What is a loan?
A student loan is money borrowed to help pay the cost of a student’s education that must be repaid with interest.
Loans are legal obligations. Before you take out a student loan, think about the amount you will have to repay over the years.
You cannot have these loans canceled because you didn’t like the education you received, didn’t get a job in your field of study, or you’re having financial difficulty. The publication, Your Federal Student Loan: Learn the Basics and Manage your Debt can help you learn more about federal student loan programs and repayment options.
TYPES OF LOANS
A. Federal Direct Loans are low-interest loans for students and parents to help pay for the cost of a student’s education. The lender is the U.S. Department of Education.
- Subsidized: Students must demonstrate financial need as determined by federal regulations. Interest is paid by the federal government while you are in school and during certain other periods.
- Unsubsidized: Interest is not paid by the federal government and accrues while you are in school. If you do not pay the interest, it will be added to the unpaid principal amount of the loan. This is called “capitalization.” Capitalization increases the unpaid principal balance of your loan, and interest will be charged on the increased principal amount.
B. PLUS: Parents of dependent students may borrow under the PLUS program to help pay student’s expenses. The parent will have to complete a PLUS loan application and master promissory note (MPN). Also, the parent will be required to pass a credit check. Payment starts 60 days after the loan is fully disbursed.
C. Federal Perkins Loan is a low-interest (5 percent) loan available through NNMC. A Perkins loan is based on demonstrated financial need as determined by federal regulations. The funds available are limited, so it is important to apply early in the academic year.
REQUIREMENTS FOR ALL STUDENT LOANS
For PDF version of following, please click on link
To be eligible to receive a student loan, students must:
- Have a current FAFSA and a complete Financial Aid file
- Have all previous college transcripts in the Registrar's & Student Records Office
- Have an eligible major delcared in the Admission's & Recruitment Office
- Be making Satisfactory Academic Progress (SAP)
- Not be in default status for any federal student loan(s) or in overpayment status of a Pell Grant
- Be enrolled in a minimum of six credit hours (credit hours must pertain to degree)
Students are responsible to complete the following:
- Create FSA ID (ID can be created at fsaid.ed.gov)
- Or visit the following link for a video "How to Create an FSA ID"
If first time borrower
Please contact Angelique Rodriguez at email@example.com or by phone 505.747.2125
- Complete the Federal DL Entrance Counseling at www.studentloans.gov
- Sign the Federal DL Master Promissory Note at www.studentloans.gov (Call 1-800-557-7394 for assistance)
- Complete the Federal Direct Data Loan Form
- Complete Debt Worksheet for Student Borrowers
- Complete the Rights and Responsibility Form
- Once forms are completed and submitted to Angelique Rodriguez she will then
- Schedule an In-Person counseling
If Returning borrower(s)
Please contact Connie Manzanares at firstname.lastname@example.org or by phone 505.747.2124
- MUST print loan history and loan servicer contact information form the National Student Loan Data System at www.nslds.ed.gov
- Complete Federal Direct Data Loan Form
- Complete Debt Worksheet for Student Borrowers
- Complete the Rights and Responsibility Form
The amount that you can borrow depends upon several factors:
- Dependency Status
- Borrowing History–borrowers without an outstanding loan balance who borrow after July 1, 2013 cannot exceed 150 percent of the published length of the borrower’s educational program.
- Calculated Estimated Family Contribution (EFC)
- Unmet need
- Class Standing (course levels must reflect class standing)
|Student Status||Direct Subsidized||Direct Unsubsidized||Total for the academic year|
|Junior/Senior in BA||$5,500||$7,000||$12,500|
WHAT IS THE INTEREST RATE?
Direct Loans have a fixed interest rate that differs depending on the loan type and other factors. Check the Direct Loan website here for details and current interest rate information.
HOW DO I APPLY?
- Complete Student Loan Application
- Complete Master Promissory Note and Entrance Loan Counseling here.
HOW IS LOAN MONEY DISBURSED?
- NNMC will disburse loans in two equal installments, generally, one in the fall term and one in the spring if loan requested is a two semester loan.
- Loan money must first be used to pay for any balance owed to NNMC, such as tuition, fees and textbooks. If loan funds remain, you will receive them by direct deposit.
- Loans that cover one term only will be disbursed in two equal amounts. In this case, you will receive your second check shortly after midterm.
WHEN DOES REPAYMENT BEGIN?
Direct Subsidized and Unsubsidized Loans have a 6-month grace period that starts the day after you graduate, leave school, or drop below half-time enrollment. You don’t have to begin making payment until your grace period ends. To learn more about repayment, visit here.
Student loan borrowers who graduate or cease to be enrolled at least half-time must complete an exit counseling session. You will need your FSA ID (username and password) to electronically sign the exit counseling. If you do not have an FSA ID, you may obtain it here.
