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Direct loans are funded and owned by the federal government. Loan repayments are made to the government branch called the Department of Education. Repayment of Direct Loan funds begins six months after the student graduates or ceases enrollment at least half-time. To qualify for Direct loans a student must be admitted, in good academic standing, and enrolled at least half time in a program leading to a degree or certificate. If student drops below half time during a term or semester, the remainder of the loan will be canceled. Student Loans are financial obligations that must be repaid. While some loans are based on financial need, there are loan programs available to all federally-eligible students – regardless of income. We recommend using the Loan Repayment Calculator on the Federal Student Aid website as a guide to caculate monthly payments once you enter repayment.
Beginning 2012-2013, graduate students will no longer be eligible to borrow SUBSIDIZED Federal Direct Loans due to a recent change in federal legislation. All Direct Loans for 2011 - 2012 must be processed and disbursed prior to July 1, 2012 to ensure the Subsidized portion is retained. This includes loans for Summer Session 2012. Students enrolled only in a Teacher Credential Program will still be eligible for the Subsidized Stafford loan, as they are not considered to be "Graduate students" for financial aid purposes.
- Accept your Direct Loan on MyCSUMB
After you accept your Direct Loan offer, you will be notified to your CSUMB email how to complete two necessary requirements online.
If you are a first time borrower and you decide to accept your Direct Loan, you must complete the Entrance Loan Counseling Requirement prior to your first Direct Loan disbursement. Your loan will not be disbursed until the requirement has been completed. Continuing students who previously completed this requirement do NOT need to complete Entrance Counseling again.
Federal Direct Loans
There are five federal loans in the program:
- Federal Direct Subsidized Loan (Interest rate at 3.4%)
- Federal Direct Unsubsidized Loan (Interest rate at 6.8%)
- Parent Loan for Undergraduate Students (PLUS) (Interest rate at 7.9%)
- Grad Plus for Graduate students (Interest rate at 7.9%)
- Federal Perkins Loan (interest rate at 5%)
The annual interest rate for federal student loans is set by the federal government. Payments on the loan may be deferred during the time you are enrolled at least half-time. To retain deferred status, you must enroll each semester in at least 6 credits of undergraduate or 4 credits of eligible master's degree coursework. At CSUMB, GRAD 699 courses do not qualify for in-school deferment. Loan funds cannot be released if you drop below half-time status, do not meet the satisfactory academic progress policy, or have any university holds.
Subsidized Federal Direct Loan: is available only to undergraduate students with financial need. During the time recipients are in school (enrolled half time or more), the federal government will pay the interest. Effective July 1, 2012, interest deferment during the six month grace period is eliminated for new undergraduate loans made after July 1, 2012 and before July 1, 2014. The repayment period still begins 6 months after the student is no longer enrolled at least 1/2 time, but the interest that accrues during those six months will be payable by the student rather than be subsidized by the federal government.
Unsubsidized Federal Direct Loan: is available to students who did not qualify for Subsidized funds. The federal government does not pay the interest while students are in school. Consequently, interest is charged on the loan from the date you receive the loan. Payments may be deferred, but the interest accrued while you are in school is added to the amount borrowed.
The federal government has set the following annual Subsidized and Unsubsidized Loan limits for Dependent Students. Dependent students are ineligible for the additional unsubsidized loans unless their parents are ineligible for the PLUS loan.
|YEAR IN SCHOOL||BASE AMOUNT||UNSUBSIDIZED||ADDT'L UNSUBSIDIZED|
|Freshman (0-29 UNITS Earned)||$3500||$2000||$4000|
|Sophomore (30-59 UNITS Earned)||$4500||$2000||$4000|
|Junior/Senior (60 + UNITS Earned)||$5500||$2000||$5000|
The federal government has set the following annual Subsidized and Unsubsidized Loan limits for Independent students:
|YEAR IN SCHOOL||BASE AMOUNT||ADDT'L UNSUBSIDIZED|
|Freshman (0-29 UNITS Earned)||$3500||$6000|
|Sophomore (30-59 UNITS Earned)||$4500||$6000|
|Junior/Senior (60+ UNITS Earned)||$5500||$7000|
The Federal Direct Loan Aggregate limit for Dependent undergraduates is: $31,000 (no more than $23,000 of which can be subsidized). The Federal Direct Loan aggregate limit for Undergraduate Independent students is: $57,500 (no more than $23,000 of which can be subsidized). The Federal Direct Loan aggregate limit for Graduate and Professional students: is $138,500 (including amounts
borrowed for undergraduate study). No more than $65,500 can be subsidized.
Restriction for graduating seniors with one-semester loan: We are required by federal law to prorate (determine partial loan eligibility) when an undergraduate student plans to graduate at the end of the one term for which they are receiving a Direct Loan loan. For example, a senior who will be graduating at the end of fall term will be subjected to proration of his/her annual loan amount because he/she will not attend the whole academic year. If you think you may be under this restriction, please come to the Financial Aid Office for further clarification.
Federal Parent Loan Program (PLUS)
Is available to parents of dependent students. The interest rate is fixed at 7.9% Repayment begins 60 days from the date the loan is fully disbursed.
PLUS amounts are determined by subtracting the amount of financial aid awarded vs. Cost of Attendance. Parent borrowers must undergo a credit check with the Department of Ed. If adverse credit is determined, the PLUS loan can be denied. If approved, all PLUS funds are sent to CSUMB in two installments and are applied to the student account. Excess funds are issued to the borrowing parent and mailed to the address entered on the CSUMB PLUS Loan Application. Loan funds cannot be released if the student has dropped below half-time status, does not meet satisfactory academic progress policy, or has any university holds. PLUS funds may be used to pay any outstanding charges owed to the university including registration fees, tuition, housing, and miscellaneous charges.
