Loan Information

Steps to Receive a Federal Direct Stafford Student or PLUS Loan

A Master Promissory Note (MPN) needs to be completed if you wish to borrow through the Federal Direct Stafford or Federal Direct PLUS Loan program. The Federal Direct Stafford Master Promissory Note (MPN) is a legal document. By signing the Stafford MPN, you promise to repay your current and future Stafford loans. This note is valid for 10 years and does NOT require you to complete another MPN for subsequent borrowing, unless you elect to attend another institution.

Please follow these simple steps to complete the
Federal Direct Stafford Master Promissory Note (MPN) online:

1. Go to www.studentloans.gov
2. Follow the online instructions to get information and to apply.
3.  You must sign your Master Promissory Note (MPN) electronically therefore, you must have a Federal Student Aid (FSA) ID. The FSA ID is a username and password has replaced the Federal Student Aid Pin and is used to log into certain U.S. Department of Education websites. This ID confirms your identity when you access your financial aid information and electronically sign Federal Student Aid documents. To create a FSA ID, visit fsaid.ed.gov or call 1-800-4-FED-AID (1-800-433-3243).

You will need this information to apply:

• Your Social Security Number, date of birth, permanent home address, and driver’s license number.
• The name of the college you plan to attend.
• The names, addresses, and telephone number of two separate references (Please note the references must NOT be living at the same U.S. address).

Federal Direct Stafford Loans and Federal Direct PLUS Loans are guaranteed by the Department of Education. The loan funds will be delivered through Electronic Funds Transfer (EFT) directly to your business office student account. The first disbursement will occur following 30 days into the semester.

ENTRANCE COUNSELING
Federal regulations require all Federal Direct Stafford loan borrowers to complete “LOAN ENTRANCE COUNSELING” before the first disbursement of your Federal Direct Stafford loan. To complete this requirement, please go online to studentloans.gov and click on Entrance Counseling.  The purpose of the counseling is to make you aware of your rights and responsibilities associated with student loan borrowing.

EXIT COUNSELING
Federal regulations require all Federal Direct Stafford loan borrowers to complete “LOAN EXIT COUNSELING” before your enrollment ends.  To complete this requirement, please go online to studentloans.gov and click on Exit Counseling. The purpose of the counseling is to make you aware of your rights and responsibilities as you enter the repayment stage of your student loan borrowing.  Please note that the Exit Counseling requirement must be met before receiving your diploma.

Due to greater repayment flexibility and cancellation provisions of federal student loans, students should only consider obtaining a private education loan after they have exhausted their federal student loan options. They should also file the Free Application for Federal Student Aid (FAFSA), which may qualify them for grants, work-study and other forms of student aid. Undergraduate students should also compare costs with the Federal PLUS Loan to make sure they select the best product for their particular situation.

At ELM Select you can compare and apply for private education loans all in one place.  You are not limited to ELM for your loan.  Johnson College will certify any loans for any lender a student selects.

To visit the personalized page for private loans for Johnson College, please visit: https://www.elmselect.com/v4/school/988/program/1/program-detail.  If you would like additional help selecting a lender please contact our Financial Aid Office at 570-702-8855.

**It should be noted that all education loans are expected to be repaid whether or not you complete your education. Please contact your lender for terms, conditions and repayment schedules.

What to Expect

A student loan is a serious obligation and must be repaid regardless of the following:

• Whether you finish school
• File bankruptcy
• Have a job in your field
• Change your name, address, telephone number, etc.
• Change Schools
• Withdraw
• Transfer

Grace Period: Your federal direct student loan(s) have a 6 month grace period prior to repayment. This grace period begins the day after you graduate, withdraw from school or drop below half time status (6 credits).

Deferment: You have the right to postpone repayment of your loan(s) if you qualify for a deferment. Please contact the Dept. of Education at 1-800-4FED-AID or on-line at studentloans.gov for options that may be available to you.

