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Financing a medical education is an expensive
proposition. The primary responsibility for meeting
your educational costs rests with you and/or your
family, but the Office of Student Affairs makes
every attempt to assist you financially. You will
undoubtedly rely on student loans to finance your
education. Approximately 85 percent of the student
body borrows some type of federal loan. |
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purpose of financial aid is to help students and
families meet educational expenses that cannot be
met through their own resources. Financial aid can
be either need-based or non-need-based. The results
of the Free Application for Federal Student Aid (FAFSA)
along with the cost-of-education will determine
whether or not a student has financial need. |
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| As a
student borrower of Federal financial aid, there is
vital information (including borrower rights and
responsibilities and student aid eligibility)
outlined in The Student Guide to Financial Aid
published by the U.S. Department of Education. You
can access The Student Guide on the internet at
http://studentaid.ed.gov/students/publications/student_guide/.
You are strongly encouraged to thoroughly read this
important document. |
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are several types of financial aid available. Grants
and scholarships are considered "gift aid" because
they generally do not have to be repaid. In medical
school gift aid is sometimes accompanied by service
requirements. Loans and employment are considered
"self-help aid" because loans have to be repaid and
by working you earn money for educational expenses.
Loans are by far the largest source of financial aid
for the majority of students and families. Most
grants, some loans (Subsidized Stafford and the
Perkins Loan), and Federal Work-Study are need-based
financial aid programs. The Unsubsidized Stafford
and private commercial loans are considered
non-need-based. |
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| See the
Financial Aid Basics Chart for basic
information about qualifying for the various aid
programs available at OU-COM. |
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Instructions
to Apply for Aid |
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| To
apply for financial aid at OU-COM follow the steps
listed on this
page. |
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Ideally, all of these
steps should be completed no later than March 1, of
each year (unless otherwise indicated) to ensure the
timely processing of your financial aid and
consideration for institutional scholarships and
loans. If you miss the priority deadline, please
submit your information as soon as possible. |
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Read through all the
information on this page to assure that you
understand the basics of financial aid before you
start the process. Then, if you have not already
done so, complete the FAFSA for the appropriate year and
send it into the central processing unit. (Remember
to use the OU-COM code: E00306 in the school section
– failure to use the correct code will delay your
aid.) |
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FAFSA |
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Each year, you must
complete the Free Application for Federal Student
Aid (FAFSA) or the Renewal FAFSA. You should file
your FAFSA by as early as possible (early march is
ideal)
to prevent your financial aid from being delayed. |
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To file a FAFSA or
renewal FAFSA on the web, you will need a Personal
Identification number (PIN) or Electronic Access
Code (EAC). PIN numbers were sent in December who
files a FAFSA last year. If you did not receive it,
or are filing for the first time, go to
http://www.pin.ed.gov/PINWebApp/pinindex.jsp to
request a new PIN or have your PIN re-mailed to you. |
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It is important that you
read the instructions before completing your FAFSA
because they should answer most of your questions.
If, after reading the instructions that accompany
the FAFSA, you need help completing your form, there
are several places you can receive assistance. You
can call 1-800-4-FED-AID (1-800-433-3243), or
contact the Student Affairs Office. |
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For your information,
Ohio University’s College of Osteopathic Medicine’s
Title IV School Code is E00306. This code
must be listed on the FAFSA section in order for
your information to be sent to the school. Failure
to use this code could greatly delay your aid. |
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FAFSA Results |
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The federal government
will process your Free Application for Federal
Student Aid (FAFSA) and electronically send the
results to the Office of Student Affairs provided
you listed us as one of the schools to receive the
results. You should receive a Student Aid Report
(SAR) via email shortly after the federal
processor receives your FAFSA. You should review the
SAR to see if any corrections are necessary. Make
any corrections by following the instructions on the
Student Aid Report. Otherwise, you can keep the SAR
for your records. |
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The data you put on your
FAFSA is put through a needs analysis formula called
the Federal Methodology. The output of this formula
is called the Expected Family Contribution (EFC).
