2016-2017 Walden University Student Handbook (March 2017) 
    
    Jun 30, 2022  
2016-2017 Walden University Student Handbook (March 2017) [ARCHIVED CATALOG]

Federal Direct Loans


Return to: Federal Programs  

Federal Direct Subsidized Loans are need-based loans available only to undergraduate students. The U.S. Department of Education pays the interest on this loan while the student is enrolled at least half time in school. Students typically have a 6-month repayment grace period for all federal loans. A grace period is a period of time that generally begins on the day after a borrower graduates, leaves school, or drops below half-time enrollment and usually ends six months later. A borrower is not required to make payments during the grace period for both subsidized and unsubsidized loans made under the Direct Loan program.

Federal Direct Unsubsidized Loans are available to undergraduate and graduate students and are not need-based. The student pays the accruing interest while enrolled in school, unless the student arranges to postpone the interest payment by checking the appropriate box on the Master Promissory Note or contacting their servicer. If you are unsure, you can determine who your servicer is by going to NSLDS. Students should be careful when choosing this option since it means that the interest will be capitalized (the accrued interest will be added to the principal amount), increasing the amount of the debt.

Federal Direct Unsubsidized Loans are available to undergraduate and graduate students and are not need-based. The student pays the accruing interest while enrolled in school, unless the student arranges to postpone the interest payment by checking the appropriate box on the Master Promissory Note or contacting their servicer. If you are unsure, you can determine who your servicer is by going to NSLDS. Students should be careful when choosing this option since it means that the interest will be capitalized (the accrued interest will be added to the principal amount), increasing the amount of the debt.

The interest rates for undergraduate subsidized and unsubsidized Direct Loans disbursed on or after July 1, 2016 through June 30, 2017 are fixed at 3.76%.

The interest rates for undergraduate subsidized and unsubsidized Direct Loans disbursed on or after July 1, 2017 through June 30, 2018 are fixed at 4.45%.

The interest rates for graduate unsubsidized Direct Loans disbursed on or after July 1, 2016 through June 30, 2017 are fixed at 5.31%.

The interest rates for graduate unsubsidized Direct Loans disbursed on or after July 1, 2017 through June 30, 2018 are fixed at 6.00%.

Most federal student loans have loan fees that are a percentage of the total loan amount.  The loan fee is deducted from each loan disbursement you receive. Even though this means the money a student receives will be less than the amount he or she actually borrowed, the student is still responsible for repaying the entire amount of the borrowed loan.

Direct subsidized and unsubsidized loans first disbursed on or after October 1, 2016 and before October 1, 2017 have a 1.069% loan fee. Direct subsidized and unsubsidized loans first disbursed on or after October 1, 2017 and before October 1, 2018 have a 1.066% loan fee.

Creditworthiness is not a requirement to obtain a Direct Loan (subsidized or unsubsidized). Under this program, students may borrow up to their maximum annual loan limit every award year (i.e., 9 months for quarter-based programs, 12 months for semester-based programs). Loan funds can be used to cover direct education costs such as tuition, fees, and room and board, as well as indirect costs, such as books and other education-related expenses.

Federal Direct Loans borrowed while enrolled at another institution may impact a student’s loan eligibility at Walden University. Before any funds are disbursed, students must read important disclosure information regarding their student loan(s). The Disclosure Statement provides information about the Direct Subsidized Loan and/or Direct Unsubsidized Loan that Walden University plans to disburse (pay out) by crediting the student’s school account, paying the student directly, or both. There is also a Plain Language Disclosure that will explain the terms of the loan(s). Both disclosures are available at www.studentloans.gov. Walden encourages students to keep a copy of all disclosures for their records. All information submitted for the purpose of securing a federal student loan will be submitted to the National Student Loan Database (NSLDS) and are accessible by authorized agencies, lenders, and institutions. The student loan borrower is responsible for knowing the total amount of federal loans borrowed and can see a summary of their federal loan debt via NSLDS.

