Loan Programs
Selecting Your Lender Guide: for Federal Stafford, Federal Graduate PLUS, Private and Bar Loans
Federal Perkins Loans
General Information
The Federal Perkins Loan is a low interest (5%) loan program administered by the financial aid office. Most funds for this program are supplied by former students who repay their loans. Therefore, it is considered a revolving loan fund. Priority for this program is given to the neediest students. Recipients must be U.S Citizens or permanent residents.
Award amounts vary based on need and available resources but generally do not exceed $2,000 per year. There are no origination or guarantee fees, and the federal government pays the accruing interest while students are in school and during the grace period. Repayment generally begins 9 months after a student ceases to be enrolled at least half-time. The standard repayment term is 10 years and the minimum monthly payment is usually $40.
Although New England School of Law is the holder of your loan, all billing and servicing of your loan will be coordinated through ACS Education Services. Before a loan can be credited to a student's account a promissory note must be signed. New England School of Law will retain a student's original promissory note until the loan is paid in full.
All Federal Perkins Loans are reported to a national credit bureau at the time of disbursement. Delinquencies and defaults during repayment are also reported to the credit bureau.
Federal Stafford Loans
General Information
The Federal Stafford Loan is a low interest loan available to students to help offset educational expenses. Most students will be eligible for a subsidized and/or unsubsidized Federal Stafford Loan. The interest rate on the Federal Stafford Loan is fixed at 6.8% for new loans disbursed for the academic year 2008-2009.
Students must demonstrate need as determined by federal formulas to qualify for the subsidized Stafford Loan. The maximum annual subsidized loan is $8,500. Students who are not eligible for the full amount of subsidized loan, or who need additional funding may apply for an unsubsidized loan. The maximum annual loan amount for an unsubsidized loan is $20,500 - less any subsidized loan amount. The maximum cumulative borrowing for the subsidized Stafford loan is $65,500. The maximum cumulative borrowing for the unsubsidized Stafford loan is $138,500 - including previous subsidized borrowing.
The provisions for the subsidized and unsubsidized Federal Stafford Loans are the same with the following exception. For a subsidized loan, you will not be charged interest until you begin repayment, which is usually six months after graduation. The interest is paid by the government. For the unsubsidized loan, the student is responsible for the interest payments while enrolled. However, most lenders offer the option to have the interest accrue and capitalized.
An origination fee of up to 1.5% and/or a guarantor default fee up to 1% may apply to your Stafford Loans.
Application Process
To apply for a Federal Stafford loan, you must complete a Federal Stafford Loan Processing Request Form, available in the first year or continuing students' application packet. Both the subsidized and unsubsidized Federal Stafford Loan can be applied for on this form. Completed Processing Request Forms should be forwarded to the Financial Aid Office. Students who plan to use Stafford Loan funds to help pay for tuition should submit the Loan Processing Request Form to the Financial Aid Office, along with all other required documents, no later than July 1, 2008 in order to avoid late fees. Approval of the loan can take up to four weeks after the loan has been processed by the Financial Aid Office.
Loan Processing Request
New England School of Law processes most Stafford Loans electronically. We believe this is the easiest and most efficient way to process a Federal Stafford Loan. After submitting a Loan Processing Request Form, students will receive a Master Promissory Note (MPN) from their lender, unless already completed. The MPN must be completed and returned to the lender before funds can be disbursed. The MPN is completed only once, usually during your first year. Most continuing students will only need to submit a Loan Processing Request Form in order to receive a Stafford Loan.
Disbursement of Funds
A loan application will take approximately 2-4 weeks to be processed after information is sent to the lender from the financial aid office. Loan proceeds will be sent to New England School of Law by check or EFT (Electronic Funds Transfer). The Student Accounts office will notify students through their mailboxes when a loan check or EFT loan proceeds have been received by the school. All first time Stafford Loan borrowers must complete an Entrance Interview prior to receiving his or her first loan disbursement. Generally, Federal Stafford loans will be disbursed in two installments - one at the start of the fall semester and the other at the start of the spring semester. Loan funds will not be available for refund until after the first week of classes.
Federal Graduate PLUS Program
General Information
Graduate students are now eligible to borrow under the PLUS Loan Program up to their cost of attendance, minus other financial aid. Graduate PLUS loans will have a fixed interest rate of 8.5% and, like an unsubsidized Stafford Loan, the federal government does not pay the interest during in-school, grace and deferment periods. The borrower will pay all interest, which begins to accrue at each disbursement. There is up to a 3% origination fee to the government and up to a 1% insurance fee to the loan guarantor; these fees are deducted from the loan amount, prior to disbursement. The maximum amount of Federal Graduate PLUS Loans you can borrow each year is limited by the cost of attendance. To apply, students must initiate the loan process by contacting their lender of choice.
Students will now be required to complete an Entrance Interview for their Graduate Plus loans, prior to receiving his or her first disbursement.
Private Loan Programs
Private education loans are available from a variety of lenders. As with the Grad PLUS loans, private loan eligibility is based on a student's budget and satisfactory credit is essential for approval.
Bar Study Loans
Understanding Credit
Many students find it necessary to secure funding beyond the Federal Stafford Loan and any institutional funds. Approval of private education loans, however, requires that you meet certain criteria as established by the lender. Many lenders may also utilize a credit scoring technique to determine your creditworthiness. If attending law school is contingent upon approval of a private loan, it is recommended that you obtain a copy of your credit report. A free copy of your credit report can be obtained once every 12 months. Find out how to get your free copy at Annual Credit Report.com.
Information for International Students
Students coming to NESL from outside of the United States who are not eligible for federal loans can contact the Financial Aid Office via email for a listing of private lenders which offer loans to international students and an estimated budget.