The lower your EFC, the more financial need you will
have. |
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Deadlines |
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At Ohio University
College of Osteopathic Medicine (OU-COM), we must
have the results of your 2006-2007 FAFSA or Renewal
FAFSA by April 1 of each year for you to be considered
first-priority for federal campus-based aid and for OU-COM need-based scholarships. In order for the
college to receive the results of your FAFSA by our
first-priority deadline, we strongly recommend that
you file your FAFSA by March 1 of each year so that we will
have your data back in time for our April 1 deadline. This will
allow the federal government enough time to process
your FAFSA. If you cannot or do not file your FAFSA
by our first-priority deadline, please file as soon
as you can to be considered for the Federal
Subsidized and Unsubsidized Stafford Loans. |
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Keep copies of all (both
student and parent) federal income tax returns. It
is possible that the College of Osteopathic Medicine
Student Affairs Office may need signed copies of
your tax returns along with other information to
complete a process called verification. It is your
responsibility to be sure that the information you
reported on the FAFSA is correct. If you filed your
FAFSA using estimated financial information and
corrections are necessary, please make the needed
changes when you receive your paper SAR and return
to Central Processing Unit for re-processing. |
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Circumstances |
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Although the process of
determining a student’s eligibility for financial
aid is basically the same for all students, an
adjustment sometimes can be made if a student has
special circumstances. Special circumstances may
include (1) a reduction in income due to loss of
employment, death or disability of a wage earner,
divorce or separation, loss of social security
benefits, etc. (2) exceptional documented expenses
about the educational budget such as child care,
student medical bills not covered by insurance, or
excessive automobile repair expenses. |
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Ohio University College
of Osteopathic Medicine’s Student Affairs Office has
an Appeal for Change in Educational Budget and a
Change of Income Request Form, which should be used
when the special circumstances involve a loss of
income or additional allowable expenses. |
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If you think you have
special circumstances that you want to discuss with
a financial aid administrator, please feel free to
contact the College of Osteopathic Medicine’s Office
of Student Affairs. |
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Verification |
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Some students will have
their FAFSAs selected for a process called
verification. This means that the Office of Student
Affairs must determine the accuracy of the data they
reported on their FAFSA. |
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If your FAFSA is
selected for verification by either the federal
government or the Office of Student Affairs at
OU-COM, we will notify you and tell you exactly what
documents we need from you. |
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Financial Need and Eligibility
for Aid |
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Your Expected Family
Contribution, i.e., the result of your FAFSA,
subtracted from your Cost-of-Attendance equals your
financial need. |
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Cost-of-Education
minus Expected Family Contribution =
Financial Need |
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How much financial need
you demonstrate will determine for which programs
you qualify. Even if you have no financial need, you
will still qualify for the Unsubsidized Stafford or
a commercial loan pending a satisfactory credit
history. |
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Satisfactory Academic Progress
for Financial Aid |
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In order to receive
financial aid, you must make Satisfactory Academic
Progress (SAP) for financial aid purposes as defined
by the Ohio University College of Osteopathic
Medicine Student Affairs Office. Our definition of
SAP is different from the University’s and the
College’s definition of being in good standing. |
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Federal law and
regulations require that all students receiving
financial assistance from federal Title IV and Title
VII funds maintain satisfactory academic progress.
The following policy presents the standards adopted
by OU-COM and are based on the academic standards
established through the College’s Committee on
Student Progress Guidelines. They are subject to
change based on changing requirements of the
Guidelines. The policy follows:
The academic
requirements for the D.O. degree include the
satisfactory completion of the curriculum
designated by the faculty. The progress of each
student working toward the D.O. degree is
monitored carefully on a quarterly basis by the
Student Affairs Office. This progress is
measured by successful completion of coursework,
and the amount of time spent in the curriculum.
The Committee on Student Progress routinely
reviews, on a quarterly basis, those students
that the Student Affairs Office identifies as
not satisfactorily completing all course
requirements or not meeting the standards
established by the Committee on Student Progress
Guidelines. A student who does not
satisfactorily complete all course requirements
may be permitted to remediate in accordance with
the CSP Guidelines. As part of remediation, if a
student is assigned a schedule that deviates
from the norm and is making satisfactory
progress as determined by the Committee, the
student will be eligible for financial aid. A
student approved to repeat course work is
meeting the school’s standards for satisfactory
academic progress.
The normal time
frame for completion of required course work for
the D.O. degree is four academic years, but
through repeating the academic year or
fellowships, dual degrees, and an extended
program for personal reasons), a maximum of six
years is permitted as established by the CSP
guidelines. This maximum can be appealed through
the CSP for exceptional circumstances. To
satisfy academic progress, the student must
complete the program as defined by the group
responsible for the student’s program, such as
the Fellowship advisor and as defined by the
Committee on Student Progress Guidelines. A
student may be granted a leave of absence for a
variety of reasons. The period of time for which
the student has been approved leave shall be
excluded from the maximum time frame in which an
individual student will be expected to complete
the program. Medical students who are accepted
for transfer from another medical school will be
evaluated with respect to levels of academic
progress attained, and a determination will be
made as to remaining years of financial aid
eligibility. This determination will be made by
the Director of Student Affairs.