On August 2, 2011, Congress passed the Budget Control Act of 2011, which put into place automatic federal budget cuts, known as a “sequester.”  To find out more information, please visit https://studentaid.ed.gov/sa/about/announcements/sequestration.

Entrance Counseling

First-time borrowers are required to complete Direct Loan entrance counseling prior to receiving the first disbursement of a federal Direct Loan. Federal Direct Loan counseling is completed online at www.studentloans.gov and will help students understand their rights and obligations as a student loan borrower. Loan counseling is mandatory and must be completed before students can receive loan funds.

Annual Loan Limits vs. Lifetime Aggregate Loan Limits

Annual Loan Limits

The federal government limits the total and annual amount of Federal Direct Loan(s) that students can borrow. Walden University defines its annual award year as three quarters or three semesters for course-based programs. For Tempo Learning Programs, the annual borrowing limit is based on the minimum weeks and semester equivalencies in the program’s financial aid academic year and students cannot borrow a new annual loan limit until both requirements are met. Walden defines the academic year for the Tempo Learning Master’s program as 52-weeks and 16.5 semester credit equivalencies and 52-weeks and 15 credits for Tempo Learning certificate programs.  Students cannot exceed the annual Direct Loan maximums in the award year. Loans borrowed at a prior institution can impact the student’s eligibility at Walden. The Office of Financial Aid may ask students to provide additional information about prior loans in order to process new loans at Walden.

Federal Direct Subsidized Loans

Undergraduate annual borrowing ranges from $3,500 to $5,500 depending on year in school and EFC.

Time Limitation on Direct Subsidized Loan Eligibility for First-Time Borrowers on or After July 2013

The federal government has placed a new time limit on Federal Direct Subsidized Loans for first- time borrowers on or after July 1, 2013. A first-time borrower is someone with no outstanding student loan debt as of July 1, 2013. In general, a first-time borrower may not receive Federal Direct Subsidized Loans for more than 150% of the published length of the bachelor’s degree or undergraduate certificate programs as measured in academic years. This is called the “maximum eligibility period.” For the Walden bachelor’s degree programs, the Federal Direct Subsidized Loan maximum eligibility period is 6.5 academic years. For the Undergraduate Certificate in Homeland Security, the limit is 1.5 academic years. An academic year is 3 quarters. Prior subsidized usage will count toward the students’ maximum.

Federal Direct Unsubsidized Loans

  • Undergraduate annual borrowing ranges from $5,500–$12,500 (less Direct Subsidized Loan eligibility) depending on year in school and dependency status.
  • Graduate student annual borrowing maximum is $20,500.
  • Teacher Preparation Students or Endorsement Students who do not choose the MS degree option have a borrowing maximum of $12,500.
  • Students Enrolled in Preparatory Courses for the Master of Science in Nursing (MSN) have a borrowing maximum of $12,500.

All graduate student loans are unsubsidized for loan periods that began on or after July 1, 2012.

Graduate PLUS Loans and Parent PLUS Loans

These loans are also processed based on three quarters or three semesters per award year. They are limited annually by the cost of attendance minus any financial aid received.

Lifetime Aggregate Loan Limits

The federal government limits the aggregate amount of Federal Direct Loans that students can borrow in their lifetime. The lifetime aggregate limits for federal student loans (Federal Family Education Loan (FFEL) Program and Direct Loans) are as follows:

  • Graduate students: $138,500 combined (only $65,500 may be subsidized; includes amounts borrowed as an undergraduate student).
  • Dependent undergraduate students: $31,000 combined (only $23,000 may be subsidized).
  • Independent    undergraduate   students: $57,500   combined   (only   $23,000   may   be subsidized).
  • Parent PLUS Loans and Graduate PLUS Loans do not have a lifetime maximum.

Student loan borrowers are responsible for knowing the total amount of federal loans they have borrowed. Having sufficient remaining eligibility is important to a student’s ability to successfully complete his or her academic program. A summary of each student’s federal loan debt is available via National Student Loan Data System (NSLDS).

