Loans

Frequently Asked Questions About Loans

Expand all Collapse all

• How do I apply?

  Students must complete the 2010-11 Free Application for Federal Student Aid (FAFSA). (Note: The student must file the FAFSA in order for the parent to apply for the Federal Direct Parent PLUS Loan.) Students must accept their Federal Direct Stafford Loans on their Award Notice via Self-Service Banner Federal Direct Parent PLUS Loan page.) Federal Direct Loan Master Promissory Note website. Students must sign in with their Federal Student Aid PIN. 

• Do I have to complete Loan Entrance Counseling and a Master Promissory Note (MPN)?

  Yes. All students must complete Direct Loan Entrance Counseling and new Federal Direct Loan MPNs.
  

• What are the benefits of the Federal Direct Loan Program?

  There are several benefits to the Federal Direct Loan Program. For detailed information, visit the U.S. Department of Education's Federal Direct Loans website.
  

  • A guaranteed source of funding
  • A lower interest rate on PLUS Loans
  • A single point of service for repayment
  • Additional repayment options for students and interest rate reductions for on-time payment
  • The Public Service Loan Forgiveness Program

• The Public Service Loan Forgiveness Program

  The interest rate for Federal Direct Stafford Loans is the same as that of the FFEL Program. However, the Direct PLUS Loan interest rate is 7.9%, whereas the PLUS Loan interest rate in the FFEL Program is 8.5%.

• What happens to the Stafford/PLUS Loans I borrowed in previous years?

  Stafford Loans from previous aid years should remain in deferment as long as the student is enrolled at least half-time. PLUS Loan borrowers may request deferment if the student is enrolled at least half-time.

• How will repayment be handled if I have both FFEL and Direct Loans?

  Payments on Stafford/PLUS Loans are made by the borrower to their federal loan servicer. Borrowers that have multiple loan servicers for their loans will have multiple payments to make. Borrowers can opt to consolidate all of their federal student loans (both FFEL and Direct Loans) into one loan. For more information about Federal Consolidation Loans, visit the Federal Direct Consolidation Loan website.
  

• Where can I find information about who services my federal student loans?

  Borrowers can find detailed information about their federal student loans, including their loan servicers, on the National Student Loan Data System (NSLDS). Borrowers will need their Federal Student Aid PIN available at www.pin.ed.gov to access their federal student loan records.

• Will I still be able to borrow private loans through a lender of my choice?

  Yes. Students may continue to pursue private loans with a lender of their choice; however it is strongly recommended students apply for federal student aid first. For more information, see our Private Loans information above.

• How do I get uneven disbursements on my loan?

  The Federal Stafford and PLUS loans cannot have uneven disbursements. They will be divided evenly over the quarters of enrollment. For a Private Loan we will need the request in writing, BEFORE the loan is certified. The request should include your name, Student ID #, amount of the loan and amounts you would like disbursed for each quarter. Requests can be faxed to (614) 823-1588 or e-mailed to: financialaid@otterbein.edu.

• I am taking a Senior Year Experience class with a trip, how can I include the additional charges in my loan?

  The additional charges will need to be included in your Cost of Attendance (COA) in order to be included in your loan. You will need to complete the Special Circumstance Form asking that the additional charges be included into your COA. If uneven disbursements are required, please follow the guidelines set forth above.

• When would I need to complete Exit Interview Counseling?

  Anytime that you are enrolled less than half-time, withdraw or graduate; exit counseling will need to be completed. Half-time status is 6 hours for Undergraduate students and 3 hours for Graduates students. You can complete exit counseling here.

• How do I get the credit balance on my student account?

  Once there is a credit balance on your student account you can contact the Business office to request a refund check. They issue refund checks weekly on Fridays; the check request must be made by Wednesday at 12pm in order to be processed for that Friday. The Business Office can be reached at (614) 823-1150 or via e-mail at BusinessOffice@otterbein.edu.
  
  

• What is included in the Cost of Attendance?

  The Cost of Attendance (COA) usually includes tuition and fees, room and board, books and supplies and personal expenses/miscellaneous expenses. Your COA budget is viewable in Self-Service Banner.

• How can I use my financial aid to purchase books?

  If you have a credit balance on your student account you can have that money moved to your Cardinal Card to be used in the book store. Please contact the Business office at (614) 823-1150 to have money moved to your Cardinal Card. 

• What is a Master Promissory Note?

  The Master Promissory Note or MPN is a loan contract between the borrower and the Department of Education. It is a promise to repay the student loan. The MPN contains the terms and conditions of the student loan and must be signed before the loan funds will be disbursed to Otterbein. The MPN is good for 10 years and additional student loans may be disbursed from the original signed MPN. 

• What is a Private Student Loan?

  A Private Student Loan is used to assist students in covering the remaining balance due. These loans are in addition to the Federal Student Loans already included in the student’s financial aid award. The variable interest rate will differ with each lender and is credit based; interest will accrue from the first date of disbursement. This loan is in the student’s name and often requires the student have a credit-worthy co-signer in order for the loan to be approved. Generally repayment begins after the student graduates or drops below half-time. To obtain more information about Private Loans see the list above.

• What is a Federal Parent PLUS Loan?

  The PLUS loan program is available to parents at a fixed rate of 7.9% as of July 1, 2010. The parent is the borrower on this loan and a credit check is performed. Repayment begins 60 days after the loan is fully disbursed. The Parent may apply for deferment during the application process as long as the student is enrolled at least half-time. Due to the fact that the loan goes into repayment 60 days after full disbursement all PLUS loan are processed for the full award period, unless we are notified otherwise. The parent will need to apply for this loan every year.

  If a parent applicant feels that they might be denied the Direct PLUS loan please complete the PLUS Loan Pre-Approval Form and submit to our office. Do NOT apply online for the PLUS loan. Our fax number is (614) 823-1588. If a parent applicant is credit denied, the student can receive additional Federal Direct Stafford Loan funds in place of the Direct PLUS Loan. 

• What is a Federal Grad PLUS Loan?

  Effective July 1, 2006, graduate or professional students can borrow money through the PLUS loan program to pay for their education. The student is the borrower on this loan and a credit check is performed. The Grad PLUS Loan is available to GRADUATE students at a fixed rate of 7.9% as of July 1, 2010. Repayment begins 60 days after the loan is fully disbursed.
  
  

• What are the credit criteria for the PLUS loan?

  Eligibility for the Parent PLUS loan depends on a modest credit check that determines whether the parent has an adverse credit history. An adverse credit history is defined as being 90 or more days late on any debt or having any Title IV debt (including a debt due to grant overpayment) within the past five years subjected to default determination, bankruptcy discharge, foreclosure, prepossession, tax lien, wage garnishment, or write-off.