A student who
fails to meet one or more of the standards of
progress, shall be placed on financial aid
probation. The student, while on probation, may
receive student financial aid for one enrollment
period. At the conclusion of this period, the
student must have made progress toward
compliance with each standard or be suspended
from financial aid eligibility.
The Office of
Student Affairs must notify a student of
implementation of financial aid probationary
status and suspension. The school is ready to
respond to mitigating circumstances that may
arise in individual situations. Students may
appeal loss of eligibility for financial aid to
the Director of Student Affairs.
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Policy for Refusing to
Certify a Student Loan Application |
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Legislative Authority:
An institution may
refuse to certify a statement which permits a
student to receive a Federal Family Education Loan
or to certify a loan amount that exceeds a student's
financial need (as determined by the FAFSA). The
reason for such action must be documented and
provided in written form to the student. This
authority was reiterated in the Reauthorization of
the Higher Education Act signed by President Clinton
in October, 1998.
Policy:
The OU-COM Financial
Aid Office will refuse to certify a Federal
Stafford, PLUS or Title VII loan application for a
student if any of the following conditions applies:
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There is reason
to believe that the student does not plan to
enroll for some/any of the quarters in the
student’s loan period,
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The Office of
Student Financial Aid that the student’s
enrollment is in question.
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The student’s
borrowing patterns and amounts indicate
borrowing for reasons other than allowable
educational expenditures,
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Other documented
reasons which support the reduction or
denial of a student’s loan application.
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The student is
suspected of fraud. In addition to refusing
to certify a loan the student who attempts
to obtain financial aid by fraud will be
ineligible to receive federal financial aid
for unsatisfactory conduct. The college may
report such instances to local law
enforcement agencies, to the Ohio Attorney
General and to the Federal Government.
Restitution of any financial aid received in
such manner will be required.
Procedure:
Upon determining that
the student meets one of the above conditions, the
student will receive a letter informing him/her that
his/her loan application will either not be
certified or certified for a lesser amount than
requested with an explanation of the reason(s).
Appeal
Procedure:
A student may appeal
the decision to refuse to certify his/her loan
application by sending a letter of appeal to the
Coordinator of Financial Aid. The appeal will be
reviewed within ten (10) business days of receiving
the appeal. The student will be notified by the
student of his/her decision within 15 business days
of receiving the appeal.
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Overawards |
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According to federal
law, a student can not receive aid that exceeds the
student’s financial need nor can the student receive
aid that exceeds the student’s cost-of-attendance.
When an overaward exists, the student’s aid must be
reduced. The College of Osteopathic Medicine’s
Student Affairs Office will reduce interest accruing
aid before reducing low interest loans or gift aid
when possible. |
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Borrower's Rights and
Responsibilities |
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There are two types of
Federal Stafford Loans: Subsidized and Unsubsidized.