Exceeding Annual or Aggregate Loan Limits

The Student Aid Report (SAR) may indicate that a student has inadvertently borrowed in excess of the Federal Direct Loan limits. For example, a prior institution may have inadvertently allowed a student to borrow federal undergraduate loans in excess of undergraduate limits while not exceeding the graduate loan limits. Before Walden can award graduate-level Federal Direct Loans to the student, the student must reaffirm the debt by either consolidating the prior loans that exceed the limits or by obtaining a reaffirmation letter from the holder of the loans. Another example would be if a prior institution inadvertently allowed a student to exceed graduate loan limits. Before Walden can award Federal Graduate PLUS Loans, the student must reaffirm the debt by either consolidating the prior loans that exceed the limits or by obtaining a reaffirmation letter from the holder of the loans.

Undergraduate Students: Direct Loan Maximums*

Grade Level

Dependent Undergraduate Student

Independent Undergraduate Student

Year 1* (0–44 cr.) $5,500—Up to $3,500 of this amount may be in subsidized loans. $9,500—Up to $3,500 of this amount may be in subsidized loans.
Year 2* (45–89 cr.) $6,500—Up to $4,500 of this amount may be in subsidized loans. $10,500—Up to $4,500 of this amount may be in subsidized loans.
Years 3–4* (90+ cr.) $7,500—Up to $5,500 of this amount may be in subsidized loans. $12,500—Up to $5,500 of this amount may be in subsidized loans.
Lifetime Maximum Total Debt from Stafford and Direct Loans (in each status) $31,000—Only $23,000 of this amount may be in subsidized loans. $57,500—Only $23,000 of this amount may be subsidized loans.

*Dependent undergraduate students whose parents have been denied a Federal Parent Loan are eligible to borrow at the independent undergraduate level. Students in undergraduate certificate programs or who are in the last two terms of their academic program may be eligible for reduced amounts due to required prorating.

Graduate Students: Direct Loan Maximums

Time frame

Graduate (Master’s, EdS, Doctoral, Post- Doctoral,Graduate Certificate) Students

 

 

Teacher Preparation Students or Endorsement Students Who Do Not Choose the MS Degree Option

Students Enrolled in Preparatory Courses for the Master of Science in Nursing (MSN)

 

    Dependent Students Independent Students Dependent Students Independent Students
Per Academic Year

$20,500

$7,500—Up to $5,500 of this amount may be in subsidized loans.

Note: Students are eligible for this loan for one consecutive 12-month period.

$12,500—Up to $5,500 of this amount may be in subsidized loans.

Note: Students are eligible for this loan for one consecutive 12-month period.

$7,500—Up to $5,500 of this amount may be in subsidized loans.

Note: Students are eligible for this loan for one consecutive 12-month period.

$12,500

Note: Students are eligible for this loan for one consecutive 12-month period.

Lifetime Maximum Total Debt From Direct Loans

$138,500—Only

$65,500 of this amount may be subsidized loans.

Note: The graduate debt limit includes Stafford Loans received for undergraduate study.

$31,000—Only

$23,000 of this amount may be subsidized loans.

$57,500—Only

$23,000 of this amount may be subsidized loans.

$31,000—Only

$23,000 of this amount may be subsidized loans.

$57,500—Only

$23,000 of this amount may be subsidized loans.

Exit Counseling

To help students manage their student loans after graduation, federal regulations also require that they complete exit loan counseling. Exit loan counseling is available online at https://studentloans.gov/myDirectLoan/counselingInstructions.action.

The timing to complete an Exit Counseling form is:

  • Before graduation.
  • Before transferring to another institution.
  • Before withdrawal and leaves of absence.
  • When enrolled less than half time.

