A loan is a form of financial aid that must be repaid, with interest. Few students can afford to pay for college without some form of eduction financing. In fact, two-thirds of undergraduate students graduate with some debt. Education loans come in three major categories: student loans, parent loans, and private or alternative loans. A fourth type, consolidation loans, allows the borrower to lump all of their loans into one loan for simplified payment.
Parents and students are encouraged to visit the following websites to learn more about the different types of loans available through Georgia Military College.
This is a federal student loan with an interest subsidy, to help meet the financial need according to the federal formula. As a direct lending school, loans are processed directly between the College and the federal lender.
This is a federal student loan with no interest subsidy. Demonstration of financial need is not required to receive this loan. As with the Subsidized Stafford Loan, loans are processed directly between the College and the federal lender.
PLUS stands for Parent Loan for Undergraduate Students. This is a federal loan that a creditworthy parent of a dependent student may borrow. It does not have an interest subsidy and repayment starts within 60 days after the loan is fully disbursed.
GENERAL LOAN REQUIREMENTS / REGULATIONS
- All students applying for a Federal Stafford loan and parents applying for a Federal PLUS loan must be U.S. citizens or eligible non-citizens.
- All students mus be enrolled half-time (or at least six hours per quarter for undergraduates to qualify for a Federal Stafford loan or to have their parents qualify for a Federal PLUS loan.
- Students must attend classes and maintain satisfactory academic progress to continue being eligible for loans.
- if students withdraw from classes before the end of the term, he/she must still repay their loans.
RIGHTS AND RESPONSIBILITIES
It is important that you understand your rights and responsibilities before borrowing a loan. By doing so, you will greatly diminish delays or problems you may otherwise encounter. Your rights and responsibilities include the following:
- You must pay back your loan(s) with accrued interest and any deducted fees.
- You are required to repay education loans even if you don't complete your education, if you are dissatisfied with your education, or if you are unable to get a job after you complete your education.
- You must repay your loan(s) within 10 years, unless your loans are consolidated.
- You may prepay all or part of your loan(s) without penalty.
- Your minimum monthly payment for a loan is $50, but may be more depending on the amount borrowed.
Your repayment will begin as follows:
- Subsidized Stafford Loan - following a six-month grace period. Unsubsidized Stafford Loan - following a six-month grace period, even though interest accrues while you're in school and can be paid or postponed until graduation.
- PLUS Loan - within 60 days of the last disbursement, unless a deferment has been approved.
- You are responsible for notifying your school and lender if you have received student loans from more than one lender.
- You must use money received from student loans for education-related expenses only. You can't use loan funds to buy a car.
- You will be notified, in writing, if any of your loans are transferred to a servicer or secondary market. You will direct all future correspondence to that organization.
You must notify your lender in writing of:
- Name or address change
- Failure to enroll at least half-time.
- Failure to enroll for the loan period certified.
- Withdrawal from school or redution of attendance to less than half-time.
- If you do not qualify for a deferment and are unable to make payments on a loan, you may request forbearance from the holder of your loan(s). Forbearance is a special benefit for borrowers experiencing financial hardship.
- You cannot have your student loan(s) discharged through bankruptcy.
- If you meet the eligibility requirements, you have a right to repayment deferments which suspend principal and interest payments for a specified period of time. Deferments can be requested for a number of reasons, including returning to school on at least a half time basis.
- You have a right to consider the loan repayment alternative for which you qualify as you enter the repayment process. This includes loan consolidation alternatives.
If you fail to repay your loan(s), you may be considered in default and the following may result:
- Your status may be reported to a national credit bureau resulting in a negative effect on your credit rating for seven years after the loan(s) are paid in full.
- The entire unpaid amount of your loan(s), including interest, may become due and payable immediately.
- Your federal and state income tax refunds may be withheld from you.
- Your wages may be garnished
- You may be ineligible to receive any future federal or state financial aid funds.
- In addition to the amount borrowed, you will be responsible for the collection costs incurred if your loan should default.
REPAYING YOUR LOAN
You are required to begin repaying your Federal Stafford loan six months after you graduate, leave school or drop below half-time attendance. Your parents are required to begin repaying PLUS loans 60 days after the loans are fully disbursed. In both cases, borrowers generally have 10 years to repay these loans. Under a level repayment plan your monthly payment would be at least $50.
Please Note: If you fail to repay your loan, you will be considered in default. If this occurs, your credit rating will be damaged and you may not be able to borrow in the future to pay for a car or home or even to continue your education. Your wages may be garnished and your federal and state income taxes may be withheld; your loan may be sent to a collection agency and you will be liable for collection fees.
ENTRANCE/EXIT LOAN COUNSELING
Entrance counseling must be completed before a student can receive a disbursement of Perkins or Stafford loan funds. Georgia Military College students may fulfill this federal requirement by clicking on https://studentloans.gov
Entrance counseling is designed to ensure that a potential borrower is educated and informed of loan processes, eligibility, and responsibility.
Exit counseling must be completed when a student who has received Stafford loans and either graduates or leaves Georgia Military College permanently. Georgia Military College students may fulfill this federal requirement by clicking on https://studentloans.gov
Our goal is to make sure you are ready to meet your repayment obligations successfully and to counsel you on your options.
Please see the 2016-2017 Direct Loan Information Handout.
ALTERNATIVE LOAN INFORMATION
An Alternative loan is an educational loan through a lender with no ties to the federal government or Georgia Military College that allows students to borrow additional funds after federal student loans have been exhausted.
There are many private lenders that offer alternative loans.
- The choice of which lender to borrow from is a decision that the student must make.
- The Office of Student Financial Aid will certify an alternative loan from any lender the student chooses.
- Students should always consider the Federal Loan Programs first.
We recommend that you conduct a search on the internet to identify alternative student loan lenders.
Alternative loan programs differ from Federal Direct Loans in several important ways.
- Interest rates are normally variable rates that change on a quarterly basis. Students are responsible for researching the terms and conditions of all loan programs.
- Loan and interest rates are based on credit approval and approval is not guaranteed.
- Georgia Military College is not involved in the credit decisions or denials for these loans. Questions are best addressed to the individual lender.
- Loans are not federally guaranteed; therefore, they do not have the same deferment, cancellation and consolidation benefits.
The entire alternative loan process can take up to six weeks.
- The amount a student may apply for is limited to their cost of attendance minus any other financial aid they are receiving.
- Students should review all lenders and determine which loan program best meets their needs.
- Please keep in mind that some alternative loan lenders require students be enrolled at least half-time or require that they meet reasonable academic progress.
- As you compare lenders, be sure to identify educational loan products.
- Not all lenders provide loans for students who are enrolled less than half-time, not in a degree seeking program or not making Satisfactory Academic Progress. You should select lenders who provide loans for students in your situation.
- After choosing a lender, a student should contact the lender directly to apply for the loan. Most lenders will have an on-line application process.
- While we encourage students to compare lenders, students should only apply with one lender.
- Lenders may require supporting income and employment documentation and/or co-signer.
- Once the lender has approved the loan, a certification request will be sent to Georgia Military College. It can take up to 14 business days from the date the certification request was received until the loan is actually certified.
- Once Georgia Military College receives the loan, the Financial Aid Office and Business Office will process the disbursement and issue a refund if one is due.
Private/Alternative Loan Self Certification Form: http://ifap.ed.gov/dpcletters/attachments/GEN1001A-AppSelfCert.pdf