2009-2010 Loans

Note: To accept or decline all or part of any loan, go to my.calpoly.edu.

For more information about federal loan opportunities, please read the brochure at http://studentaid.ed.gov/students/attachments/siteresources/YourFederalStudentLoansApril2009.pdf

Loan Rights and Responsibilities

Federal Perkins Loan

Need-based loan with a fixed interest rate of 5%.
This loan requires a separate loan application promissory note.
No interest accrues while you are in school and for 9 months after you leave school, or cease to be enrolled at least half-time.
By filing the FAFSA, you are automatically considered for the Perkins Loan.

Federal Stafford Loan

The Federal Direct Loan (DL) program is one of the Federal Stafford Loan programs.
The direct type of loan was created by the federal government to help finance all or part of educational costs. The loans are certified by Cal Poly and funded directly by the US Department of Education.
The interest rate for new subsidized loans for undergraduate students is fixed at 5.6% and for graduate students is fixed at 6.8% (beginning July 1, 2009). The interest rate for new unsubsidized loans is fixed at 6.8%. Monthly repayments generally begin six months after the student is no longer enrolled at least half-time, graduates, or leaves school.
All students need to carefully consider potential debt before accepting loans. Contact the Financial Aid Office with any questions.

Stafford Direct Subsidized vs. Unsubsidized

There are two types of Stafford Direct loans: subsidized and unsubsidized.

Subsidized loans are based on financial need, the Expected Family Contribution (EFC), and the Cost of Attendance (COA) at Cal Poly. The federal government pays the interest on these loans while the student is in school and for the first 6-months after the student leaves school or drops below half-time enrollment. After this 6-month grace period, the student is required to make payments on the loan including interest.
Unsubsidized loans have no interest subsidy, and therefore they accrue interest while the student is in school and during the 6-month grace period. The student may pay the interest while in school or may choose to postpone interest payments. Any accrued interest will be added to the original loan amount (capitalization).

The Stafford Direct Loan Process

Accept the loan(s) on my.calpoly.edu. The US Department of Education will be the lender for your Direct Loan (DL).
All new Stafford Loan borrowers are required to complete Entrance Counseling before receiving their first loan disbursement. Complete Entrance Counseling as early as possible to avoid funding delays. The proof of completion form is for your records. Cal Poly electronically receives notification and will remove the requirement from your "To Do List".
The Financial Aid Office will certify the loan and transmit the information to the US Department of Education beginning in early July. If this is the first loan in the DL program (for Cal Poly students the 2009-10 loan will be your first loan in DL), complete a Master Promissory Note (MPN) beginning in July 2009 at: https://dlenote.ed.gov/empn/StudentLoanSelector.jsp. The MPN is not available to sign until the financial aid office transmits your loan information beginning in July. This is the contract between you (the borrower) and the lender (the Department of Education). Cal Poly encourages you to check your emails often.
Complete the MPN. Print or request a copy for your records.
When the DL program receives the promissory note (first time borrower), or certification from Cal Poly (continuing borrower) and you complete the loan entrance counseling, the loan funds will be electronically transmitted to the Cal Poly Student Accounts Office (usually no earlier than one week prior to the start of the term). Please note:
- Money in excess of total charges will be refunded when classes begin.
- All borrowers receive a disclosure statement when you sign your MPN; you are also sent an email at the time of disbursement to remind you of your right to cancel this loan.
The Direct Loan program will charge a 1.5% origination fee on each loan. There is also a rebate of 1% of the loan which will be given to you at the time of disbursement. This rebate is in anticipation that you will pay your loan on time. If you do not make your first 12 payments on time, you will be required to repay the rebate.
For more information on the Direct Stafford Loan program (both subsidized and unsubsidized loans), please read the Direct Loan student basics brochure at http://www.ed.gov/offices/OSFAP/DirectLoan/pubs/studentbasics.pdf
For a student in transition between an undergraduate and a graduate program, or if provisionally admitted, aid is subject to delay. When the undergraduate degree is awarded, notify the financial aid office.
Everyone who borrows a Stafford Loan must complete an Exit Interview online with the Student Accounts Office either the quarter before graduating, or otherwise withdrawing from school.
A complete listing of your rights and responsibilities as a Direct Loan borrower is available at: http://www.ed.gov/offices/OSFAP/DirectLoan/dlrights.pdf

