Common Questions About Federal Financial Aid
Are there any consequences if a student does not repay a loan?
Failure to repay loans can have serious consequences. Not only will it affect one’s credit, a student’s wages could be garnished, tax returns withheld and eligibility lost to participate in any further federal financial aid programs.
What is the difference between a subsidized and unsubsidized loan?
The federal government pays the interest on a subsidized loan while the student is in school at least half time and during the grace period. The student can either pay the interest on an unsubsidized loan or choose to capitalize the interest payment. The current interest rate is 6.8% on unsubsidized loans.
Why are all graduate school loans now unsubsidized?
Due to federal budget cuts the subsidized loan program for graduate school programs was discontinued as of July 1, 2012. Currently, all loans that are originated are unsubsidized and interest begins accruing once the loan is disbursed. The financial aid office recommends, if possible, that students pay this interest while attending school. This will enable students to avoid captilization of this interest onto the balance of their loans. Students may contact their lender to arrange making interest payments while enrolled in school.
After my tuition has been paid, when can I expect to receive my check for remaining loan funds?
Once the funds are received, please allow two weeks for the Business Office to mail your refund check or to have your check available to pick up at the front desk or in the library.
How does a student know how much money he or she borrowed?
The lender will provide Disclosure Statements showing details of current loans and reflecting overall indebtedness. You may also access your loan history on the National Sutdent Loan Data System (NSLDS) at www.nslds.ed.gov. You FAFSA pin number is required to access the NSLDS.
How can a student find out what his or her loan payments will be?
Students may contact their lender to determine the amount of their loan payments. Lender’s contact information is available on the NSLDS website: www.nslds.ed.gov.
What is a deferment?
A deferment is a period during which repayment of the principal balance of your loan is temporarily delayed. A student who is in deferment is not required to make loan payments while enrolled in at least a half time status. A deferment form must be completed and approved by the lender before becoming official.
What is a grace period?
A grace period is the time between a student leaving school (graduates or withdraws) or dropping below half time enrollment status and their entering repayment. A grace period’s duration is six months. At the end of this six month period, a student will required to begin repaying all student loans, unless other arrangements are made with the Lender.
If a student defaulted on a previous student loan, can he or she still receive financial aid?
Please refer to our policy on this subject at www.ps.edu/become-a-student/office-of-financial-aid/student-loans/eligibility-and-verification/. Contact the Office of Financial Aid if you wish to discuss your situtation.