Federal Student Loan Repayment Plans

Federal Direct and Stafford Loans offer several repayment plan options. Some of the options carry a lower monthly payment than standard repayment, but choosing these other options extends the term of the loan and increases the total amount of interest paid during the life of the loan. Learn about the various options and your ability to move between plans by visiting http://studentaid.ed.gov/repay-loans.

Repayment Estimator is a tool that William D. Ford Federal Direct Loan (Direct Loan) and Federal Family Education Loan (FFEL) program borrowers can use to obtain preliminary repayment plan eligibility information and estimated repayment amounts. This easy-to-use tool offers borrowers the opportunity to obtain preliminary repayment information across all of the repayment plans. Its advantage over repayment plan-specific calculators is that it provides side- by-side results for all plans and information about the total cost of a loan over time.

The new Repayment Estimator is available for borrower use at the following website: https://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimator.action.

  1. Standard Repayment. On a standard repayment plan, a borrower pays a fixed monthly amount for a loan term of up to 10 years (up to 30 years for Consolidation Loans), with a $50 minimum monthly payment.
  2. Extended Repayment. Extended repayment is like standard repayment, but allows a loan term of up to 25 years, depending on the total amount borrowed. Stretching out the payments over a longer term reduces the size of the monthly payment, but increases the total amount repaid during the life of the loan.
  3. Graduated Repayment. Unlike standard and extended repayment plans, graduated repayment starts off with lower monthly payments, which gradually increase every two years. The loan term is up to 10 years (up to 30 years for Consolidation Loans), depending on the total amount borrowed. The monthly payment must be at least $25 and will amount to at least the interest accruing.
  4. Driven Repayment Plans (IDR). Choosing any of these plans involve using a percentage of your discretionary income. The percentage is different depending on the plan. IDR plans usually lower your federal student loan payments; however you may increase your repayment period resulting in higher interest cost over the repayment period.
    • Income-Based Repayment. Income-based repayment extends the term for up to 20 years for new borrowers on or after July 1, 2014 and 25 years for borrowers prior to July 1, 2014and also bases the monthly repayment amount on the borrower’s discretionary income. The payment resets annually and caps the monthly payments at a lower percentage of income than income-contingent repayment. If income is low enough, the interest that accrues is waived for a fixed period of time. At the end of 25 years, any remaining balance on the loan will be forgiven and the amount forgiven is taxable.
    • Income-Contingent Repayment. This plan applies only to Federal Direct Loans. Monthly payments are based on the borrower’s income and total amount of debt. Payments are adjusted each year as the borrower’s income changes. The loan term is up to 25 years. At the end of 25 years, the remaining balance on the loan will be forgiven, and the amount forgiven is taxable. A $5 minimum monthly payment is required.
    • Income-Sensitive Repayment.This plan is an alternative to Income-Contingent Repayment and is only for loans serviced by lenders in the Federal Family Education Loan Program (FFELP). Monthly payments are based on annual income and borrowers are usually required to provide financial documents.  In addition, borrowers must reapply for this repayment plan annually. The loan term is up to 15 years.
    • Pay As You Earn (PAYE). Borrowers with eligible student loans may qualify for this program, depending on their debt ratio. Monthly payments are based off of the borrower’s discretionary income and payments are recalculated annually.  There are interest payment benefits, limitation on capitalization of interest and loan forgiveness, if the borrower qualifies. Borrowers should speak with their loan servicer for more information on this program.
    • Revised Pay As You Earn (REPAYE). This new plan started December of 2015.  This program extends the term for up to 20 years for undergraduate loans and 25 years for graduate loans, also bases the monthly repayment amount on the borrower’s income, resets annually, and caps the monthly payments at a lower percentage of income than income-contingent repayment. At the end of 20 for undergraduate or 25 years for graduate, any remaining balance on the loan will be forgiven, and the amount forgiven is taxable. Please contact your servicer for more eligibility requirements.

Loan Deferments

Under certain circumstances, an enrolled borrower is entitled to have the repayment of a loan deferred. During deferment, the borrower is not required to pay loan principal, and interest on subsidized loans does not accrue. After the in-school deferment, the borrower is entitled to one grace period of 6 consecutive months. The date that the deferment starts may affect the length of the grace period.