The Subsidized Federal Stafford Loan is based on
need. If you qualify the government pays the lender
the interest due on your subsidized loans while you
are in school and during grace and deferment periods
("lender" refers to the original lender and its
successors, including any subsequent holder of your
loan). You are otherwise responsible for interest
that accrues on your subsidized loan. The
Unsubsidized Federal Stafford Loan is not based on
need. You are responsible for all interest that
accrues on your unsubsidized loans. |
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Maximum Program Loan Amounts |
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Under the Federal
Stafford Loan Program (including both subsidized and
unsubsidized loans) you may borrow amounts up to --
but no more than -- the dollar amounts shown in the
chart on this page (Maximum Annual Stafford Loan
Amounts). You are subject to the limits on these
loan amounts on the basis of the following:
- Your academic
level
- Your status as
an independent student
- The length of
the academic program in which you are enrolled
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Federal Stafford Loan Maximums |
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Subsidized |
Total
(subsidized and unsubsidized) * |
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and Professional Students |
$65,000 |
The loan maximum for OU-COM students is
$189,125 minus any aggregate Subsidized
Stafford |
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* If the borrower does
not have financial need for a subsidized Stafford
loan using expected family contribution (EFC), or
has reached the aggregate limit in subsidized
Stafford loans, the borrower may receive up to this
entire amount in unsubsidized Stafford loans
assuming remaining eligibility for the loan. |
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Maximum Individual Loan Limits |
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For each academic
period, the College determines the maximum loan
amount you are eligible to receive by considering
the above factors and your Cost of Attendance,
Expected Family Contribution, and other financial
aid awarded to you. The College will determine first
your eligibility for a Subsidized Stafford Loan, and
then for an Unsubsidized Stafford Loan. |
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If you have received
student loans from more than one lender or from
other student loan programs, you are responsible for
informing your school and your lender of your other
student loans. In some cases, you may not be
eligible for loans for which you have applied. |
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Use of Loan Money |
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You must use the loan
money for authorized educational expenses for
attendance at the school that certified your
eligibility, for the time period shown on your
disclosure statement. Authorized expenses include
the following:
- Tuition
- Room
- Board
- Institutional
fees
- Books
- Supplies
- Equipment
- Dependent child
care
- Transportation
- Commuting
expenses
- Origination fee
and guarantee fee and/or
- Other
documented, authorized costs
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Disbursement of Loan Money |
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Federal regulations
require that Stafford Loan aid be disbursed evenly
over the number of payment periods for which the
student is enrolled (in this case, quarters). Year 1
& 2 OUCOM students attend 3 quarters per academic
year and Year 3 & 4 OUCOM students attend 4 quarters
per academic year. Each student's total Stafford
loan balances will be divided by the number of
quarters they attend OUCOM. Aid is disbursed via
electronic funds transfer (EFT) to the student's
account at the bursar's office the Friday before the
start of each quarter. Disbursement dates will
be listed on your Financial Aid Award Letter. |
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Students can refer to
their Financial Aid Award letters for an exact
listing of their Stafford Loan Disbursement dates. |
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If this is your first
student loan under the Federal Family Education Loan
(FFEL) Program, you must receive entrance counseling
before the first disbursement of your subsidized or
unsubsidized Federal Stafford Loan can be made. |
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Loan money will be
applied directly to your OU student account in the
bursar's office a few days prior to the start of
each quarter. We expect that your overage amounts
will be processed by the bursar's office and
delivered to you near the end of the first week of
classes. We strongly suggest that you sign up to
have your overage amounts sent by direct deposit to
your personal bank account. This will ensure that
you receive your overage money more quickly than if
it were to be mailed to you by paper check. Visit
the
Office of the Bursar to sign up for Direct
Deposit. |
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Change of Status |
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You must notify OU-COM
and/or lender of certain changes. |
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You must notify the
Office of Student Affairs if any of the following
events occurs:
- You reduce your
enrollment status to less than half time
- You withdraw
from school
- You stop
attending classes
- You fail to
re-enroll for any term
- You have a
change on your expected graduation date and/or
- You change your
name, local address, permanent address, or
e-mail address
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Shortly before your
enrollment ends, you must participate in exit
counseling with your school, during which you will
update your loan records about your:
- Permanent
address
- E-mail address
- Telephone number
- Future employer
- References
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You must notify the
lender if you fail to enroll:
- At least half
time for the loan period certified
- At the school
that certified your eligibility
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You must promptly notify
your lender(s) if any of the following events occur
before loans held by your lenders are repaid:
- You change your
address or telephone number
- You change your
name (for example, maiden name to married name)
- You withdraw
from school or begin attending less than half
time
- You transfer
from one school to another school
- You change your
employer or your employer's address or telephone
number changes and/or
- You have any
other change in status that would affect your
loan (for example, the loss of eligibility for
an unemployment deferment by obtaining a job)
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Effect of Loans on Other Student
Aid |
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Federal law requires
that, because an unsubsidized loan is more expensive
to borrow than a subsidized loan, the College must
determine your subsidized loan eligibility before
you are offered an unsubsidized loan. |
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Grace period |
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You will receive a
6-month grace period before the first payment of
your Federal Stafford Loan must be made. The grace
period begins the day after you graduate or the day
after you cease to be enrolled
at least half time at an eligible school. |
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Repayment of Your Stafford Loans |
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All of your loans must
be repaid. You may be charged an origination and a
guarantee fee for such a loan. The amount of these
fees will be deducted proportionally from each
disbursement. |
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The repayment period for
your loans begins the day after your six-month grace
period ends. Your first payment will be due within
45 days after your grace period ends. Your lender
will notify you of the date your first payment is
due. |
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The repayment period for
your loans begins the day after your six-month grace
period ends. Your first payment will be due within
45 days after your grace period ends. Your lender
will notify you of the date your first payment is
due. |
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Your principal repayment
period for each loan may not exceed 10 years from
the day after the grace period ends except when you
consolidate your loans. |
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You will be given the
opportunity to choose one of the following loan
repayment plans (for the following repayment plans,
the time limits shown do not include periods of
deferment and forbearance):
- Standard
Repayment Plan -- If you choose this plan,
you will make fixed monthly payments and repay
your loan in full within 10 years from the date
the loan entered repayment. Payments must be at
least $50 a month and will be more, if
necessary, to repay the loans within the
required time period. The number or amount of
payments may need to be adjusted to reflect
annual changes in the variable interest rate.