Parents and students interested in borrowing a parent PLUS loan must complete the PLUS loan application available under Financial Aid Forms
FEDERAL GRADUATE LOAN PROGRAMS (PLUS):
Is available to Graduate students. The interest rate is fixed at 7.9% Repayment begins 60 days from the date the loan is fully disbursed.
PLUS amounts are determined by subtracting the amount of financial aid awarded vs. Cost of Attendance. Student borrowers must undergo a credit check with the Department of Ed. If adverse credit is determined, the PLUS loan can be denied. If approved, all PLUS funds are sent to CSUMB in two installments and are applied to the student account. Loan funds cannot be released if the student has dropped below half-time status, does not meet satisfactory academic progress policy, or has any university holds. PLUS funds may be used to pay any outstanding charges owed to the university including registration fees, tuition, housing, and miscellaneous charges.
Students interested in borrowing a Grad PLUS loan must complete the Grad PLUS loan application available under Financial Aid Forms webpage
FEDERAL PERKINS LOAN:
The Federal Perkins Loan is fixed five percent (5%) interest rate loan for students with exceptional financial need. CSUMB acts as the lender for this loan and repayment is made to CSUMB. Each university determines the maximum Federal Perkins Loan that can be offered based on its level of funding. CSUMB offers Federal Perkins Loans to post-baccaulerate students per available funding and university policies. For assistance with payment issues such as; deferments, collections, and defaults contact the CSUMB Financial Aid Office at 831-582-5100.
Private Education Loans
Private education loans are credit-based consumer loans used to cover education costs. These types of loans tend to cost more than loans offered by the federal government but are less expensive than credit card debt. Federal Direct Loans (subsidized, unsubsidized, plus) offer fixed interest rates that are lower than the variable rates offered by most private education loans. Federal Stafford loans also offer better repayment and forgiveness options. For these reasons, we recommend that you consider exhausting your eligibility for Federal Direct Loans before resorting to private student loans.
A private education loan may be right for you if scholarships, grants and federal student loans do not cover your total education-related costs or you do not want to muddle credit cards, home equity, savings and investments with your tuition costs. It may also be an option if you are not applying for traditional financial aid but still need money to cover your education-related costs.
It is your responsibility to research private education loan resources, select a lender and apply for a private education loan via the selected lender's process. Once you select your lender and your application is processed, your lender will send the Financial Aid Office a request for certification of your enrollment and cost of attendance. You must be enrolled for the loan period listed on the request in order for the Financial Aid Office to certify your private education loans. It may take the Financial Aid Office up to two weeks to certify private education loans after the request is received. You should plan on paying for courses by the assigned due date if your private education loans haven't been posted to your CSUMB Account.
If you have already filed your FAFSA and you have been awarded financial aid, the Financial Aid Office will complete the certification request and determine the amount for which you are eligible. The amount we certify may not match what you requested because your Financial Aid Awards cannot exceed the cost of attendance. If you filed your FAFSA but haven't completed your financial aid file, the Financial Aid Office will not complete the certification request until you have submitted the required documents to the Financial Aid Office, unless otherwise noted.
It is not a requirement to apply for financial aid before applying for private education loans but, we encourage you to do so by completing the FAFSA. Students are required to complete a Private Education Loan Applicant Self-Certification Form prior to receiving an alternative loan. Self-Certification Form can be found on the Financial Aid Website.
Teacher Loan Forgiveness/Repayment Programs
APLE: The Assumption Program of Loans for Education (APLE) is a competitive teacher incentive program designed to encourage outstanding students and district interns to become teachers in
- subject areas where a critical teacher shortage has been identified; or
- designated schools that meet criteria established by the Superintendent of Public Instruction.
Designated schools include those that:
- serve a large population of students from low-income families;
- are located in rural areas;
- have a high percentage of teachers holding emergency permits; and
- rank in the lowest 20 percentile of the Academic Performance Index.
Additionally, the APLE for Credentialed Teachers is designed to encourage currently credentialed teachers to seek and teach in K-12 teaching positions in California’s public schools. Credentialed teachers must be employed at a K-12 California public school that is ranked in the lowest 20 percent on the Academic Performance Index.
To participate in the program, students, district interns and credentialed teachers must submit an application through the appropriate channels and the application must be accepted by the California Student Aid Commission.
For more information regarding APLE and how to apply to one of the three loan assumption programs the Commission offers within the APLE, please contact the CSUMB Financial Aid Office at 831-582-5100. All application materials must be submitted to the Financial Aid Office for processing.
Federal Teacher Loan Forgiveness Program offers cancellation of up to $5,000.00 of Stafford/Direct loans for five years of teaching in a low-income school and up to $17,500.00 if you teach math, science or special education in high school or special education in elementary school that serve low-income families and meet other qualifications may be eligible for forgiveness of up to a combined total of $17,500 in principal and interest on their FFEL and/or Direct Loan program loans. (Note: As of August 14, 2008, an otherwise eligible borrower may qualify for forgiveness if the borrower has provided qualifying teaching services at one or more locations that are operated by an educational service agency.) For more information visit the Department of Education Federal Student Aid Website
As a borrower, it is the student's responsibility to know how much you have borrowed, who is your lender, and how much you will be required to repay when you leave school. The following links will help you collect your federal loan borrowing history at all educational institutions and calculate future payments: