Cal Poly provides loans to students and parents via the Federal Perkins, Federal Direct Stafford and Parent PLUS programs. Alternative student loans are also available through private sources.
To be offered a federal student loan, including non-need based loans, you must first complete the FAFSA for the appropriate award year.
For more information about federal loan opportunities, go to the federal aid website at http://studentaid.ed.gov/types/loans.
Federal Perkins Loan
- Need-based loan with a fixed interest rate of 5%.
- No interest accrues while you are in school and for 9 months after you leave school, or cease to be enrolled at least half-time.
- By filing the FAFSA, you are automatically considered for the Perkins Loan.
- This is an extremely limited fund. If eligible and funds available, you will automatically be awarded.
- Offered to eligible students who meet AB540 criteria and are not eligible for federal aid.
- Interest rate for 2016-17 is fixed at 3.76%.
- Repayment begins 6 months after a student ceases to attend at least half-time.
- This is a limited fund and eligible students will automatically be offered the loan if they qualify and funding is available.
- Amount offered will vary dependent upon funding.
- Students have 30 days to accept and complete the steps to finalize the loan.
- Once accepted the required steps will be put on the student’s checklist.
- Student will receive an email from ECSI, the loan servicing center with log-in information to their website.
- Student will need to follow instructions to log-in and complete the loan entrance counseling and Dream Loan Promissory Note.
- Once completed ECSI notifies Cal Poly and loan funds will be able to disburse.
- If the loan is not finalized within 30 days it will be canceled and offered to another eligible student.
Student Federal Direct Stafford Loan
- The Federal Direct loan was created by the federal government to help finance educational costs. The loans are certified by Cal Poly and funded directly by the US Department of Education.
- For loans received in the 2016-17 award year (loans disbursed between July 1, 2016 and June 30, 2017) the interest rate will be 3.76%*.
- Graduate level loans (students in Master's degrees) are unsubsidized. For loans received in the 2016-17 award year (loans disbursed between July 1, 2016 and June 30, 2017) the interest rate will be 5.31%*.
- For loans with a FIRST disbursement on or before October 1, 2016 the origination fee is 1.068%. The loan origination fee is charged and taken off the top of the loan. For example if you borrow $1,000, the amount disbursed is $989.32 ($1,000 less the $10.68 loan origination fee). Loans with a first disbursement after October 1, 2016 will have a loan origination fee of 1.069%.
- Repayments begin six months after the student is no longer enrolled at least half-time, graduates, or leaves school.
- All students need to carefully consider potential debt before accepting loans. Contact the Financial Aid Office with any questions.
*Rates will vary annually, with the rate fixed for the lifetime of the loan taken in each particular year. Every July the interest will change for loans taken in that year with interest rate caps of 8.25% for undergraduates and 9.5% for graduate students. As long as the federal sequester is in effect, every October 1st loan origination fees will change.
Student Stafford Direct Subsidized vs. Unsubsidized
For undergraduate and credential students there are two types of Stafford Direct loans: subsidized and unsubsidized. Students in graduate programs are only eligible for the unsubsidized student loan.
- Subsidized loans are based on financial need, the Expected Family Contribution (EFC), and the Cost of Attendance (COA) at Cal Poly. The federal government pays the interest on these loans while the student is in school. There is a 6 month grace period where payment is not due, though interest will begin to accrue. After this 6-month grace period, the student is required to make payments on the loan including interest.
- Unsubsidized loans have no interest subsidy, and therefore they accrue interest while the student is in school and during the 6-month grace period. The student may pay the interest while in school or may choose to postpone interest payments. Any accrued interest will be added to the original loan amount (capitalization).
The Stafford Direct Loan Process
- Step 1: Accept loans offered: Accept the loan(s) on my.calpoly.edu. If you do not want to borrow the full amount offered, click accept at which point a box will open where you can indicate a lesser amount.
- Step 2: Loan transmission:. The Financial Aid Office will transmit the information to the US Department of Education.
- Step 3: For new borrowers, complete the MPN. If this is the first loan in the DL program, complete a Master Promissory Note (MPN), click here. The MPN is not available to sign until the Financial Aid Office transmits your loan information. This is the contract between you (the borrower) and the lender (the Department of Education).
