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EVENING MBA - STUDENT LOAN INFORMATION

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EVENING MBA - STUDENT LOAN INFORMATION Powered By Docstoc
					EVENING MBA - STUDENT LOAN INFORMATION
Students enrolled in the Evening MBA for Executives Programs at UNC’s Kenan Flagler
Business School can borrow student loans to cover the cost of tuition. A student’s total financial
aid (including company sponsorship and all education loans) cannot exceed the cost of tuition.
If a student’s employer will pay 100% of tuition, then s/he is not eligible for student loans.


TYPES OF FUNDING
   Merit-Based Fellowships
     All applications will be considered for merit-based fellowship awards. These awards are
     offered by the MBA for Executives Programs Office so inquires regarding how these
     awards are made should be directed to the appropriate Program Director.

       Federal Direct Loans
        The Federal Direct Loan program is available to all U.S. Citizens and Permanent
        Residents who meet basic Federal requirements (i.e. student has never defaulted on a
        Federal loan and/or is not currently involved in filing bankruptcy). The two types of
        Federal Direct Loans are Subsidized (interest paid by Federal government until
        repayment) and Unsubsidized (interest accrues from disbursement). Students are eligible
        to borrow a maximum of $20,500 per academic year through the Federal Direct Loan
        Program. See page 2 for terms and conditions of these loan programs.

Additional Loans (no supplement Federal Direct Loans)
Because Federal Direct Loans have an annual maximum of $20,500 per academic year, students
are eligible to borrow an additional loan to cover the costs that exceed the annual maximum.
Typically, students choose one loan type to supplement their Direct Loans. Most MBA students
choose the Direct Graduate PLUS Loan, but you should choose the program that best suits your
situation.

       Federal Direct Graduate PLUS Loans
        Federal Graduate/Professional PLUS Loans provide additional funding for those
        students (U.S. Citizens and Permanent Residents only) whose costs exceed the
        maximum Direct Loan eligibility of $20,500 per academic year. Students should exhaust
        their Federal Stafford Loan eligibility before pursuing a Direct Graduate PLUS loan.
        The interest rate for Graduate PLUS loans is fixed 7.9%. See page 2 for terms and
        conditions of the Federal Direct Graduate PULS Loan program.
      Private Loans
       Private loans provide additional funding for those students (U.S. Citizens and Permanent
       Residents only) whose costs maximum Direct Loan eligibility of $20,500 per academic
       year. Students should exhaust their Federal Direct Loan eligibility before pursuing a
       private education loan. The interest rate for private loans is variable and is based on
       either the Prime Rate or LIBOR. See page 2 for general terms and conditions.


