Law School Discussion

Help me with my financial aid stuff, please?

CGEsq

Help me with my financial aid stuff, please?
« on: March 28, 2007, 07:50:04 AM »
Okay, I'm going to Loyola-Chicago.  Sending in my full seat deposit soon.  My financial award for the 2007-2008 academic year is as follows:

-$20,000 renewable merit scholarship
-$8500 subsidized Stafford
-$12,000 unsubsidized Stafford

=$40,500

Financial stuff goes over my head, so I want to check here and see if I'm doing this right.  The student budget is $53,000 for 2007-2008, and I applied at their website for $12,500 Citi Grad Plus Loan (to meet the student budget) and was approved online. 

Now as for the Stafford loans, I actually have to go to Citibank (Loyola's default lender) and apply, right?  I read the forms from Loyola and was confused, because one said that the loan awards are "considered accepted" unless I write back with changes, but another says that I have to apply to receive the funds, and wants me to write back confirming which lender I'm using for Stafford and private loans. 

So basically what I'm asking is: my private loan is covered, but do I go to Citibank online and apply for the Staffords that Loyola said I'm eligible for?  I just don't want to do anything horribly wrong because I never handled any of this stuff in undergrad, and it's like Swahili to me.

Thanks for your help!

Re: Help me with my financial aid stuff, please?
« Reply #1 on: March 28, 2007, 08:13:07 AM »
Schools can't make you choose one lender or another.  You're free to research lenders on your own and find what you think will be the best deal for you.  There was actually an article in the New York Times recently about how some schools get all sorts of perks for recommending certain lenders and making it seem like you can't take out loans from other sources, but don't be fooled.

Whatever lender you decide to go with, you need to notify the school and sign a Master Promissory Note (MPN).  This means your loans will automatically be disbursed from that provider for the three years you're in school and you don't have to worry about signing new promissory notes each year.  You might need to sign separate ones for your Stafford and private loans, though.  Check with the school to see if they handle the paperwork (they probably will if you go with Citi) or if you need to obtain the paperwork directly from the lender (will probably be the case if you go with a different company).  Once the MPN is signed and submitted to the loan company, they will make the school certify the loan (so you don't borrow more than the school allows).  Again, Loyola-Chicago will probably do this automatically if you choose Citi, but has to do it for any lender you want.

As far as private loans vs. GradPLUS, the difference is basically that GradPLUS is a different type of federal loan, while private loans are guaranteed by a private lender.  The interest rate is fixed on GradPLUS, and while you need to have decent credit to get one, the credit requirements aren't as strict as private loans.  If you have a co-signer (i.e. parent, spouse) and you both have excellent credit, you can sometimes get better interest rates with private loans than with GradPLUS.  For the majority of students, though, GradPLUS is the better option because we don't have the net worth or long credit history that bring down the private interest rates.

The financial aid office at L-C should be able to answer other questions for you - that's what they're there for.  Don't be afraid to use them.  Just don't let them talk you into signing anything you don't want to sign right away.

Re: Help me with my financial aid stuff, please?
« Reply #2 on: March 30, 2007, 06:34:09 AM »
Here's something I'm trying to figure out: How exactly does the remainder of the borrowing work? I have a $7K scholarship from Pace and the $20,500 in Staffords. The estimated cost of attendance there is $55,086 if I live in the campus dorm/apartment building, and I'll be putting in for Grad PLUS to cover the rest. Now, the school seemed to suggest I can borrow up to their cost of attendance but not less than that. I mean, what if I determine by the end of the first semester I can get by with a little less than that -- am I allowed to put in for an amount up to, say, $51K. Or am I stuck with the $55K level?

Also, how lenient are the GradPLUS lenders in terms of approving the loan. My credit has some bad stuff on it from a rogh patch a few years ago (credit card related, six months behind on undergrad student loan, a bogus tax lien I'm working to clear up). Will that screw me?     

Re: Help me with my financial aid stuff, please?
« Reply #3 on: March 30, 2007, 07:34:37 AM »
I'm not sure exactly what the credit requirements are.  Your best bet would be to call the lender you're interested in using and speak to a customer service rep.  They should be able to help you out.

Loans are disbursed in two chunks - one in August/September and the other in January.  The school can't make you borrow more than you want to - if you are sure that you could get by on less than the cost of attendance, you can borrow less.  I've been told that you can request to borrow less and then increase your loan up to the COA if you find that you need to, but I'm not 100% sure how this works.  I also don't know if you can change your loan disbursement amount for second semester (i.e. you have $5K left over from first semester's loans so you want to borrow $5K less in January).  Again, someone who works for a lender could probably tell you this.  My plan is to borrow the full amount for 1L and see how it works out, and then borrow less for 2L and 3L if possible.

Re: Help me with my financial aid stuff, please?
« Reply #4 on: March 30, 2007, 08:41:12 AM »
Thanks.

That's my plan to, actually, to borrow the $48K or so I'll need to the first year and then to work during the summers and the last four semesters to see if I can pay for food, utilities and the such at the very least.

Re: Help me with my financial aid stuff, please?
« Reply #5 on: March 31, 2007, 02:02:11 AM »
Here's something I'm trying to figure out: How exactly does the remainder of the borrowing work? I have a $7K scholarship from Pace and the $20,500 in Staffords. The estimated cost of attendance there is $55,086 if I live in the campus dorm/apartment building, and I'll be putting in for Grad PLUS to cover the rest. Now, the school seemed to suggest I can borrow up to their cost of attendance but not less than that. I mean, what if I determine by the end of the first semester I can get by with a little less than that -- am I allowed to put in for an amount up to, say, $51K. Or am I stuck with the $55K level?

Also, how lenient are the GradPLUS lenders in terms of approving the loan. My credit has some bad stuff on it from a rogh patch a few years ago (credit card related, six months behind on undergrad student loan, a bogus tax lien I'm working to clear up). Will that screw me?

The tax lien will mess you up...

"To get a PLUS loan, the applicant cannot have adverse credit based on the review of at least one credit report from a national credit reporting agency. Lack of a credit history or insufficient credit history is not considered adverse credit. Current regulations define adverse credit as when at least one of the following applies to the applicant:

currently 90 days or more delinquent on repayment of any debt;
has had debt discharged in bankruptcy during the past five years; or
evidence of a default, foreclosure, tax lien, repossession, wage garnishment, or write-off of a Title IV debt during the past five years.

If the applicant has adverse credit, he or she can provide an endorser (cosigner) who does not have adverse credit to get a PLUS loan."