Federal Aid

How do I apply for a Federal student loan?
You must complete the FAFSA (http://www.fafsa.ed.gov) to be eligible for any Federal student aid.  You must also be accepted to a degree seeking academic program at Beacon College.  Once we receive the electronic FAFSA record for a new or transferring undergraduate, and confirm admission status, our counselors prepare the student’s financial aid “package.”  If eligible for a subsidized and/or unsubsidized Stafford loan, the maximum eligible loan amounts will be offered to the student in the financial aid “package.”  The student must then accept the offered loan and complete an Entrance Interview and complete a Master Promissory Note (MPN).

Beginning with the 2010-2011 Academic Year, both the Entrance Interview and the MPN must be completed on the Federal Department of Education website StudentLoans.gov – even if the student previously had a Federal student loan provided by a commercial bank.

The parents of undergraduate students can also take a Federal education loan, the Parent PLUS. The Parent PLUS loan is subject to a credit check, but if the parent cannot pass the credit check, their student will become eligible for an increased Stafford loan (unsubsidized).  For particulars about a Parent PLUS loan application, see the Loan Providers list for Federal PLUS Loans on this website.

What is the difference between Subsidized and Unsubsidized Stafford Loans?
The Federal Stafford Loan program includes two different loans. The subsidized loan is need-based and eligibility is based on information provided in the FAFSA.  The government pays the loan interest while the student remains in school and maintains at least a half-time class load.  The unsubsidized loan is available to students who do not meet the FAFSA needs test.  The student is responsible for all interest on unsubsidized loans beginning on the date of each incremental loan disbursement.  When the student signs a Master Promissory Note with Department of Education (DOE), the options of paying the interest while in school or adding the in-school interest to the loan principle will be offered to the student.

I have been offered a certain amount in loans but I only want to take a portion of what I have been offered. Can I do that?
Yes, however keep in mind that the amount offered is normally for both the Fall and Spring semesters and Federal regulations dictate that the amount be disbursed in two payments at the beginning of each semester.

If you choose a lesser amount and later find that you need more, just ask the Financial Aid Office to make an application for your remaining eligibility.  Another option is to obtain the whole amount for Fall and then reassess your needs for the Spring semester.  If you find you will not need all of the scheduled Spring amount, just ask the Financial Aid Office to reduce your Spring disbursement.  It is best to do such changes soon after the Thanksgiving break.

Why is the amount I received from my loans not exactly what I asked to borrow?
Private student loans are also subject to up front fees, but these fees are not regulated by the Federal government.  That is one reason it is always best to take full advantage of Federal student loans before considering a private loan.

The Federal Government, instead of a commercial bank or credit union, is the lender for loans made under the Federal Direct Loan program.  These loans also have a Loan Origination Fee that may vary from year to year. The Fee for loans with a first disbursement after July 1, 2010 is 1.0%, but it is offset by a 0.5% up-front interest rebate, predicated on the student making on-time payments when repayments begin.  Consequently, you should plan for 0.5% of the total loan to go towards fees and not be available for education expenses.

What is an Entrance Interview?
The Entrance Interview is a requirement associated with each type of Federal student loan. The process provides the student with information about legal financial obligations that many students will undertake for the first time in their lives. You must complete this requirement before your loan will pay into your student account.  The good news is that you can conveniently satisfy your requirement on the web. For Federal Direct Loans, go to https://StudentLoans.gov.

What is an Exit Interview?
The Exit Interview is another Federal student loan requirement that applies when you withdraw from school or graduate.  It is a refresher course about the student’s legal financial obligation.  The Exit Interview also provides information about the student’s rights and options and it seeks updated contact information from the student.