Important Announcement Regarding Federal Student Loans
The Biden administration announced on August 24, 2022, an extension of the pause on student loan repayments to December 31, 2022. In addition, the Biden-Harris Student Loan Debt Relief Plan was announced, a plan to cancel federal student loan debt from $10,000 to $20,000 per borrower if certain qualifications are met. The Department of Education will determine your eligibility for this relief.
Currently, The Office of Financial Aid has no further information beyond the statement from the Department of Education.
We suggest reviewing the updated information from the Department of Education.
Applying for Direct and Parent PLUS Loans
Federal Direct and Parent PLUS loans are financed by the United States Department of Education (your lender). While the Department of Education is your lender, the Dept assigns a Servicer to handle your loan servicing needs; for more information, go to StudentAid.ed.gov.
Direct Loans are:
- Simple - You have a single contact - the Direct Loan Servicing Center - for everything related to the repayment of your loans, even if you receive Direct Loans at different schools
- Convenient - You'll have online access to your Direct Loan account information 24/7 at Direct Loan Servicing Online at Federal Student Aid.
- Flexible - You can choose from several repayment plans that are designed to meet the needs of almost any borrower, and you can switch repayment plans if your needs change.
To qualify for a PLUS Loan, parents complete the application and the student must complete the current FAFSA. If approved, the parent must complete the PLUS Master Promissory Note. Please contact your financial aid specialist with any questions.
Complete your FAFSA on the Web and use the IRS Data Retrieval Tool (DRT) after October 1 as soon as possible (CMC school code: 004506). The priority date for applying for financial assistance for each academic year is March 31. An FSA ID will be issued to you before you begin the FAFSA; if you are a dependent, your parent will also receive an FSA ID.
Within 5 to 7 days the Department of Education will send to you a Student Aid Report (SAR), which includes your Expected Family Contribution (EFC). If you provide your email address, you’ll receive an email with a link to your online SAR.
Check with CMC by signing in to your Basecamp account to determine whether there is any missing information, or any other forms you need to complete.
The financial aid office will use the information received from the processing agent to construct your Financial Aid Package. This package will be explained in the Award Notification you receive via email to your CMC issued email address (go to Basecamp to access student email).
You must respond to the Award Notification immediately to notify CMC (through Basecamp) that you accept all, part, or none of the Financial Aid Package offered.
If scholarships and grants are not sufficient to cover your expenses, a loan may fill your remaining financial need. Depending on your other awards, you may be awarded a Federal Subsidized Loan, up to your estimated need. You may use Federal Unsubsidized or PLUS Loans for part or all of your Expected Family Contribution.
Complete Entrance Counseling All first time borrowers must complete an Entrance Counseling through the Department of Education. If you have previously borrowed at another school and this is your first semester at CMC, we recommend that you complete a new Entrance counseling with CMC's school code. This helps you to understand your responsibilities regarding your loan. Complete this counseling online at StudentLoans.gov.
Complete Annual Student Loan Acknowledgement While not required, CMC recommends that on a yearly basis you complete an Annual Student Loan Acknowledgement through the Department of Education. This will help you understand what loans you have taken out and how much more you are eligible to borrow.
Complete the Master Promissory Note (MPN) To take out a Direct Loan for the first time, you must complete a MASTER PROMISSORY NOTE (MPN). Complete the MPN on the StudentLoans.gov website. The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the Department. It also explains the terms and conditions of your loan(s). To complete an MPN online, you will be required to use your Department of Education-issued FSA ID. This is the same FSA ID that you used to complete your FAFSA. If you do not have a FSA ID, you may request one from the official site. A parent borrower must also request a FSA ID from the site to use when completing a PLUS MPN.
Go to Studentaid.gov for information on the interest rate, fees and repayment requirements for your Direct Loan and your Direct Parent Loan and to complete your Master Promissory Note and Entrance Counseling (for student loans only).
For some students, alternative loans provide that additional funding needed to meet educational costs. While federal student loans should always be offered to students first, there are times when students may either need to pursue alternative loans due to exhausting their federal loan eligibility or costs exceed what federal and/or other aid can cover. A good resource to learn more about private loans is available at: Studentaid.ed.gov/federal-vs-private.
Each lender sets their own requirements for Private Student Loans. We advise that the student contact their lender to confirm the requirements of their specific Private loan.
Be advised that you, the student, are responsible for any additional requirements set forth by the alternative/private loan company such as signing a promissory note to repay the loan or any other possible co-signer requirements.
Preferred Lender List
CMC does not offer or suggest any preferred lenders. We do however provide access to a general list of private loan options for students to research and select at their discretion. We encourage students to examine interest rates, any fees and if the lender allows for in-school deferment of repayment and for how long. These and other factors and help you select the loan that is best for you. For your convenience, a general list is provided at FINAID.org.