STUDENT LOAN FAQs
   Will I know what my financial aid award is before I have to submit an enrollment
    deposit?
    Possibly, however, all students should anticipate being eligible to borrow the maximum
    Federal Direct Loan amounts so long as they meet the basic eligibility requirements (see
    above). Students can also review the additional loan options to determine the best
    program for covering the remaining amount of their estimated cost of attendance.
   How will I be reimbursed for the enrollment deposit I submit?
    All enrollment deposits are credited to the final tuition payment.
   How will my employer contribution toward tuition affect my loan eligibility?
    Students receiving partial tuition coverage through their employer can expect to borrow
    the difference between the total tuition and the amount of their employer contribution.
    Typically, the employer contribution is taken into consideration beginning with tuition
    payment 2 or 3 (depending on the program and the amount of the contribution).
   When can I begin the student loan application process?
    Student loan applications will not be processed until an applicant is admitted to an
    academic program, but s/he can begin the process at any time. Please refer to the Check
    List for Student Loans for the required steps.
   How will my tax information affect my eligibility for Federal Direct Loans?
    A student’s tax and asset information as reported on the FAFSA is used to determine
    eligibility for need-based financial aid such as the Direct Subsidized Loan but does not
    affect a student’s overall loan eligibility. Many MBA for Executives students are not
    eligible for need-based funding, but this does not preclude them from borrowing non
    need-based funding like the Direct Unsubsidized Loan and Direct Graduate
    PLUS/private loans.
   Are Federal Direct Loans guaranteed for all students?
    All U.S. citizens and permanent residents are eligible for Direct Loans funding so long as
    they meet the basic eligibility requirements: not currently filing bankruptcy, no drug
    convictions etc. All students who applied for Federal Loan funding in the past four
    classes of MBA for Executives Programs met these basic eligibility requirements.
STUDENT LOAN FAQs (CONTINUED)
   How do I know what the terms and conditions of student loans are?
    See page 3 for charts that compare the two types of Federal Direct Loans as well as
    Direct Graduate PLUS and private loans.
   Do I have to borrow the maximum loan amounts?
    No. Students can borrow as much or as little of the maximum loan amounts available to
    them.
   How Do I apply for a merit-based fellowship?
    A student’s application for admission serves as the application for merit-based
    fellowships. There is no separate application for these awards.
   How would a merit-based fellowship affect my loan eligibility?
    A student’s fellowship amount will reduce her/his tuition balance and is normally
    credited equally over all payments. The reduction to the tuition amount proportionately
    reduces the student’s loan eligibility.
   How is tuition billed?
    All billing will be handled through the Office of Student Accounts, which is where all
    financial aid is disbursed. Student loan funds will be credited directly toward any
    outstanding tuition balance due. See page 5 for payment information.
   Is my tuition tax deductable?
    IRS Publication 970 (http://www.irs.gov/pub/irs-pdf/p970.pdf) covers tax benefits for
    education. This publication typically addresses most general questions that students have
    and the IRS website (www.irs.gov) is pretty user friendly for searching on other topics.
    Keep in mind that the Financial Aid Assistant Director is not a trained accountant and,
    therefore, is unable to answer tax questions.
   Do I have to continue making student loan payments for my outstanding loans?
    Most all lenders will defer repayment of student loans for borrowers who enroll at least
    half-time at an accredited college or University (all MBA for Executives Programs fall
    into this category). Typically lenders do not require additional paperwork for the process
    of deferment since enrollment information can be accessed electronically. Be sure to
    continue making your student loan payments until you have been notified that your
    outstanding loans have been deferred.
   Can I borrow student loans for the preparatory workshops that occur before the
    program begins?
    No. Because these are not required courses for your degree and occur prior to the
    academic year, they do not meet Federal eligibility requirements for student loan
    funding.
   Can I borrow student loans for a laptop purchase?
    Yes. This is treated as a reimbursement, so students should submit a receipt of purchase
    to have their loan eligibility increased to cover this expense.
TERMS AND CONDITONS FOR STUDENT LOAN OPTIONS
Direct Subsidized Loans                              Direct Unsubsidized Loans
Need-based                                           Non need-based
Interest paid by the Federal government until        Interest accrues from disbursement
repayment
Interest rate: 6.8% fixed                             Interest rate: 6.8% fixed
Origination fee: 1.0%                                 Origination fee: 1.0%
Up-Front Interest rebate: 0.5%*                       Up-Front Interest rebate: 0.5%*
Annual maximum: $8,500                                Annual maximum: $20,500 when combined
                                                      with Subsidized
Grace period: 6 months                                Grace period: 6 months
Repayment period: 10 years standard                   Repayment period: 10 years standard
*This is a credit toward the origination fee (not the interest rate) so that 99.5% of the certified
principal loan amount is disbursed to the University. This rebate will be added back to the
principal loan amount if the borrower makes a late payment during the first 12 months of
repayment.

Example: $20,500 principal MINUS $205 origination fee + $102.50 rebate = $20,397.50
DISBURSED (or $20,500 X 99.5%). Principal loan of $20,500 to be repaid but would become
$20,602.50 if a late payment is made during first 12 months of repayment.

        Direct Graduate PLUS Loans                   Private Loans
Non need-based                                       Non need-based
Credit requirement: good credit history or no        Credit requirement: most lenders require
credit history (no delinquent accounts or            students to have a particular credit score to be
bankruptcy on credit report)                         approved without a co-borrower
Interest accrues from disbursement                   Interest accrues form disbursement
Interest rate: 7.9% fixed                            Variable and normally based on either the
                                                     Prime Rate or LIBOR.
Origination fee: 4%                                  Origination fee: varies, depending on loan
Up-Front Interest rebate: 1.5%*
Annual maximum: cost of attendance minus              Annual maximum: cost of attendance minus
other financial aid                                   other financial aid
Grace period: non, but deferred while student         Grace period: 6-9 months, depending on loan
is enrolled
Repayment period: 10 years standard                   Repayment period: 10 years standard
*This is a credit toward the origination fee (not the interest rate) so that 97.5% of the certified
principal loan amount is disbursed to the University. This rebate will be added back to the
principal loan amount if the borrower makes a late payment during the first 12 months of
repayment.
Example: $40,000 principal MINUS $1600 origination fee + $600.00 rebate = $39,000.00
DISBURSED (or $40,000 X 97.5%). Principal loan of $40,000 to be repaid but would become
$40,600.00 if a late payment is made during first 12 months of repayment.
CHECK LIST FOR STUDENT LOAN REQUIREMENTS
U.S. Citizens and Permanent Residents Only

      FAFSA (Free Application for Federal Student Aid)
         o Timing: Submit 2010-2011 FAFSA by March 1, 2010 or as soon as possible
            (application available Jan. 1, 2010).
            Submit 2011-2012 FAFSA by March 1, 2011 or as soon as possible (application
            available Jan. 1, 2011).
         o Procedure: File electronically at www.fafsa.ed.gov. UNC-Chapel Hill’s Federal
            School Code is 002974.

