the 150% requirement, you will also be placed on Student Loan Denied status. There are no exceptions to this requirement. If you are in a 120-credit bachelor degree program and have attempted in excess of 180 credits including transfer credits, you are no longer eligible for financial aid.
All Title IV aid recipients who fail any of the above noted Satisfactory Academic Progress standards will be notified by e-mail within 1 week of the determination to advise they have been placed on Student Loan Denied Status, and given a specific date to submit their appeal (if applicable).
Reinstatement of Aid After Student Loan Denied Status.
Reinstatement of financial aid after you have been placed on Student Loan Denied status may be achieved in one of the following ways:
You attend Concordia University, pay for tuition and fees without the help of government financial aid, and do well enough in the course work to meet all the Satisfactory Academic Progress standards. You regain aid eligibility in a probationary status.
You must submit a written appeal in accordance with the appeal process. If the FAAO grants the appeal, you will then be placed on Student Loan Probation for ONE payment period. You must attain a minimum 2.0 GPA in that payment period to qualify for the second disbursement. The student's next academic evaluation will use the term GPA of the 1st payment period of the aid year. This evaluation will normally be done in September, December or May, after which time if your GPA is not above the 2.0 minimum or pace progression has not been attained, you will immediately be placed on US Federal Loan Suspension and become ineligible for any futher Title IV aid until all of the above noted minimum academic requirements have been met.
You may appeal your "Student Loan Denied Status" if it can be determined that an unusual or extraordinary situation affected your academic progress. An example of an unusual or extraordinary situation would be a death in the family or a serious illness.
Appeals must be:
- Submitted in writing to the FAAO's Manager or US Loan Advisor (by appointment ONLY) by the date specified in the Student Loan Denied notification letter.
- You must submit documentation that supports your unusual or extraordinary situation (i.e. death of a family member is supported by a death certificate). In addition, your statement must include a specific plan for your academic recovery.
Should you require additional information regarding this process please visit the Financial Aid and Awards Office for additional information.
As an eligible educational institution, Concordia University can only provide Canadian federal (T2202A) and provincial (RL-8) tax receipts. If you are filing taxes in the US, you can use the information on the T2202A, along with Concordia’s EIN (Employer Identification Number) 98-1422233. You will require this information in order to complete your US income tax returns.
Glossary of U.S. Loan terms
Award Year: The 12-month period during which you attend the University, and for which your aid has been awarded.
Capitalization: The process by which interest is added to the principal loan amount if you choose not to make interest payments while at the University or in forbearance. This process increases the amount that must be repaid and will make your monthly payment larger.
Cost of Attendance (COA): The total amount it will cost you to go to school. This amount includes tuition fees, living expenses, books, insurance, travel and transportation. The COA is determined by the FAAO, using US guidelines.
Default: The failure of a borrower to repay the loan under the terms of the promissory note. If your repayment instalments are monthly, you are considered in default if you do not pay for 270 consecutive days. If your instalments are less frequent, default is declared after 330 consecutive days of non-payment.
Deferment: The temporary postponement of loan payments; during this time, you do not have to pay either principal or interest.
Delinquency: The status of a loan when payment is late. Delinquency can lead to default.
Disbursement: The lender's payment of loan funds to the University. Payment is made by cheque. Disbursement is usually made in two or more instalments during the year in accordance with US Department of Education regulations.
Expected Family Contribution (EFC): The amount that you and family are expected to contribute toward the Cost of Attendance. This amount is based on your or your family's income and assets.
Free Application for Federal Student Aid (FAFSA): The application that you must file to apply for financial aid. The FAFSA is printed and distributed free of charge by the U.S. Department of Education. It is also available online at www.fafsa.ed.gov.
Forbearance: The temporary postponement or reduction of payments because of the borrower's financial difficulties. Forbearance may also be an extension of the repayment period. You are charged interest during forbearance.
Full-time: Enrolment in twelve or more credits per semester.
Grace Period: A period of time between when you graduate or drop below half-time status and when repayment begins. For Stafford Loans, the grace period is six-months. There is no grace period for PLUS Loans. If you re-enter school at least half-time during your grace period, the grace period is renewed for another six months. Therefore, you have the full grace period available when you leave school again. However, if you use all your grace period at once and re-enter school, you will not be eligible for another grace period.
Half-time: Enrolment in six or more credits per semester.
Interest: The fee that is charged by the lender in exchange for lending the money, the interest rate, usually expressed as a percentage of the loan amount, may stay the same for the term of the loan (fixed rate) or it may change periodically (variable rate). Interest rates for Stafford loans are fixed, whereas those of alternative loans may vary.
Master Promissory Note (MPN): A legally binding contract that you sign, thereby agreeing to repay the loan. It contains the loan terms and conditions, including how and when the loan must be repaid.
Principal: The total sum borrowed. This includes the original amount borrowed plus any interest that has been capitalized. Additional interest charges are based on this amount.
Student Aid Report (SAR): Report of the information you provided in the FAFSA. It contains your EFC.
Subsidized Loan: A loan made on the basis of financial need. The federal government pays the interest on these loans while you are enrolled at least half-time, during the grace period, or during authorized periods of deferment.
Unsubsidized Loan: A loan not based on financial need. You are responsible for paying all interest that accrues throughout the life of an unsubsidized loan. During in-school status, deferment, and forbearance periods, you may choose to pay the interest charged on the loan or allow the interest to be capitalized.