Loan Assumptions For Financial Reality Check To Apply FAFSA
"Loan Assumptions For Financial Reality Check To Apply FAFSA" submitted by SchoolGrantsfor Editorial Team and last updated on Monday 9th January 2012
Certain assumptions about loans were made to accommodate the calculations in the Loan Reality Check section. The money-saving options assume certain characteristics about the loan information, enabling estimates to be derived.
Students interested in participating in a loan assumption program must complete a 2009–10 Free Application for Federal Student Aid (FAFSA) in order to receive an offer of financial aid. Students must have education loans to take part in any of the loan assumption programs. Read more details about: The Assumption Program of Loans for Education (APLE)
The calculation assumptions for each option can be found below:
- The "borrow less" calculation only applies to anticipated loans (only loans that are not checked "existing").
- Total principal of all other loans is calculated.
- If the "borrow less" amount is greater than all loans, the amount is reduced to equal total principal.
- The full "borrow less" amount is subtracted from the loans identified in the loan hierarchy that should be paid down or paid off first.
- Any remaining amount would be applied to all the other loans.
Pay As You Go
- Money paid only affects the three loans identified in the Loan Hierarchy.
- The accrual period for subsidized loans is zero.
- The accrual period for other loans is the difference between disbursement date and graduation date plus the appropriate grace period for the loan type.
- If the loan is identified as "existing," the disbursement date taken is the current date.
- Monthly payments continue according to the user entered data until the payments equal the entered months, the total accrual period is met, or until the loan is paid in full, depending on which occurs first.
- Simple interest is accounted for during transactions.
Learn more about Pay As You Go
All remaining money-saving options take place after the above calculations have been made.
Good Payer Incentives
- Good Payer Incentive savings apply to all Stafford loans.
- Interest rates are reduced by 1¼% after six months and an additional 2% after 54 months from the start of repayment.
Payments are carried out until the indicated number of years is met, or until the loan is paid in full.
Adjustments are made to user data if the loan is liquidated before the number of entered payments is reached.
- The extra payment is applied at the start of each year.
- Any extra amount paid is applied each month.
- Good Payer Incentives and Accelerated Payments are calculated simultaneously, as they have a profound effect on each other.
- Rounding errors may occur in calculations
Cost Of Attendance (COA)) or Financial Aid Budget
Also known as the cost of education or also known as the student budget, the total amount it should cost the student to go to school, including tuition and fees, room and board, allowances for books and supplies, transportation, and personal and incidental expenses. Loan fees, if applicable, may also be included in the COA. Childcare and expenses for disabilities may also be included at the discretion of the financial aid administrator. Schools establish different standard budget amounts for students living on-campus and off-campus, married and unmarried students and in state and out-of-state students.
Each college has its own student Cost Of Attendance (COA) or Financial Aid Budget Budget, which includes tuition, fees, books, supplies, housing, food, transportation, personal expenses and sometimes the rental or purchase of a computer for the school year. It may also include money for a computer. Your COA will vary depending on where you live (on or off campus, with your parents) and the college you attend. If you have children or other dependents who require care while you go to class, your COA may also include these expenses. If you have a disability, let your college’s financial aid office know about any related expenses that aren’t already covered.
The COA includes reasonable costs for eligible study-abroad programs as well. For students attending less than half-time, the COA includes tuition and fees and an allowance for books, supplies, transportation and dependent care expenses, and can also include room and board for up to three semesters or the equivalent at the institution. But no more than two of those semesters, or the equivalent, may be consecutive. Talk to the financial aid administrator at the school you’re planning to attend if you have any unusual expenses that might affect your cost of attendance.
A budget helps you to make the best of your financial resources by determining your monthly income and then deciding ahead of time how to spend it. A budget will help you reduce unnecessary expenditures and better anticipate your monetary needs. It will help you develop a budget by:
1. Calculating your monthly income
2. Calculating your anticipated expenses
3. Determining what amount is left
Student's attendance status is defined by the institution. It could be:
Cost of Attendance
– Federal Pell Grant (if eligible)
– Subsidized Stafford Loan amount (if eligible)
– Any other financial aid you receive
= Amount of unsubsidized loan you receive (up to the annual maximum loan amount)
Attendance expectations and follow-up
All the schools require daily attendance, and have strict policies about missed classes (typically no more than three absences were allowed in a term). The students in our conversations clearly stated that, in their opinion, missing classes was not like traditional education because the programs move quickly and intensively — “missing one class is like missing a week at community college.” Attendance is noted and tracked systemically, typically through information systems, with follow-up at required weekly meetings of program staff. In all cases, by the second absence, students are contacted either by the instructor, program director, or recruiter, depending on the school. Issues are discussed, problems identified, and students are encouraged to return, get additional help, or restart the program when the presenting problem is resolved. One school provides laptops to all degree students as part of their toolkit, which helps with student access to online resources and allows the school to stay in touch with students by using social networking tools such as Facebook®. In some cases, absences lead to the assignment of either a student or faculty mentor to assist the student in dealing with his or her obstacles to attending. If the obstacles to completing are intractable, and it is clear early in the program that the student cannot complete the program because of a previously unidentified learning disability or other learning problem, two of the schools indicated that they offer full refunds.
Students presenting either academic or personal problems are identified and assessed as soon as possible. All of the schools treated this as a weekly school-wide task – often assigned to faculty members and program directors, and involving student services staff members when indicated. Immediate problems typically arise for students in transportation, childcare, scheduling, or finances; these issues are addressed immediately and proactively before they drag the student down.
California Student Aid Commission
The primary mission of the Commission is to make higher education financially accessible to all of California's students. The Commission administers the Cal Grant program, a loan assumption (repayment) program for prospective K-12 teachers, and a state work-study program. The Commission is also the federally-designated guaranty agency for the Federal Family Education Loan program for California. You can find out more about the Commission by visiting their Web site at www.csac.ca.gov.