Under certain circumstances you can receive a deferment that allows you to temporarily postpone loan repayments.  A deferment is a period in which repayment of the principal balance is temporarily postponed if you meet certain requirements.  During a deferment, the government pays the interest on subsidized loans.

For all unsubsidized loans and PLUS loans, you are responsible for paying the interest that accrues during the deferment period, or allow it to be capitalized (added to the principal balance).

Deferment Conditions:

• Enrolled at least half time at an eligible postsecondary school.
• Study in an approved graduate fellowship program or in an approved rehabilitation training program for the disabled.
• Unable to find full-time employment (for up to three years).
• Economic hardship, which includes Peace Corps Service (for up to three years).
• A member of the National Guard or other reserve component of the U.S. Armed forces who is called or ordered to active duty while enrolled at least half-time at an eligible school or within six months of having been enrolled at least half-time.
• While borrower is on active duty during a war or other military operation or national emergency and if the borrower was serving on or after Oct. 1, 2007.

REMEMBER:  You MUST continue making payments on your student loan until you have been notified that your request for deferment has been granted.

Forbearance: If you are unable to make a scheduled payment due to special circumstances, you may request a forbearance through the Dept. of Education.  You should contact the Dept. of Education immediately if you are experiencing problems with repayment at 1-800-4FED-AID or online @ studentloans.gov.

Types of Repayment

6 months from your last date of attendance, you will be required to begin making payments on your student loan(s). The following is a list of some of your payment options:

• Prepayment-make payments while in school or during your grace period
• Standard Repayment-Monthly payments remain the same throughout repayment
• Graduated Repayment-Payment begins with small amounts that increase over time
• Income Sensitive Repayment-Payments are based on a percentage of your gross monthly income and are adjusted annually.

For more information on repayment options, please contact the Dept. of Education at 1-800-4FED-AID or studentloans.gov.

Delinquency/Default

Delinquency: If you fail to make payments when due, your loans become delinquent. Delinquent loans can adversely affect your credit.

Default: If a loan becomes delinquent for 270 days, it will be declared in default.  Consequences of default may include:

• Damage to your credit rating
• Garnishment of wages
• Legal action against you
• Collection charges
• Loss of deferment eligibility
• Loss of your professional license
• Increase in the interest rate on your loan
• Withholding of your federal and state income tax refunds
• Loss of eligibility for state and federal financial aid

Student Loan Repayment Policy

Default prevention at Johnson College begins before the student receives any loan funds. Every student who wishes to borrow under the federal loan programs must complete an on line entrance interview session. This session notifies the student of their rights and responsibilities pertaining to their federal student loans. (This includes the fact that student loans must be repaid.) The college will not process a federal loan for a student until the student has completed this entrance counseling.

Prior to graduation, all students who borrowed through the Federal Direct Loan Programs are notified that they must complete an on line exit counseling session. The Financial Aid Office works in conjunction with the Academic Affairs Office to insure that each graduate completes the exit counseling session. Students who leave school but have not completed their degree requirements are notified in writing that they are required to complete the exit counseling session.

Johnson College works with Great Lakes Navigator and National Student Loan Data System (NSLDS) to contact students, by a variety of methods, who are delinquent (the first day after a missed payment) on their federal student loans. To help prevent students from defaulting (missing 270 days of loan payments) on their federal student loans Johnson College sends communication to students on a monthly basis. The letter contains information on the consequences of default such as:

• Entire unpaid balance of loan and any interested due immediately
• No longer eligible for deferment, forbearance or choice of repayment plan
• Loss of eligibility for additional federal student aid
• Tax refund withheld and applied to loan
• Wage garnishment sent to loan servicer
• Court hearings
• And more

If you are at risk of becoming delinquent or of going into default of your federal student loan call the Johnson College Financial Aid Office at (570) 702-8855, your servicer or visit Federal Student Aid at https://studentaid.ed.gov

The school’s default rate is calculated and published each year by the U.S. Department of Education.