Students who have a valid Social Security number on file at Walden will have their enrollment here reported and updated monthly with the National Student Clearinghouse (NSC). The NSC communicates electronically with the federal and non-federal loan servicers to insure that students who remain enrolled maintain the in-school deferments for which they are eligible.

Walden’s Loan Deferment Policy

Students who seek to defer repayment of their prior student loans and do not want to rely on the electronic exchange with the NSC must fill out forms to have their enrollment status verified. Students must get the forms from their lender(s) and send them directly to:

Walden University, Office of the Registrar

Attn: Loan Deferment

7065 Samuel Morse Drive, Columbia, MD 21046

Fax: 1-410-209-8044

At the top of the form, students should include their enrollment start date and the term for which they are requesting an in-school deferment.

Note: Any deferment paperwork sent to Walden’s Office of the Registrar for enrollment verification is forwarded to the NSC on a weekly basis.

Federal Direct Graduate PLUS Loans

Federal Direct Graduate PLUS loans are available to graduate students enrolled at least half time who do not have an adverse credit history. Students may borrow up to the cost of attendance minus any other financial aid received. The total education cost may include tuition, living allowance, books and supplies, and transportation. Graduate students must use their Federal Direct Unsubsidized loan eligibility prior to applying for a Federal Direct Graduate PLUS loan.

Federal Direct Graduate PLUS loans disbursed on or after July 1, 2016 through June 30, 2017 have an interest rate fixed at 6.31%, with interest beginning to accrue upon disbursement.

Federal Direct Graduate PLUS loans disbursed on or after July 1, 2017 through June 30, 2018 have an interest rate fixed at 7.00%, with interest beginning to accrue upon disbursement.

Federal Direct Graduate PLUS loans first disbursed on or after October 1, 2016 and before October 1, 2017 have a 4.276% loan fee. Federal Direct Graduate PLUS loans first disbursed on or after October 1, 2017 and before October 1, 2018 have a 4.264% loan fee.

Loan fees are retained by the federal government to reduce the cost of supporting these low interest loans.

Process

  • If one has not been submitted for the current year, the student completes the Free Application for Federal Student Aid (FAFSA) online at http://www.fafsa.gov/.
  • Student completes the Direct Graduate PLUS Loan Request, Direct Graduate PLUS Master Promissory Note (MPN), and Graduate Level Direct Loan Entrance Counseling. All forms are available online at http://www.studentloans.gov/.

The Office of Financial Aid receives the Approved/Endorsed Graduate PLUS Loan Record and the Direct Graduate PLUS MPN from the U.S. Department of Education (ED) and adds the Graduate PLUS award to myFinAid.

  • Student goes to myFinAid to accept, reduce, or decline the Graduate PLUS award amount.
  • If student is registered and all official transcripts are on file with the Office of Admissions, the Office of Financial Aid sends a Direct Graduate PLUS Loan origination record to ED.

Decisions

The U.S. Department of Education is responsible for all Graduate PLUS loan credit decisions. Graduate PLUS loan borrowers are required to pass a simplified credit check, meaning that the U.S. Department of Education is not looking for a certain credit score or for an extensive credit history, but simply the absence of an adverse credit history.

Students can view the status of their application by logging in to www.studentloans.gov or by calling Federal Direct Loans at 1-800-557-7394. Effective March 29, 2015 credit decisions are held for 180 days.

Federal Direct Parent Loans for Undergraduate Students (PLUS)

Federal PLUS loans are available to all parents of dependent undergraduate students regardless of income. Qualification is based solely on good credit. You must be the student’s biological or adoptive parent or the student’s stepparent, if the biological or adoptive parent has remarried at the time of application. Your child must be a dependent student who is enrolled at least half-time at Walden. There are no debt-to-income ratio guidelines or employment verification requirements. Parents may borrow up to the total education cost for the year, minus any other financial aid that the student is receiving. The total education cost can include tuition and fees, room and board, books and supplies, transportation, and living allowance.