      Additional Information Requested by the Office of Scholarships and Student Aid
          o Timing: Submit as soon as request is received.
          o Procedure: To expedite processing of these requests, send your information
              directly to Susan Brooks (see contact information below). All requests will be
              emailed directly to students by the Office of Scholarships and Student Aid.
              **All Executives MBA students are required to provide information from their
              employers regarding any contribution they will make toward the student’s tuition
              and fees (even if they will not provide any financial support). Please have your
              direct supervisor or Human Resources department document this and fax, mail
              or email directly to Susan Brooks. If a student’s employer will pay 100% of
              tuition, then s/he is not eligible for student loans.**

      Master Promissory Note (MPN) For Direct Loans
         o Timing: Submit after FAFSA is processed.
         o Procedure: Submit online at http://studentloans.gov.

      Entrance Loan Counseling (only if this is your first Stafford loan or you have
       completely repaid any other outstanding student loans)
          o Timing: Submit as soon as possible (only submit once).
          o Procedure: Complete online at http://studentloans.gov.

      Direct Graduate PLUS or Private Loan
          o Timing: Submit after FAFSA is processed
          o Procedure: complete Direct Graduate PLUS MPN at http://studentloans.gov.
       Direct Deposit Consent Form
           o Timing: Submit as soon as possible (only submit once).
           o Procedure: Print a copy of the Direct Deposit Consent form at the University
               Cashier’s site http://finance.unc.edu/images/stories/forms_saur/dirdpcsh.pdf
               and mail directly to the Office of Student Accounts (address on the form). All
               students receiving financial aid funds should complete this form so that any
               amount of funds exceeding charges can be deposited to their personal bank
               accounts.

FINANCIAL AID CONTACT
Susan Brooks is the financial aid officer devoted to students enrolled in the MBA for Executives
Programs. She is available to answer your questions and address concerns you might have. All
questions regarding financial aid should be directed to her using the following contact
information:

        Susan Brooks, Assistant Director, Office of Scholarships and Student Aid
                   MBA, MAC, and MBA for Executives Programs
          Susan_Brooks@unc.edu / 919.962.9096 (phone) / 919.962.2927 (fax)
TUITION PAYMENT SCHEUDLE AND LOAN INFORMATION
   Tuition      Amount Due      Loan Type(s)        Loan        Application(s)   Completion
  Payment                                         Amount(s)       Required         Date
 Payment 1         $11,850       Direct Loan       $10,250       2010-2011       March 2010
 due August                            +              +           FAFSA          (or as soon
    2010                        PLUS/private       $1,600             +          as possible
                                     loan                        Online loan      thereafter)
                                                                 application
 Payment 2         $11,850       Direct Loan       $10,250       2010-2011       March 2010
due January                            +              +           FAFSA          (or as soon
   2011                         PLUS/private       $1,600             +          as possible
                                     loan                        Online loan      thereafter)
                                                                 application
 Payment 3         $11,850      PLUS/private       $11,850       Online loan     March 2011
  due May                          loan                          application
   2011
 Payment 4         $11,850       Direct Loan       $10,250       2011-2012       March 2011
due October                            +              +           FAFSA          (or as soon
   2011                         PLUS/private       $1,600             +          as possible
                                     loan                        Online loan      thereafter)
                                                                 application
 Payment 5         $11,850       Direct Loan       $10,250       2011-2012       March 2011
due February                           +              +           FAFSA          (or as soon
    2012                        PLUS/private       $1,600             +          as possible
                                     loan                        Online loan      thereafter)
                                                                 application
 Payment 6        $10, 250*     PLUS/private       $11,750       Online loan     March 2012
  due June                         loan                          application
    2012
*$1,500 enrollment deposit credited toward final payment of $11,750

Assuming ZERO company contribution:
$41,000 Maximum Direct Loan eligibility
       +
$30,000 Maximum PLUS/private loan eligibility
       =
$71,000 TOTAL TUITION