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. Visit studentaid.gov to learn more about federal student loan programs and repayment options.
TYPES OF LOANS
A. Federal Direct Student Loans
These low-interest loans for students and parents are offered through the U.S. Department of Education. Direct loans can be subsidized or unsubsidized:
- Subsidized loans are awarded based on financial need. If you qualify, the federal government pays interest on the loan until you begin repayment. Loan proceeds are disbursed in two equal installments credited to your CIA student account.
- Unsubsidized loans do not require a demonstration of financial need. If you qualify, you will be charged interest from the time the loan is disbursed until it is paid in full. You can choose to pay the interest or allow it to accumulate. If you allow the interest to accumulate, it will be capitalized—that is, the interest will be added to the principal amount of your loan and will increase the amount you have to repay. If you pay the interest as it accumulates, you will repay less in the long run.
Direct Loan amounts for dependent students:
- Degree program freshmen can borrow up to $5,500 (including up to $3,500 Subsidized).
- Degree program sophomores can borrow up to $6,500 (including $4,500 Subsidized).
- Juniors, seniors, and students in the undergraduate certificate program can borrow up to $7,500 (including $5,500 Subsidized).
Dependent undergraduate students whose parents are unable to borrow a Federal Direct PLUS due to adverse credit can receive an additional $4,000 in Unsubsidized Loan funds.
Direct Loans—amounts for independent students (typically 24 years old or older)
- Degree program freshmen can borrow up to $9,500 (including up to $3,500 Subsidized).
- Degree program sophomores can borrow up to $10,500 (including up to $4,500 Subsidized).
- Juniors, seniors, and students in the undergraduate certificate program can borrow up to $12,500 (including $5,500 Subsidized).
* If you have a Federal Direct Loan, the loan will be submitted to the National Student Loan Data System and be accessible by guaranty agencies, lenders, and institutions determined to be authorized users of the data system. For more information, visit studentaid.gov.
B. Federal Direct Parent Loan for Undergraduate Students (PLUS) Loan
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.
REQUIREMENTS FOR ALL STUDENT LOANS
- 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 declared in the Admission's & Recruitment Office
- Be making Satisfactory Academic Progress (SAP) – Link to SAP pagehttps://nnmc.edu/home/student-gateway/financial-aid/satisfactory-academic-progress/
- 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)
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 state’s 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
- 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.
- 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.