Federal Direct Parent PLUS loans disbursed on or after July 1, 2016 through June 30, 2017 have a fixed interest rate at 6.31%, with interest beginning to accrue upon disbursement until it is repaid in full.

Federal Direct Parent PLUS loans disbursed on or after July 1, 2017 through June 30, 2018 have a fixed interest rate at 7.00%, with interest beginning to accrue upon disbursement until it is repaid in full.

Federal Direct Parent PLUS loans first disbursed on or after October 1, 2016 and before October 1, 2017 have a 4.276% loan fee.  Federal Direct Parent PLUS loans first disbursed on or after October 1, 2017 and before October 1, 2018 have a 4.264% loan fee.

The loan fee is retained by the federal government to reduce the cost of supporting these low interest loans.

Federal Direct Parent PLUS loan repayment normally begins within 60 calendar days after the loan has been fully disbursed. In certain circumstances, parents may elect to repay the loan on a graduated repayment schedule, making interest-only payments (the minimum amount is based on the term of the loan and must be at least $50 per month) for a portion of the repayment term.

Process

The student   completes   the   Free   Application   for   Federal   Student   Aid   (FAFSA) at http://www.fafsa.gov/ if one has not been submitted for the current year.

The parent completes the Parent PLUS Loan Request and Parent PLUS Master Promissory Note (MPN), and the student completes undergraduate-level Direct Loan Entrance Counseling. All forms are available online at http://www.studentloans.gov/.

The Office of Financial Aid receives the Direct Parent PLUS MPN and the approved/endorsed Parent PLUS Loan Record from the U.S. Department of Education (ED) and adds the Parent PLUS award to myFinAid.

The student goes to myFinAid to accept, reduce, or decline the Parent PLUS award amount.

If the student is registered and all official transcripts are on file with the Office of Admissions, the Office of Financial Aid sends a Direct Parent PLUS Loan origination record to ED.

Decisions

The Department of Education is responsible for all Parent PLUS loan credit decisions. Parent PLUS loan borrowers are required to pass a simplified credit check, meaning that the U.S. Department of Education is not looking for a certain credit score or for an extensive credit history but simply the absence of an adverse credit history. Students can view the status of their parents’ application by logging in to www.studentloans.gov or by calling Federal Direct Loans at 1-800-557-7394. Effective March 29, 2015 credit decisions remain valid for 180 days.

Federal Student Aid (FSA) Student Loan Ombudsman

The Walden Office of Financial Aid is always ready to assist with any questions or concerns regarding student loans. If loan issues cannot be resolved, the FSA Student Loan Ombudsman for student loan issues is available. An ombudsman resolves disputes from a neutral and independent viewpoint. The FSA Student Loan Ombudsman Group will informally research a borrower problem and suggest solutions to resolve the problem. Student borrowers can contact the FSA Student Loan Ombudsman Group via the following:

Online assistance: http://studentaid.gov/repay-loans/disputes/prepare

Toll-free telephone: 1-877-557-2575

Fax: 1-606-396-4821

 

Mail: U.S. Department of Education

FSA Ombudsman Group

P.O. Box 1843

Monticello, KY 42633

Private Education Loans

Comparing Private Loans and Federal Loans

Private education loans may have significant disadvantages when compared with federal education loans. We strongly encourage students to first borrow any federal loans for which they are eligible. The chart below will help in understanding the differences between federal and private loan funds.

Comparison Chart of Federal and Private Education Loans*

Credit Check Required? Federal Loans Private Loans

Credit Score or Debt-to-Income Considered?

Co-Signer Required?

