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 Loan Frequently Asked Questions

  Who loans the money? Who is the lender?

  When do I have to repay the loan?

    What happens if I cannot repay the loan?

If a loan payment is due, and you are unable to make the payment, contact the lender as soon as you realize you are unable to make the payment. You may also contact our Default Prevention Coordinator to find out what your options may be. It is easier to prevent default rather than trying to overcome it!

    What is the loan period?

This is the covered timeframe for the current loan application. If the covered timeframe is an academic year, the loan period would be from the start of the year (August) until the end of the year (May). If the loan is to cover one term, the beginning and ending months (and year) make up the loan period. For a Fall only loan, this period is August - December; Spring only loan, January - May; Summer only loan, May - June.

    I need additional money. What can I do?

If the student has been awarded a Ford loan and the awarded amount is less than the maximum for the grade level, the student may be entitled to receive the difference. If the student is classified as Independent (according to the FAFSA), the student may be eligible for a Ford unsubsidized loan.

If the student is classified as Dependent (according to the FAFSA) and the parent has applied for the PLUS loan, and has been denied, the student may be eligible for the unsubsidized loan. If the student has received the maximum of the subsidized and/or unsubsidized loans, he or she and/or the parent may consider private student and/or parent loans and/or the PLUS loan.

   Tell me about the interest on these loans.

The interest on Federal Direct loans is determined by the federal government, and is based on the Treasury Bill. The interest on PLUS and private loans is established by the lender.

   How are the funds disbursed?

Loan proceeds are requested in two (2) disbursements. If the loan period covers the academic year, the disbursements take place after the Drop/Add period at the beginning of each term. If the loan period is for one term, the first disbursement still takes place after the Drop/Add period, and the 2nd takes place near the middle of the term.

    What is a Promissory Note?

The Promissory Note is a legally binding contract between the borrower and the lender whereby the completing and signing of the Note, the Borrower has agreed to the terms and conditions of the loan. Some of these terms and conditions include the interest rate that may be applied at the time of repayment, the length of time allowed for repayment, the length of time for deferments and forbearances, etc. It is the responsibility of the Borrower, not the school, to keep a copy of the Promissory Note.

   What is the difference between a forbearance and a deferment?

A deferred loan does not accrue interest during the period. A loan that is in forbearance continues to accrue interest although the payment may not be due.

    I do not have good credit, now what?

Not all loans are based on credit. Loans that are not based on credit require the completion of the FAFSA, i.e. William D. Ford Direct Student Loan (subsidized and unsubsidized), and the Federal Perkins Loan.

    What are the borrowing limits?

Because educational loans are just for that purpose - education, they all have borrowing limits that are set by the U.S. Department of Education.

The William D. Ford Subsidized loan borrowing limits are according the student's grade classification as determined by the university's Office of the Registrar and students may borrow up to the following annual amounts: 

The William D. Ford Unsubsidized Loan have the same loan limits according to the grade classification, yet fills in the difference of what a student may not receive in the subsidized loan. For example, a student who is classified as a senior is eligible for only $2500 in the subsidized loan. This student can receive up to the additional amount of $3000 to reach the grade level maximum of $5500.

The PLUS and private loan limits are determined as the Cost Of Attendance (COA) minus (-) Awarded Financial Aid (if any).

    Why must I attend an Entrance/Exit interview? When?

The university is required by the U.S. Department of Education to provide information to student borrowers regarding their loans. Entrance Counseling is for first time loan borrowers and must be completed before funds are disbursed to the students account. Students will learn what their rights and responsibilities are as a borrower during this session. Entrance Counseling sessions are conducted online at www.studentloans.gov

At the Exit Counseling students receive such information as a report indicating the total amount of loans that have been borrowed, the date repayment begins, the monthly amount, etc. They are also informed as to how the university can assist if problems arise concerning repayment. We are still available even after the student leaves NSU. Exit counseling sessions are conducted during your last semester, within a group setting. The dates, times and locations are posted in the Information Booklet for Graduates. If you missed this mandatory meeting, contact the Default Prevention Coordinator.

    What is consolidation; how does it work?

When multiple loans have been borrowed, then monthly payments become due, sometimes the payments can be lessened when all of the loans are combined and one single payment can be made instead of multiple ones. This can save the student money in the long run as well as reduce the amount of interest that has accrued on the loans. The Default Prevention Coordinator can assist in accomplishing this process.

   Will I or my parents have the funds we've requested prior to the start of school? If not, what will we do?

Most loan proceeds will not arrive at the university prior to the start of classes. If the lender will be sending the funds to NSU, an approval notice indicating the approved amount and the term are all that need to be sent to the university at least 2 weeks PRIOR to the start of classes. If the lender will be sending the funds directly to the student or parent, THE CHECK must be brought to the university at least 2 weeks prior to the start of classes.