How the Loans Are Disbursed (Paid Out)
Generally, your loan will cover a full academic year and CMC will make at least two disbursements to you, for example, at the beginning of each semester (CMC always disburses single term (ie: semester) loans in two disbursements, the first depends upon borrower history (two weeks or 30 days into the semester), and the second at the mid-point of the term).
In most cases, CMC will disburse your loan money by crediting it to your school account to pay (tuition and fees, room and board, and other authorized charges). If the loan disbursement amount exceeds your school charges, CMC will pay you the remaining balance of the disbursement directly by check or other means.
Except for Direct PLUS Loan borrowers, if you haven’t previously received a Direct Loan, you must complete the CMC specific ENTRANCE COUNSELING before we can make the first disbursement of your loan. This helps you to understand your responsibilities regarding your loan.
NOTE: If you completed Entrance Counseling at a different school, CMC highly recommends that you complete it again using the CMC school code, 004506.
Student Loan Acknowledgement
While not required, CMC highly recommends completing the Annual Student Loan Acknowledgement on a yearly basis before accepting loans. This will give you an idea of how much you owe and how much more you can borrow.
The Master Promissory Note
To take out a Direct Loan for the first time, you must complete a MASTER PROMISSORY NOTE (MPN). Complete the MPN online. The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the Department of Education. It also explains the terms and conditions of your loan(s).
To complete an MPN online, you will be required to use your Department of Education-issued FSA ID. If you do not have an FSA ID, you may request one from the official site. A parent borrower must also request an FSA ID when completing a PLUS MPN. This is the same FSA ID that you used to complete your FAFSA.
In most cases, once you’ve submitted the MPN and it’s been accepted, you won’t have to fill out a new MPN for future loans you receive. You can borrow additional Direct Loans on a single MPN for up to 10 years. You should, however, ensure that you maintain this document in a safe location.
You’ll receive a disclosure statement from the Department that gives you specific information about any loan that CMC plans to disburse under your MPN, including the loan amount, fees, and the expected disbursement dates and amounts.
|Program Facts||Direct Subsidized||Direct Unsubsidized||Parent PLUS|
|Who can borrow?||Dependent and independent undergraduate||Dependent and independent undergraduate, graduate and professional students.||Credit-eligible parents of dependent undergraduate students.|
|Eligibility||Students attending school on at least a half-time basis. Students must demonstrate need by filing a Free Application for Federal Student Aid (FAFSA).||Students attending school on at least a half-time basis. Students do not need to demonstrate need; however, all students must first be considered for a subsidized loan. Completion of the FAFSA.||Dependent students attending school on at least a half-time basis. Completion of the FAFSA.|
|Loan Limits? (based on annual limits)||Year / Amount
1 / $3,500
|Year / Dependent / Independent
1 / $5,500 / $9,500
|A parent may borrow up to the cost of attendance, less financial aid received.|
|How do I calculate the amount I borrow?||Cost of Attendance
– Est. Financial Aid
– Est. Family Contribution
= Subsidized Direct Loan
|Cost of Attendance
– Est. Financial Aid (including subsidized Direct)
= Unsubsidized Stafford Loan
|Cost of Attendance
- Est. Financial Aid
= Federal PLUS Loan
|How is the interest paid while in school?||Interest is paid by the Federal Government while the eligible student remains in school at least half-time.||Interest is the student's responsibility while in school, from the first disbursement date to the start of repayment.||Interest is paid as part of the monthly repayment schedule.|
|What is the interest rate?||Fixed 4.99%
(after 7/1/22 and before 07/1/23)
(after 7/1/22 and before 07/1/23)
|Fixed 7.54% (after 7/1/22 and before 07/1/23)|
|When does repayment begin?||Six months after the student leaves school or drops below half-time status, whichever comes first.||Six months after the student leaves school or drops below half-time status, whichever comes first.||Within 60 days after the final loan disbursement.|
|Are there any fees?||Up to 1.057% of the total loan deducted proportionately from each disbursement. (after 10/1/20 and before 10/1/23)||Up to 1.057% of the total loan deducted proportionately from each disbursement. (after 10/1/20 and before 10/1/23)||Up to 4.228% of the total loan deducted proportionately from each disbursement. (after 10/1/20 and before 10/1/23)|
Caution: Some information may change as the US Department of Education continues to issue new regulations. Stay in contact with the Office of Financial Aid.
You are obligated to repay your loan even if:
You do not complete your educational program
You are not satisfied with the education or other services you purchased from a school
You cannot find employment (although you may apply to defer payment for a specified time).
When You Graduate or Leave School
Leaving School: Graduating, Withdrawing, or Dropping Below Half-Time
Once you are no longer enrolled at least half time in an eligible program, you’ll receive a 6-month grace period (see below) on your Direct Subsidized and Unsubsidized Loans during which you are not required to make loan payments. You must begin repayment at the end of your grace period.
