The Stafford Loan program is a federally-funded loan program available to students who need additional resources to pay for educationally related expenses. This loan program should be considered only as a last resort after all other options have been considered.  All students interested in a federal student loan must apply using the loan process through CR.

Federal Stafford Loan Process 2009-2010

College of the Redwoods is dedicated to student success.  A few students need to borrow money to help with school related expenses.  Typically, a student who needs to borrow money to get through school is making a good investment for the future.  However, many students enter into debt without a clear picture of how it will affect them in the future.  We hope that the following information will assist you with borrowing responsibly. 

In order to avoid any delay in the processing of your loan, you must use the CR process as described below.

What is the Federal Family Education Loan Program (FFELP)?

Federal Stafford Subsidized and Unsubsidized Loans are federally-sponsored long-term loans offered under the FFELP.  Subsidized loans are long-term and awarded to students based on financial need; interest is paid by the government while the borrower is enrolled in college at least half-time.  Interest on Unsubsidized loans is the borrower’s responsibility.  The borrower will be charged interest and can either pay the interest while in school or defer the interest, which will be added to the outstanding principal.  Students are strongly encouraged to borrow only subsidized loans for this reason when possible.

Student borrowers must be enrolled at least half-time (6 units) to be eligible to receive these loans and meet all other federal eligibility requirements.

What do I need to do to apply for a student loan?

• Complete the 2009-2010 Free Application for Federal Student Aid (FAFSA); list the CR code number:  001185 in Step 6 and submit additional paperwork requested by the Financial Aid Office.  We recommend you do not apply for a student loan until you receive your award letter so you know if you will need to take out a student loan.

• Apply for a Personal Identification Number (PIN) if you do not have one @ www.pin.ed.gov.

• Complete loan counseling.  Even if you have done it before; you must do it every year.
• Go to www.edfund.org and click on the EDTE$T loan counseling icon at the bottom.*
• Select the State: California
• Select the School: College of the Redwoods
• Select Enrollment Level: Undergraduate
• Click on the ENTRANCE EXAM icon
• Type in your Social Security Number and Date of Birth (this is a secure system)
• Once the Entrance Exam is completed; the results will be electronically submitted to us. 

*If you have any questions about the loan process that were not answered in entrance counseling, make an appointment to meet with a Financial Aid Specialist. 

• AFTER you have completed the steps above, carefully review this loan process information; complete the Loan Request Form and submit it to your campus Financial Aid Office.  If you are attending the fall semester only, the application deadline is November 6, 2009.  If you are attending both fall and spring or spring semester only, the deadline is April 7, 2010.  These are the last dates you can apply; the earlier you submit your application the earlier your eligibility can be determined.  This can take 6-8 weeks; longer if your file has not been processed.

Once the Financial Aid Office has determined your loan eligibility you may need to sign your Promissory Note. 

You will be contacted by your lender by email or by postal mail with instructions on completing a Master Promissory Note (MPN) if required.  If you are required to sign a promissory note and do not do so in a timely manner, your loan will NOT be processed.  Make sure you fully understand the terms of the promissory note before you sign; this is your promise to repay the loan!

What impact do my grades have on my loan eligibility?

• Student loans are funded by the federal government and are subject to the same academic progress and other eligibility requirements as all other types of federal financial aid.  You must maintain satisfactory academic progress each term in order to remain eligible.

How will my loan funds be disbursed?

• No loans will be disbursed prior to the beginning of classes.  Loan disbursements for first-time students will be delayed for 30 days after the beginning of classes, as required by Federal law.

• If you have an outstanding balance on your CR account (for tuition, housing, etc.), your loan funds will first be applied to your outstanding balance.  If funds are remaining, a check will be mailed to you.

•  All loans are disbursed in two payments (normally ½ each semester).

• You must be enrolled in 6 units and attending classes in order to receive your loan proceeds.  If you drop below 6 units, withdraw from all your classes, or are suspended for not meeting the Satisfactory Academic Progress requirements, you will not be eligible for any loan disbursement.

• If you are being paid retroactively for the prior term, you must have satisfactorily completed a minimum of 6 units to be eligible for the retroactive payment.

• The disbursement dates listed by your lender are only estimates.  Checks are mailed to eligible students on the next scheduled CR disbursement date after CR receives the loan funds from the lender. 

 Why do I have to do all this to get a student loan? 

• Taking out a loan is a big responsibility, and should not be taken lightly.  A student loan, like any other loan, is a debt that must be repaid, with interest.  You will owe this money back even if you withdraw without completing your degree or are unable to find work.  Think about the total amount that you will repay before taking out a loan.

• Federal student loans are intended to be supplemental to student and family resources, and are awarded based on financial need.

• This process is designed to help educate you about student loans and provide you with information so that you can make an informed decision.

• To make sure you apply for all ‘gift aid’ (grants, scholarships) FIRST which does not need to be repaid.