- Graduated
Repayment Plan -- If you choose this plan,
you will usually make lower monthly payments at
first, and your payments will increase over
time. No single payment will be more than three
times greater than any other payment. The number
or amount of the payments may need to be
adjusted to reflect annual changes in the
variable interest rate.
- Extended
Repayment Plan -- If you choose this plan,
you will make monthly payments based on fixed
annual or graduated repayment amounts over a
period of 25 years or less. Payments must be at
least $50 a month and will be more, if
necessary, to repay the loan within the required
time period. The amount of payments may need to
be adjusted to reflect annual changes in the
variable interest rate. If at the time you sign
this Note, you do not have an outstanding
balance on a FFELP loan made before October 7,
1998, you are only eligible for this plan if you
accumulate outstanding FFELP loans exceeding
$30,000.
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Income-Sensitive Repayment Plan -- If you
choose this plan, your monthly payments will be
adjusted annually, based on your expected total
monthly gross income from all sources.
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These repayment plans
will be explained in more detail during your exit
counseling session. If you do not choose an
income-sensitive, extended repayment plan, or a
graduated repayment schedule within 45 days after
notification of your repayment choices or if you
choose an income-sensitive repayment schedule but do
not provide the required documentation within the
lender-specified time frame, your lender will
require that you repay the loan under a standard
repayment plan. |
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There will be no penalty
for prepaying any portion of your loans. |
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All payments and
prepayments will be applied in the following order:
Late charges, fees, and collection costs first,
outstanding interest second, and outstanding
principal last. |
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If you fail to make any
part of an installment payment within 15 days after
it comes due, you may owe a late charge. |
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Interest Rates |
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For Stafford Loans first
disbursed between July 1, 1998 and June 30, 2006, the interest
rate will be a variable rate, adjusted annually on
July 1, not to exceed 8.25%. The interest rate
formula and the actual interest rate applicable to
each of your loans will be disclosed to you. After
reviewing the actual interest rate, you may cancel
or reduce this loan in accordance with the "Loan
Cancellation" section.
For all Stafford Loans
disbursed on or after July 1, 2006 the interest rate
is a fixed 6.8%. |
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Payment of Interest |
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Your lender may, during
the in-school and grace periods for your loans,
defer and align principal payments on your
outstanding Stafford Loans. Interest that accrues on
all your Unsubsidized Stafford Loans during periods
when you are not making regularly scheduled payments
may be capitalized (added to the principal of your
loans) -- unless you pay the interest as it accrues. |
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Except for interest
charges the federal government pays on your behalf
for subsidized Federal Stafford Loans (while you are
in school at least half time, during the grace
period after you leave school, or during any period
of authorized deferment), it is your responsibility
to pay interest on the principal amount of your
loans from the date of disbursement until the loans
are paid in full. For all other periods and for
Unsubsidized Stafford loans, it is your
responsibility to pay interest on your loans. |
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If you inform your
lender that you wish to pay interest as it accrues,
but you do not submit the payments, your lender may
capitalize that interest. |
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Capitalized interest
increases the principal balance of your loans and
the total amount of interest costs you incur.
Generally, capitalization may occur no more
frequently than quarterly, except that
capitalization may also occur when your loans enter
or resume repayment. The amount and frequency of
interest payments will be established by your
lender. (See the chart below entitled,
"Capitalization of Federal Stafford Loan Interest,"
for further information on capitalization.) |
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The Loan Repayment Chart
allows you to estimate this cost and estimate the
effect of capitalization on your monthly payments.
