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Additional Loan Information

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Borrower Eligibility

In order to request a Direct Student Loan, you must meet the following requirements:

•    Complete a 2017-2018 Free Application for Federal Student Aid (FAFSA) at www.fafsa.gov.

•    Have received an Award Notification or a letter stating you are ineligible for any need-based aid.

•    Satisfy the general student financial aid eligibility requirements.

•    Be enrolled in a minimum of six (6) approved units.  Students who are on an Extension Petition must be enrolled in six (6) approved units.

•    Comply with Entrance and Exit Loan Counseling requirements.

•    Maintain Satisfactory Academic Progress standards.

Even though it is a loan, the college has the right to refuse to certify a loan for high-risk borrowers. West Los Angeles College has a responsibility to evaluate all student loan requests on a case-by-case basis and West Los Angeles College has the federal authority [HEA Sec, 479 (A)(c), 34 CFR 685.301(a)(8)] to reduce or deny loan requests for students that in our professional judgment are at serious risk of loan default. High levels of indebtedness, coupled with a small amount of progress in an academic program, are common indicators of high risk for default. After evaluation, your student loan request may be denied or reduced due to conditions below:

•    A previous default on a federal student loan.

•    Notification of previously discharged federal student loans due to disability or bankruptcy.

•    Notification of delinquent federal student loan repayment status.

•    Instances of inconsistent, fraudulent FAFSA, or admissions application information.

•    Inability to repay -- Applicants with loan indebtedness in excess of a maximum for two-year public institutions.

•    Consistent NOT meeting satisfactory academic progress standards.

 

Notification

The college will transmit the loan information to the Direct Loan Servicing Center. You will then receive loan disclosure notice from the U.S. Department of Education approximately two weeks after the loan has been originated. Watch for correspondence from your loan servicer. Take careful note of their contact information. It is critical that if your address or phone number changes, you notify your servicer. Maintaining correct information can help you protect your credit and keep your loan in good standing. You can also find your loan servicer at www.nslds.ed.gov

 

The right to reduce or cancel part or all of your loan

If it is determined that you are eligible, an award notification will be sent via email to your LACCD assigned email. You have the right to reduce or cancel the loan.  Requests for reductions or cancellations must be submitted in writing to the Financial Aid Department within 30 days of the date that on the award notification.

 

Dropping below half time

If you drop below half time prior to the scheduled Fall semester disbursement, the disbursement will be cancelled and loan fund(s) will be returned promptly to the U.S. Department of Education.  If you drop below half time after the scheduled fall disbursement and before the Fall semester is completed, you will not be eligible for a Spring semester loan disbursement. In both scenarios you may be eligible for a loan for the spring semester only, and a new loan request must be submitted. If you drop below half time prior to the scheduled spring semester disbursement the disbursement will be cancelled. We are concerned and you should be concerned about accruing debt when your progress is limited.

 

Federal loan borrowing limits

A student’s financial need and annual loan limits determine how much a student may borrow. Students will either be classified as Grade Level One (0-30 units completed) or Grade Level Two (over 30 units completed and student is enrolled in a program of more than one year). Grade Level Three only for the students accepted into the Dental Hygiene Bachelors Degree program.

Year

Dependent Students (except students whose parents are unable to obtain PLUS Loans)

Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)

First-Year Undergraduate Annual Loan Limit

$5,500—No more than $3,500 of this amount may be in subsidized loans.

$9,500—No more than $3,500 of this amount may be in subsidized loans.

Second-Year Undergraduate Annual Loan Limit

$6,500—No more than $4,500 of this amount may be in subsidized loans.

$10,500—No more than $4,500 of this amount may be in subsidized loans.

Third-Year and Beyond  Undergraduate Annual Loan Limit

$7,500—No more than $5,500 of this amount may be in subsidized loans.

$12,500—No more than $5,500 of this amount may be in subsidized loans.

 

Subsidized and Unsubsidized Aggregate Loan Limit

$31,000—No more than $23,000 of this amount may be in subsidized loans.

$57,500 for undergraduates—No more than $23,000 of this amount may be in subsidized loans.

Important reminder: If you have several years remaining until you achieve your Bachelors degree, you should consider limiting borrowing so you retain loan eligibility. You should also know that Pell Grant eligibility is now capped at 12 full-time semesters (600%).

 

How does this change affect me?

New and returning student borrowers will be required to e-sign a Federal Direct Loan Master Promissory Note and Federal Direct Loan Entrance Counseling at studentloans.gov. To complete an MPN online, you will be required to use your FSA User Id and Password. If you do not have a FSA User ID you may request one from www.fsaid.ed.gov.

 

First time Direct Loan Borrowers.

If you are a first-time borrower on or after July 1, 2013, there is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. This time limit does not apply to Direct Unsubsidized Loans or Direct PLUS Loans. If this limit applies to you, you may not receive Direct Subsidized Loans for more than 150 percent of the published length of your program. This is called your “maximum eligibility period.” Your maximum eligibility period is based on the published length of your current program. You can find the published length of any program of study in the West Los Angeles College catalog.

 

What is the difference between the Direct Loan Program and the Federal Family Education Loan Program (FFELP)?
The most important difference between the two programs is the source of loan funding. Direct loans come through the U.S. Department of Education and are obtained from the U.S. Treasury. This program offers student one point of contact because the loans are made, backed and serviced by the U.S. Department of Education. FFELP funds come from independent lenders (banks). The guarantor and servicer may be other agencies. Very often the student's loan is "sold" to another lender or servicer. This can be confusing for the student and can complicate the repayment process.

 

What will happen to the existing loans that I have borrowed from other lenders?

After graduation, you have a choice. You may either make individual payments to your previous lender(s) and to the Department of Education for your Direct Loans, or you can consolidate your loans into one simple payment. You may either consolidate all your loans with your previous lender, or with the Department of Education. However, many private lenders have discontinued their consolidation services.

 

Will the change in loan programs cause my prior loans to go into repayment?

No, your prior Stafford loans will not go into repayment as long as you remain enrolled at least half time.

 

Will I have to undergo a credit check to borrow a Direct Loan?

Neither FFELP nor the Direct Loan Program requires credit checks for students seeking Subsidized or Unsubsidized loans.

If you still have questions regarding Direct Loans, or if you need any other financial aid information, please contact 310-287-4532.


LOS ANGELES COMMUNITY COLLEGE DISTRICT
Central Loan Administration Unit (CLAU)
770 Wilshire Boulevard, 5th Floor
Los Angeles, California, 90017

 

To determine eligibility for loan rehabilitation or loan cancellation for teaching, qualified employment, military service and total and permanent disability, please contact the CLAU at (800) 822-5222.