Direct Loan: No

PLUS/GradPLUS: Yes (limited)

Yes

Direct Loan: No

PLUS/GradPLUS: Yes

Yes

Direct Loan: No

PLUS/GradPLUS: Usually no

Usually yes
Deferment Options Several options Depends on Lender
Grace Period Direct Loan: 6 months Depends on Lender
 
  • Undergraduate—The interest rates for undergraduate subsidized and unsubsidized Direct Loans disbursed on or after July 1, 2016 through June 30, 2017 are fixed at 3.76%.
  • The interest rates for undergraduate subsidized and unsubsidized Direct Loans disbursed on or after July 1, 2017 through June 30, 2018 are fixed at 4.45%.
  • The interest rates for graduate unsubsidized Direct Loans disbursed on or after July 1, 2016 through June 30, 2017 are fixed at 5.31%.
  • The interest rates for graduate unsubsidized Direct Loans disbursed on or after July 1, 2017through June 30, 2018 are fixed at 6.00%.
  • The interest rate for Direct PLUS Loans (Parent and Grad/Prof Student) disbursed on or after July 1, 2016 through June 30, 2017 is fixed at 6.31%, with interest beginning to accrue upon disbursement.
  • The interest rate for Direct PLUS Loans (Parent and Grad/Prof Student) loans disbursed on or after July 1, 2017 through June 30, 2018 is fixed at 7.00%, with interest beginning to accrue upon disbursement.
Usually variable
Loan Fees
  • Both the subsidized and the unsubsidized Direct Loans disbursed on or after October 1, 2016 and before October 1, 2017 have a 1.069% loan fee.
  • Both the subsidized and the unsubsidized Direct Loans disbursed on or after October 1, 2017 and before October 1, 2018 have a 1.066% origination fee.
  • Federal Direct PLUSLoans (Parent and Grad/Prof Student) loans disbursed on or after October 1, 2016 and before October 1, 2017 have a 4.276% loan fee.
  • Federal Direct PLUS/Graduate PLUS loans disbursed on or after October 1, 2017 and before October 1, 2018 have a 4.264% origination fee.
 
Flexible Repayment Options Many options available Generally none
Loan Forgiveness Options Several options available Generally none
Penalties for Early Repayment None Depends on lender

*Applies to loans first disbursed on or after July 1, 2017 through June 30, 2018.

**Rates adjust annually

   

Choosing a Private Loan

When choosing a private education loan, students should compare the loan terms offered by several lenders in order to choose the best fit for their situation. A resource for finding active private education loan programs is www.elmselect.com.When choosing a lender, borrowers should make sure that Walden University is a participating school in their loan program

Several points that should be researched when considering a private loan:

  • What is the interest rate? Is it fixed or variable? Is the rate capped?
  • What fees must be paid for this loan and when are they paid?
  • How will the student receive loan funds?
  • When does repayment begin, and is there a grace period?
  • What will the monthly payment be?
  • What will be the total cost if the student uses the full repayment period?
  • Are there penalties for early repayment?
  • Are there deferment, forbearance, or cancellation options?

Most private loan programs require the Office of Financial Aid to certify a student’s eligibility before approving the loan. If students receive financial aid, they must notify the Office of Financial Aid of any private loans they borrow, as it may affect their aid eligibility.

Truth in Lending Act

Under the Federal Truth in Lending Act (TILA), the lender must provide the following documents:

  • Private Education Loan Applicant Self-Certification Form: Students must complete this form and return it to the lender before receiving their first disbursement of loan funds.
  • Federal Direct Loan Disclosure Statement and Right-to-Cancel Period: After the student signs the promissory note, the Federal Direct Loan Disclosure Statement confirms the terms and conditions of the loan. At the time that this disclosure is delivered, the “right-to-cancel” period begins. During this period of three to six days, the student may cancel the loan by contacting the lender. The lender cannot release the first disbursement of the loan funds until the end of the right-to-cancel period.

State Grant Aid

Some states have a reciprocity policy for their state grants.

Check with the appropriate state agency as indicated here: http://wdcrobcolp01.ed.gov/Programs/EROD/org_list.cfm?category_ID=SHE