Choosing a Repayment Plan
You’ll have the choice of several plans. Your Direct Loan Servicer will notify you of the date your first payment is due. If you do not choose a repayment plan, you will be placed on the Standard Repayment Plan. Most Direct Loan borrowers choose to stay with the Standard Repayment Plan, but there are other options for borrowers who may need more time to repay or who need to make lower payments at the beginning of the repayment period. See this informative video on repayment. You can visit Federal Student Aid / Manage Loans for more information regarding repayment.
When you graduate, drop below half-time, or withdraw from your academic program, you will receive a six-month grace period for your Direct Subsidized and Unsubsidized Loans. Your grace period begins the day after you stop attending school on at least a half-time basis. Once your grace period ends, you must begin repaying your loan(s).
If you re-enroll in school at least half time before the end of your 6-month grace period, you will receive the full 6-month grace period when you stop attending school or drop below half-time enrollment.
There is no grace period for Direct PLUS Loans—the repayment period for each Direct PLUS Loan you receive begins 60 days after your school makes the last disbursement of the loan. If you’re a parent PLUS borrower, you can defer repayment of Direct PLUS Loans first disbursed on or after July 1, 2008, while the student for whom you obtained the loan is enrolled at least half time, and for an additional 6 months after the student graduates or drops below half-time enrollment by contacting your loan servicer.
Remember, if you choose to defer payment on a Direct PLUS Loan, any interest that accumulates during the deferment period will be added to the unpaid principal amount of your loan. This is called “capitalization,” and it increases your debt because you’ll have to pay interest on this higher principal balance.
If you have an in-school deferment on a Direct Subsidized or Unsubsidized Loan that entered repayment at an earlier date before you returned to school and you graduate, drop below half-time enrollment, or withdraw from school, you will be required to immediately begin making payments on the loan because the 6-month grace period has already been used up; there is no second grace period.
Make sure that both your school and the Direct Loan Servicing Center know that you are no longer enrolled. If you don’t begin making payments when required, there is the possibility that you will lose repayment incentives you may have received or even go into default.
You must complete EXIT COUNSELING when you graduate, withdraw, or drop below 1/2 time enrollment. You can complete exit counseling online through the Department of Education. If you have additional questions about Exit Counseling see this helpful handout.
Reservists Called to Active Duty
If you are called or ordered to active duty for more than 30 days from a reserve component of the U.S. Armed Forces, the period of your active duty service and the time necessary for you to re-enroll in school after your active duty ends are not counted as part of your grace period. However, the total period that is excluded from your grace period may not exceed three years. If the call or order to active duty occurs while you are in school and requires you to drop below half-time enrollment, the start of your grace period will be delayed until after the end of the excluded period. If the call or order to active duty occurs during your grace period, you will receive a full 6-month grace period at the end of the excluded period.
If you are a reservist called to active duty with the U.S. Armed Forces for more than 30 days, contact your loan servicer. You may view your loan servicer by logging into the National Student Loan Service Center.
If you have multiple federal education loans, you can consolidate them into a single Direct Consolidation Loan. This may simplify repayment if you are currently making separate loan payments to different loan holders, as you’ll only have one monthly payment to make. There may be tradeoffs, however, so you’ll want to learn about the advantages and possible disadvantages of consolidation before you consolidate.
On April 6, 2022 the Department of Education announced their Fresh Start Initiative. This program is will allow students who have defaulted on their Federal student loans a path to help borrowers out of default. If eligible the Department of Education will begin reaching out to borrowers beginning in October 2022.
On August 24, 2022, President Biden announced that there will be targeted student loan forgiveness. Certain borrowers that received Federal Pell Grants and have Federal student loans can qualify for up to $20,000 in loan forgiveness. Other borrowers can receive up to $10,000 in loan forgiveness. At this time, we do not have additional information. Please see the Department of Education for current information.
From the Department of Education (https://studentaid.gov/debt-relief-announcement/):
How do I know if I am eligible for debt cancellation?
- To be eligible, your annual income must have fallen below $125,000 (for individuals) or $250,000 (for married couples or heads of households)
- If you received a Pell Grant in college and meet the income threshold, you will be eligible for up to $20,000 in debt cancellation.
- If you did not receive a Pell Grant in college and meet the income threshold, you will be eligible for up to $10,000 in debt cancellation.
What does the “up to” in “up to $20,000” or “up to $10,000” mean?
- Your relief is capped at the amount of your outstanding debt.
- For example: If you are eligible for $20,000 in debt relief, but have a balance of $15,000 remaining, you will only receive $15,000 in relief.
What do I need to do in order to receive loan forgiveness?
- Nearly 8 million borrowers may be eligible to receive relief automatically because relevant income data is already available to the U.S. Department of Education.
- If the U.S. Department of Education doesn't have your income data - or if you don't know if the U.S. Department of Education has your income data, the Administration will launch a simple application in the coming weeks.
- The application will be available before the pause on federal student loan repayments ends on December 31st.
- If you would like to be notified by the U.S. Department of Education when the application is open, please sign up at the Department of Education subscription page.