- Step 4 For new student borrowers, complete Loan Entrance Counseling. All new Stafford Loan borrowers are required to complete Entrance Counseling before receiving their first loan disbursement. Complete Entrance Counseling on-line at www.studentloans.gov. The proof of completion form is for your records. Cal Poly electronically receives notification and will remove the requirement from your "To Do List". All continuing borrowers are encouraged to complete Loan Entrance Counseling each year they receive a loan.
- Once the loan has been accepted and transmitted and the DL program shows record of a completed promissory note and loan entrance counseling (first time borrowers) on file in their system, the loan funds will be set to be electronically transmitted to the Cal Poly Student Accounts Office ( no earlier than one week prior to the start of each term). Please note:
- Money in excess of total term charges will be refunded to you when classes begin.
- All borrowers receive a disclosure statement prior to disbursement; you are also sent an email at the time of disbursement to remind you of your right to cancel this loan.
- For more information on the Direct Stafford Loan program (both subsidized and unsubsidized loans), please read the Direct Loan student basics brochure.
- For a student in transition between an undergraduate and a graduate program, or if provisionally admitted, determination of loan aid is subject to delay. When the undergraduate degree is awarded, or your graduate level confirmed by Records, notify the financial aid office and a counselor will review and revise your aid accordingly.
- Everyone who borrows a Stafford Loan must complete an Exit Interview online with the Student Accounts Office either the term before graduating, or otherwise withdrawing from school.
- A complete listing of your rights and responsibilities as a Direct Loan borrower is available at: http://www2.ed.gov/offices/OSFAP/DirectLoan/dlrights.pdf
Federal Direct PLUS Loan
- The Federal Direct PLUS (Parent Loan for Undergraduate Students) helps parents of dependent students pay college expenses. Parents may borrow up to the Cost of Attendance (COA) minus any financial aid received by the student. At Cal Poly, the FAFSA must be completed for a parent to borrow through the program.
- The interest rates on loans for the 2016-17 academic year (loans disbursed between July 1, 2016 and June 30, 2017) is fixed at 6.31%*.
- For loans with a FIRST disbursement on or before October 1, 2016 the origination fee is 4.272%. Loans with a first disbursement after October 1, 2016 will have an origination fee of 4.276%. Payments on this loan begin 60 days after the final disbursement in the spring.
- Parent PLUS Loan borrowers may choose to have repayment deferred while the student for whom the parent borrowed is enrolled at least half-time and for an additional six months after that student is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the parent during the deferment. Deferment forms are available from the direct loan servicer. The parent will receive information regarding how to contact the servicer once the first disbursement of the PLUS loan occurs.
*Rates will vary annually, with the rate fixed for the lifetime of the loan taken in each particular year. Every July the interest will change for loans taken in that year with an interest rate cap of 10.5% for parent borrowers.
The Parent PLUS Loan Process
- Step 1: Accept the PLUS loan: If you are interested in borrowing the PLUS, the PLUS award must be accepted on the student's financial aid awards on the student's Cal Poly Portal.
- Step 2: Complete the On-line PLUS loan application: Go to www.studentloans.gov. Only one parent applies for the loan, that parent must have an FSA ID Log In ( www.fsaid.ed.gov) to sign in and complete the PLUS application.
- Once signed in, select Request Direct PLUS Loan then Parent PLUS. Read and follow the instructions carefully.
- There is a credit component to the PLUS application. If the PLUS loan is approved, and this is the first PLUS loan for this student, you will be instructed to complete a Master Promissory Note (MPN).
- If the credit check is not approved you will be asked to indicate:
- If you are going to pursue the loan by obtaining an endorser (co-signer) – you will work directly with the origination center and Cal Poly will be notified once the loan is approved.
- If you are going to appeal the denial with the Department of Education – you will work directly with the origination center and Cal Poly will be notified once the loan is approved.
- If you are not going to/cannot resolve the denial - your student will be given the option to accept an additional unsubsidized loan of $4,000 or $5,000 depending on their grade level.