If necessary, you must add two or more estimates of
your payments together to approximate more closely
the total monthly payment. |
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Loan Cancellation |
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Understand that the
terms of a full or partial loan cancellation depend
on when you request the cancellation. |
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At any time before your
loan money is disbursed, you may decline all or part
of your loan money by notifying your school or
lender. No origination fee, guarantee fee or
interest will be charged on the amount of the loan
that is cancelled.
- When Ohio
University credits your loan to your student
account, you may cancel all or part of your loan
by informing your school within 14 days after
the date your school sends you a disbursement
notice, or by the first day of the school's
payment period, whichever is later. (OU can tell
you the first day of the payment period). If you
cancel all or a portion of your loan as
described in this paragraph, OU will return to
your lender the cancelled amount of the loan
money and the loan fees will be reduced or
eliminated in proportion to the amount returned.
- At any time
within 120 days of disbursement, you may pay
back all or part of your loan. The loan fees
will be reduced or eliminated in proportion to
the amount returned.
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Sale or Transfer of Loans |
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The lender may sell or
otherwise transfer one of all of your loans without
your consent. Should ownership of a loan be
transferred, you will be notified of the name,
address and telephone number of the new lender if
the address to which you make your payments changes.
Sale or transfer of your loans does not affect your
rights and responsibilities under such loans. |
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Loan Discharge |
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Documentation of your
death or total and permanent disability results in
loan discharge. A complete application for loan
discharge must be submitted to your lender, and
documentation verifying the total and permanent
disability must be certified by your doctor. Your
lender may not approve a request for discharge on
the basis of total and permanent disability for a
condition that existed at the time that you applied
for this loan unless your doctor certifies that the
condition substantially deteriorated after the loan
was made. |
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Your loan will not
automatically be discharged in bankruptcy. |
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In certain cases, the
Act provides for loan discharge for borrowers who
are unable to complete a course of study because the
institution closes, or borrowers whose loan
eligibility was falsely certified by the
institution. |
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Neither the lender, the
guarantor, nor the Department of Education vouch for
the equality or suitability of the academic programs
offered by this school or any other school. Unless
you qualify for loan discharge under the Act, you
must repay the loans even if you do not complete
your education, you are unable to obtain employment
in your field of study, or you are dissatisfied
with, or do not receive, the education you paid for
with the loans. |
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Consequences of Default |
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Default is defined in
detail in your loan promissory Note. If you default,
the entire unpaid balance and collection fees on the
applicable loans will become immediately due and
payable. Failure to repay loans made may result in
any or all of the following
- Loss of federal
and state income tax refunds
- Loss of other
federal or state payments
- Legal action
against you
- Collection
charges (including attorney fees) being assessed
against you
- Loss of your
professional license
- An increase in
your interest rate
- Loss of
eligibility for other student aid and assistance
under most federal benefit programs
- Loss of
eligibility for loan deferments
- Negative credit
reports to credit bureaus and/or
- Your employer
withholding part of my wages to give them to
your guarantor (administrative wage garnishment)
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Credit Bureau Notification |
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Information concerning
the amount, disbursement, and repayment status
(current or delinquent) of loans will be reported to
one or more national credit bureau organizations on
a regular basis. If you default on any loans made
under this Note, that default also will be reported
to national credit bureaus. Before any guaranty
agency reports such a default, it will give you at
least 30 days notice that default information will
be disclosed to a credit bureau unless you enter
into repayment arrangements within 30 days of the
date on the notice. The guarantor will give you a
chance to ask for a review of the debt(s) before the
default is reported. Your lender and guarantor must
provide a timely response to a request from any
credit organization regarding objections you might
raise with that organization about the accuracy and
completeness of information reported by the lender
or guarantor. |
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Special Repayment Arrangements |
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- At graduation a Federal Consolidation Loan Program is
available under which you may consolidate into one debt
federal education loans received from different
lenders and/or under different education loan
programs. Depending on the amount you borrow,
this program may provide or an extension of the
normal 10-year repayment period. Consolidation
permits multiple debts to be combined into one
monthly payment. For additional information, you
should contact your lender or guarantor.
- Under certain circumstances, military
personnel may have their loans repaid by the
Secretary of Defense in accordance with 10 U.S.C.
2141. Questions should be addressed to the local
service recruiter. This is a recruiting program
and does not pertain to prior service
individuals or those not eligible for enlistment
in the Armed Forces. You are responsible for any
payments due on your loans even though you may
qualify for military repayment programs.