Federal Direct PLUS Loan

The Federal Direct PLUS (Parent Loan for Undergraduate Students) helps parents of dependent students pay college expenses. Parents may borrow up to the Cost of Attendance (COA) minus any financial aid received by the student. At Cal Poly, the FAFSA must be completed for a parent to borrow through the program. The interest rate for new loans is fixed at 7.9%. There will be a 4% origination fee on this loan; however, a 1.5% rebate against future on time payments reduces the final origination fee to 2.5%. This fee will be taken from each disbursement of the loan. Payments on this loan begin immediately.
If you are interested in borrowing the PLUS, the PLUS award must be accepted on the student's financial aid awards. One parent must also complete the PLUS request form.
The Cal Poly financial aid office will transmit the credit check request beginning in July 2009. Once the PLUS is approved, the parent must sign the PLUS master promissory note at: https://dlenote.ed.gov.empn/completenew_plus.jsp
To qualify for a PLUS, a parent must be a U.S. citizen or an eligible non-citizen, have a valid Social Security number and a favorable credit history. Parents with an adverse credit history may still be able to borrow a PLUS loan with a co-signer.
Dependent students whose parents have been denied a PLUS loan may apply for an unsubsidized Stafford loan and should contact the Financial Aid Office.
For more information on the Direct PLUS program, please read the Direct Loan PLUS program basics brochure at http://www.ed.gov/offices/OSFAP/DirectLoan/pubs/parentbasics.pdf
A complete listing of your rights and responsibilities as a Direct PLUS borrower is available at: http://www.ed.gov/offices/OSFAP/DirectLoan/plusrights.pdf

Federal Direct GRAD PLUS Loan

A federally insured, credit based educational loan similar to the Federal Parent PLUS Loan program. The Grad PLUS Loan helps graduate students with loan assistance beyond the Federal Stafford subsidized and unsubsidized Loan program. Graduate students may borrow up to the Cost of Attendance (COA) minus financial aid received. The Grad PLUS Loan has an 7.9% fixed rate --a higher rate than Stafford Loans. Eligibility requires you to pass a financial credit review. It has more advantageous benefits than most alternative or private loan options. We encourage you to first use your annual Stafford Loan eligibility before borrowing through the Grad PLUS program. Contact the financial aid office and complete the Grad PLUS application at http://www.ess.calpoly.edu/_finaid/09_Awards/FGPL10-DirectGradPlusLoanApp.pdf if you wish to borrow through the Grad PLUS program.

For more information on the Direct Grad PLUS program, please read the brochure at http://www.ed.gov/offices/OSFAP/DirectLoan/pubs/gradbasics.pdf

Alternative Loans

Private lenders offer alternative educational loans. Alternative loans can fill the gap between what you receive from other financial aid sources and what you really need to cover the cost of your education. Alternative loans also assist borrowers who wish to acquire an educational loan, but do not qualify for federal loan programs or who need funds in addition to the federal loan programs. The interest rate and repayment provisions vary with each lender and will often change from year to year. Check with your preferred lender for current rates and application. You may view the list of lenders used by Cal Poly students during the last three years by clicking here or you may select your own lender. Cal Poly does not recommend any lenders and urges you to carefully review your financing options before using a private loan; we strongly urge you to apply for federal financial aid consideration by completing the Free Application for Federal Student Aid (FAFSA) before applying for a private loan. This application is available online at: http://www.fafsa.ed.gov/

Loan processing begins in August. Cal Poly encourages you to check your emails often.

Navigation

Main Menu