- If you are unsure - Cal Poly will receive your response with the denial notice and will communicate with you via email asking to notify us of your decision once you have decided if you going to attempt to resolve the denial or not.
>To qualify for a PLUS, a parent must be a U.S. citizen or an eligible non-citizen*, have a valid Social Security number and a favorable credit history. Parents with an adverse credit history may still be able to borrow a PLUS loan with a co-signer.
> Dependent students whose parents have been denied a PLUS loan may apply for an unsubsidized Stafford loan and should contact the Financial Aid Office.
>For more information on the Direct PLUS program, please link to the Federal website: https://studentaid.ed.gov/sa/types/loans/plus
> A complete listing of your rights and responsibilities as a Direct PLUS borrower is available at: http://www2.ed.gov/offices/OSFAP/DirectLoan/plusrights.pdf
* Parents who are not U.S. Citizens or eligible non-citizens should contact the Cal Poly Financial Aid Office regarding other options. As long as the federal sequester is in effect, every October 1st loan origination fees will change.
Federal Direct GRAD PLUS Loan
A federally insured, credit based educational loan similar to the Federal Parent PLUS Loan program. The Grad PLUS Loan helps graduate students with loan assistance beyond the Federal Stafford Loan program. Graduate students may borrow up to the Cost of Attendance (COA) minus financial aid offered. The interest rate for 2016-17 (loans disbursed between July 1, 2016 and June 30, 2017) is 6.31%. For loans with a FIRST disbursement on or before October 1, 2016 the origination fee is 4.272%. Loans with a first disbursement after October 1, 2016 will have an origination fee of 4.276%. Eligibility requires you to pass a financial credit review. It has more advantageous benefits than most alternative or private loan options. We encourage you to first use your annual Stafford Loan eligibility before borrowing through the Grad PLUS program.
*Rates will vary annually, with the rate fixed for the lifetime of the loan taken in each particular year. Every July the interest will change for loans taken in that year with an interest rate cap of 10.5% for grad plus borrowers. As long as the federal sequester is in effect, every October 1st loan origination fees will change.
The Grad PLUS Loan Process
Step 1: Contact the Financial Aid Office. To request the addition of the Grad PLUS you need to notify the Financial Aid Office either by speaking with a counselor or submitting a written request for the loan.
Step 2: Complete the On-line Grad PLUS Application. The application is completed on-line at www.studentloans.gov.
Step 3: For new borrowers, complete the Grad PLUS Loan Entrance Counseling: All new Grad PLUS Loan borrowers are required to complete Entrance Counseling on-line at www.studentloans.gov before receiving their first loan disbursement. Complete Entrance Counseling as early as possible to avoid funding delays. The proof of completion form is for your records. Cal Poly electronically receives notification and will remove the requirement from your "To Do List".
Students who are denied the Grad PLUS due to an adverse credit history may still qualify with a credit worthy co-signer.
For more information on the Direct Grad PLUS program, please refer to Department of Education website: https://studentaid.ed.gov/sa/types/loans/plus
A complete listing of your rights and responsibilities as a Direct PLUS borrower is available at: http://www.ed.gov/offices/OSFAP/DirectLoan/plusrights.pdf
Private lenders offer alternative educational loans. Alternative loans can fill the gap between what you receive from other financial aid sources and what you really need to cover the cost of your education. Alternative loans also assist borrowers who wish to acquire an educational loan, but do not qualify for federal loan programs or who need funds in addition to the federal loan programs. The interest rate and repayment provisions vary with each lender and will often change from year to year. Check with your preferred lender for current rates and application. You may view the list of lenders used by Cal Poly students in the past years by clicking the link below or you may select your own lender.
Cal Poly does not recommend any lenders and urges you to carefully review your financing options before using a private loan; we strongly urge you to apply for federal financial aid consideration by completing the Free Application for Federal Student Aid (FAFSA) before applying for a private loan. This application is available online at: http://www.fafsa.ed.gov/
If you are eligible to apply for federal loans, please review this link for more information on the differences between federal and alternative educational loans.
Alternative loan processing begins in August.
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