- In addition, volunteers who complete service
in an approved national or community service
project can earn an educational award. The award
can be used to repay a Federal Stafford Loan. If
you receive an educational award, you are
responsible for providing your lender with
information and documentation regarding your
term of service and the award.
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Deferments |
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Under certain
circumstances, you have a right to postpone
repayment if you provide your lender with a request
for a deferment together with evidence that verifies
your eligibility. The types of deferments that are
available to you depend on when you first obtained
an FFELP loan. Upon request, your lender will
provide you with a deferment application that
explains the eligibility requirements. If you are in
default on your loan(s), you are not eligible for a
deferment. |
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If at the time you sign
your promissory Note you have no outstanding balance
on a FFELP loan made before July 1, 1993, the
following deferments are available where you are:
- Enrolled at
least half time at an eligible school
- Engaged in a
full-time course of study in a graduate
fellowship program
- Engaged in a
full-time rehabilitation training program for
individuals with disabilities (if the program is
approved by the Department of Education)
- Conscientiously
seeking, but unable to find, full-time
employment (for up to three years)
- Experiencing an
economic hardship as determined by federal law
(for up to three years)
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If at the time you sign
your promissory Note, you have a FFELP loan
disbursed before July 1, 1993, information on
additional deferment opportunities can be found in
your earlier promissory note materials. |
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Forbearance |
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If you are unable to
make your scheduled loan payments, the lender may
allow you to reduce your payment amount, to extend
the time for making payments, or to temporarily stop
making payments as long as you intend to repay your
loan. Allowing you to temporarily delay or reduce
loan payments is called a forbearance. Interest
charges continue to accrue during a forbearance
period. |
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The lender may grant you
a forbearance in the following circumstances:
- financial
hardship and/or
- illness
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Your lender is generally
not required to grant a forbearance and may require
you to provide your reasons for the request and
other information. The lender may grant you a
forbearance to eliminate a delinquency that persists
even though you are making scheduled installment
payments. |
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Circumstances that
require your lender to grant you a forbearance
include:
- Serving in a
medical or dental internship or residency
program, if you meet certain criteria.
- Serving in a
national service position for which you receive
a national service education award under the
National and community Service Trust Act of
1993. In some cases, the interest that accrues
on a qualified loan during the service period
will be paid by the Corporation for National and
Community Service.
- Qualifying for
partial repayment of your loans under the
Student Loan Repayment Program, administered by
the Department of Defense.
- Having a monthly
debt burden for Title IV loans that collectively
equals or exceeds 20% of your total monthly
gross income (for up to three years).
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Upon request, your
lender will provide you with forbearance information
and a forbearance request form. |
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What is capitalization? |
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Capitalization is a
process whereby a lender adds unpaid interest to the
principal balance of a loan. You are responsible for
paying the interest due on your loan as described in
Item 3 of this Rights and Responsibilities
statement. |
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If you fail to make
required interest payments before the beginning or
resumption of principal repayment, or if you are
granted a deferment (on an unsubsidized Stafford
Loan) or forbearance, your lender may capitalize
such interest. The principal balance of your loan
will increase each time your lender capitalizes
unpaid interest. As a result, you will pay more
interest charges over the life of the loan. When you
leave school and begin repaying your loan, your
monthly payment amount will be higher or, if your
loan is subject to the $50 minimum payment, you will
make more payments. |
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Contact your lender if
you have questions or need more information. |
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This chart compares the
monthly payments on Unsubsidized Stafford Loans
where interest is paid while the borrower is in
school and loans where the interest is capitalized.
This example uses the maximum interest for Stafford
loans, 8.25%. This is an estimate only. The actual
interest capitalized will depend on disbursement
date, number of disbursements, the variable interest
rate, and the frequency of capitalization. |
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Treatment
of Interest |
Loan Amount |
Capitalized
Interest for 12 months |
Principal
to be Repaid |
Monthly
Payment |
Number of
Payments |
Total
Amount Repaid |
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When you
pay the interest |
$15,000 |
$ 0 |
$15,000 |
$184 |
120 |
$22,077 |
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When you
don't pay the interest |
$15,000 |
$1,350 |
$16,350 |
$201 |
120 |
$24,069 |
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Result: During
repayment, you pay $17 less per month and $1,987
less over the lifetime of your loan(s) when you pay
the interest as it is charged. |
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