Follow the steps below:
- Log into Student Loans
- Select Complete Counseling
- Complete Exit Counseling session and request information to be sent to
Northern New Mexico College, Española campus
Keep in mind that it is your responsibility to maintain contact with your lender. If you have a Direct Loan, your lender will be the Department of Education and you can contact your specific loan servicer at studentaid.ed.gov.
NEW MEXICO HIGHER EDUCATION DEPARTMENT LOAN FOR SERVICE PROGRAMS
The New Mexico Higher Education Department Financial Aid Division administers the following loan-for-service programs in an effort to attract teachers and nurses to provide service in the states neediest areas:
Teacher Loan-for-Service: The purpose of this loan is to increase the number of teachers in areas of the state that have experienced shortages. The award may not exceed $4,000 per year.
Nursing Loan-for-Service: The purpose of this loan is to increase the number of nurses in areas of the state which have experienced shortages. The award may not exceed $12,000 per year.
General Eligibility Requirements:
- New Mexico Resident
- Accepted into a Teaching / Nursing program at a NM public college or university
- U.S. citizen or eligible non-citizen
- Enrolled in at least six credit hours
- Demonstrate financial need
- For every year of service, a portion of the loan will be forgiven. If the entire service agreement is fulfilled, 100% of the loan is eligible for forgiveness. Penalties will be assessed if the service agreement is not satisfied.
HOW TO APPLY for Loan for Service Programs?
- Complete the Free Application for Federal Student Aid (FAFSA).
- Complete Loan-for-Service application. Print application or call 1-800-279-9777.
- Request school certification.
- Applications must be postmarked by July 1.
Send complete application to:
New Mexico Higher Education Department
Attn: Financial Aid Division
2048 Galisteo Street
Santa Fe, NM 87505-2100
BORROWERS RIGHTS AND RESPONSIBILITIES
As a student borrower it is important for you to understand your rights and responsibilities
It is your right:
- To have a grace period, to repay your loan without penalty,
- To request a copy of your MPN, (Master Promissory Note)
- To request documentation that your loan is paid in full,
- To choose a repayment plan,
- To be informed of your repayment date, and to be informed of and provide consent to any changes in the terms of your loan.
It is your responsibility:
- To complete an exit counseling session,
- To repay your loan,
- To notify your lender with current contact information,
- To make timely monthly payments,
- To notify your lender of your eligibility of a deferment or cancellation of loan and/or payments,
- To use proceeds of loans for educationally related purposes, and
- To make payment even if you do not receive a payment statement.
SATISFACTORY ACADEMIC STANDARDS
For continued student loan eligibility at Northern New Mexico College, a student must be in compliance with our schools Satisfactory Academic Progress Policies.
- A student must maintain at all times a 70% cumulative completion rate.
- A student must have a 2.0 cumulative grade point average.
- A student must be enrolled at least half time (6 credit hours).
STUDENT LOAN DEFAULT
Northern’s Financial Aid Office makes significant efforts in the areas of default prevention and debt management. Default prevention efforts and activities are important for all student loan participants. If you are a loan borrower and are having difficulty paying your student loans you should contact our office or your lender to avoid defaulting on your student loans.
DEFAULTED STUDENT LOAN RESOLUTION
A student loan will go into default when you fail to make payments and your account is 270 days delinquent. Once the loan is considered in default, the entire balance (principal, interest, and collection fees) is immediately due and payable.
If you default, it means you failed to make payments on your student loan according to the terms of your promissory note, the binding legal document you signed at the time you took out your loan. In other words, you failed to make your loan payments as scheduled. Your school, the financial institution that made or owns your loan, your loan guarantor, and the federal government all can take action to recover the money you owe.
Here are some consequences of default:
- Your default will be reported to all national consumer reporting agencies.
- You will be ineligible for additional federal student aid if you decide to return to school.
- You can be sued, take all or part of your state and federal income tax refunds and/or garnish your wages so that your employer is required to send us part of your salary to pay off your loan.
- You will lose eligibility for loan deferments.
- You will be required to pay reasonable collection fees and costs, plus court costs and attorney fees.
- You may be denied a professional license.
OPTIONS AFTER DEFAULT
- You can pay your loan in full. This is the fastest way to resolve your defaulted loan status.
- You can rehabilitate a loan by making 9 voluntary consecutive monthly payments on time. During rehabilitation you can regain eligibility for financial aid after making 6 voluntary consecutive monthly payments on time.
- You can consolidate by combining all your federal education loans. Consolidation is an option as long as the loans are currently in grace period or repayment status.
We have some tips to help you manage your money wisely and be a responsible student borrower.
- Create a spending budget.
- Remember that loan payments are fixed payments just like your rent, credit cards and store charge cards.
- Read all your mail and e-mails.
- Set up an online account with your lender/servicer. Many provide automatic notification options and apps for smartphones.
- Certain education costs can be used as tax benefits. You can also use your student loan interest as a deduction. Tuition and fees can be deducted too. Visit the IRS web site for more information.