• The cost of attendance at CR is low (especially if you are a California resident) so we urge you to save your loan eligibility for transfer to four-year colleges and universities.  The cost of education is higher and you will most likely need to take out loans to cover your costs. There is a federal limit on how much you can borrow in student loans.  Be careful not to reach that limit before you are able to complete your educational goal.

• When you receive a student loan it becomes part of your credit history. Repaying your loan according to the agreed schedule may give you a head start when you apply for more credit in the future. If you become disabled or are experiencing economic hardship due to unemployment, be sure to contact your lender about loan deferment options. Before signing your promissory note, take time to estimate your monthly loan payments after graduation. 

•  If you were to become delinquent on a student loan your credit scores will be negatively impacted.  Defaulting on a student loan can have severe consequences beyond your credit score.  These include wage or federal benefits (i.e. social security) garnishment, tax refund being seized, or even being sued by the government and/or lenders.

How much money can I borrow?  Federal Stafford Loan Limits*

The following maximum amounts are allowed annually under the federal loan program.  Don’t just ask for the maximum amount, be sure to estimate your long term debt and do not ask for more than you need.  *How much you can borrow each year depends on your cost of attendance, other financial aid received, and grade level.  Your loan will be certified based on the amount of actual ‘need’ as defined by federal law, or the amount of your loan request, whichever is less. 

Do you know how much your total student loan debt is?  Check it out:  www.nslds.ed.gov. 

How do loans impact my eligibility for other types of financial aid?

Your financial aid awards (including loans) cannot exceed your cost of attendance (budget).  If additional resources are added after a loan has been approved, and prior to disbursement, your loan amount will be reduced to accommodate the new award(s), if necessary.  You may not be eligible for additional awards (including EOPS, scholarships, additional grants, etc.) if you have already received all loan disbursements.

How do I choose a lender?  Disclaimer:  Due to the current nature of the student loan market, lenders may choose to withdraw from participating in the federal loan program.  This list is based on the information currently available to us. We encourage you to research your lender options at the time of application.

Choosing a lender is an important decision.  It is your responsibility to ensure you are choosing the best lender for your situation.  We strongly encourage you to compare the benefits of each lender before deciding on the one that’s right for you.  You are not required to select a lender from our lender list.  We can not recommend or choose a lender for you.  CR students have used these lenders in recent years and they are listed in alphabetical order only. 

All Student Loans www.allstudentloan.org                      Bank of America www.bankofamerica.com        

Discover www.discoverstudentloans.com    Sallie Mae www.salliemae.com   Wachovia www.wachovia.com

Financial Literacy Information – Be a Wise Consumer                                                                                                       

•  Read the fine print.  Understand what you have agreed to.

• Understand consumer credit; check out your credit report:  www.annualcreditreport.com

•  Be a wise consumer – before spending ask yourself:
• Do I really need this or do I just want it?
• Will this purchase take me closer to my goals or further away?
• Is this a necessity?

•  A budget equals the mathematical confirmation of your financial situation.  Budgeting rules:
• Pay yourself first (SAVE)
• Track all expenditures
• When you run out of money – stop spending
• Put credit cards on ice (if you have a credit card pay it off every month)
• Balance your checkbook each week
• Set and save for long-term goals

•  Do some career/life planning
• What jobs are out there, what do they pay?  The Occupational Outlook Handbook is available in the Eureka Campus Career Center and online at www.bls.gov/OCO.
• How will your student loan payments compare to your expected earnings?

• Think about your future and your long-term debt.  There are online tools available to help you estimate your loan payments.  Check them out at:  www.edfund.org and www.finaid.org/calculators.                 

What else should I know about loans?

• All students must complete Loan Entrance Counseling, even if you have done so in a previous year, or at a prior college.  The loan counseling process provides in-depth information on your rights and responsibilities as a student loan borrower.

• All students must complete Loan Exit Counseling shortly before graduating or dropping below 6 units.  If you plan to drop below 6 units, either due to graduation, transfer or withdrawing from classes, you must complete the Exit Counseling requirement by going to www.edfund.org and completing the Exit Counseling test.

• CR does not endorse alternative loan programs.  These are private loans that do not have the borrower benefits that government funded loans provide.

• At any time before your loan money is disbursed you can decline all or part of your loan by notifying the CR Financial Aid Office.

• This is a loan intended to cover educational costs and must be repaid.    

 PLUS (Loan for Parents)

Federal PLUS loans are available to parents of undergraduate students. Loan limits vary with the cost of the student's educational program and the amount of other financial aid received. The interest rate is variable and a credit check is required.  Interested parents may request pre-approval by applying online through your chosen lender.

YOU MAY CHOOSE ANY LENDER.  The pre-approval process only determines if you will be eligible for the loan.  The PLUS award amount varies with cost of attendance and amount of other aid received. 

Students must have a completed FAFSA on file.