LOANS

Types of Loans
Application Process
Stafford Loan Limits
Rights and Responsibilities
Lenders
Loan Disbursement
PLUS Loans
Deferment and Forbearance
Delinquency and Default
Entrance and Exit Counseling
Student Loan Ombudsman

Consolidation

 

Loans can help you meet your educational expenses. We encourage you to borrow wisely so that you graduate with a manageable level of debt. Loans MUST be repaid with interest. You must repay loans even if you do not complete your education, are not able to get a job after you complete the program or are dissatisfied with the education for which you paid. First-time ECU borrowers must complete an entrance counseling session before loans will be certified and ECU borrowers who drop below half-time, graduate, or transfer to another school must complete an exit counseling session. Half-time enrollment for undergraduate students is 6 credit hours. Half-time enrollment for graduate students is 4 credit hours.  Recent legislation eliminated the FFELP lenders in favor of the government's direct loan program.  As a result, all loan borrowers will be required to complete a new Master Promissory Note and Direct Loan Entrance Counseling beginning with the Summer 2010 semester.

Types of Loans

Lions-Alumni Student Loan Fund and Don Clawson Student Loan Fund

These funds are designed to aid students with short-term, low-cost loans to meet emergency expenses. The loan is to be repaid prior to pre-enrollment for the following semester. This type of loan does not require entrance and exit counseling. Students are required to have pending financial aid to qualify for this loan. The application may be obtained in the Bursar Office. There is a 12% annual interest charge for this loan.

Federal Perkins Student Loan Program

The Perkins Loan program makes long-term, low-interest loans to qualified students. East Central University is the lender and the loan is made with government funds. Repayment normally begins nine months after graduation, leaving school or dropping below half-time. East Central University may not deliver the first installment of Perkins Loan proceeds to a first time borrower until 30 days after the first day of classes (the 31st day). This loan may be up to $5500 per academic year. The borrower may not borrow over $27,500 as an undergraduate. The interest rate is 5 percent. This is a need-based loan. Funding is limited and the average loan is $1000 per semester. Priority is given to previous ECU Perkins borrowers.

Federal Stafford Loan Program (subsidized and unsubsidized - formerly GSL)

The Stafford Loan is a low interest loan guaranteed and funded by the federal government.  Credit history is not a factor; no credit check is done to qualify for these loans. Students who defaulted on prior student loans are not eligible to borrow until the default status is resolved. The interest rate for loans first disbursed after July 1, 2010 is as follows:

Effective July 1, 2010 to June 30, 2011

  • Subsidized loans for undergraduates 4.5%
  • Subsidized loans for graduates 6.80%
  • Unsubsidized loans 6.80%
  • PLUS 7.9%

Repayment normally begins six months after graduating, leaving school or dropping below half-time. Half-time for undergraduates is 6 credit hours. Half-time for graduates is 4 credit hours. The monthly repayment amount depends on the total amount borrowed, the length of the payment period, and the repayment option chosen. The average loan indebtedness of ECU undergraduate student borrowers who graduated in May 2009 was $20,802. Based on a standard 10-year repayment schedule at the current interest rate of 6.8%, the average monthly payment would be approximately $240.00. If you have previous student loans, you may access your loan borrowing history at http://www.nslds.ed.gov/.

The amount of the loan is determined by the Financial Aid Office. Some of the variables that determine the loan amount are your expected family contribution as determined by the FAFSA, your cost of attendance, your grade level, and other types of financial aid you are receiving. ECU may not deliver the first installment of Stafford Loan proceeds to a first-year undergraduate student who has not previously received a Stafford Loan until 30 days after the first day of classes (the 31st day).  You must be enrolled at least half-time to receive any loan disbursement.  Half-time for undergraduates is 6 hours and for graduate students is 4 hours.  If you need to withdraw from all classes before the close of a semester, you must withdraw in writing to the ECU Office of Admissions and Records.  You must also contact the Financial Aid Office to determine if funds must be returned to the federal aid programs and to complete required loan exit counseling.

subsidized Stafford- The U.S. Department of Education pays interest accrued on subsidized loans while the student is in school. This is a need-based loan and students must have unmet need as determined by the FAFSA.

unsubsidized Stafford- Interest is accrued from the time the loan is disbursed until the loan is paid off in full. Students may choose to pay the interest quarterly, or they can allow the interest to accrue and be added to the principal amount of their loan (capitalize the interest).

Federal PLUS Program

This loan may be available to families of dependent students when other types of aid do not meet their needs. Parents may borrow up to the estimated cost of attendance minus other financial aid received. It is a loan program similar to the Federal Stafford Loan Program. The interest rate is fixed at 8.5%. The government's servicer  will run a credit check on all PLUS Loan borrowers. The PLUS Loan Request Form is available on the forms link of the financial aid website.

 

Application Process

  1. Complete the Free Application for Federal Student Aid (FAFSA) and list ECU's school code -- 003154. If selected for verification, submit a verification worksheet and signed copies of federal tax forms with W2's and all schedules. Submit any other supporting documents requested by the ECU Financial Aid Office to determine your eligibility. 
  2. When your financial aid file is complete and accurate, the ECU Financial Aid Office will send you an award letter. The award letter states the type and amount of financial aid you are eligible to receive.
  3. To have a student loan processed, you must complete and submit to the Financial Aid Office a Direct Loan Acceptance Form. This form is available on our forms link. A new form must be submitted for each loan period in which you wish to borrow.
  4. First-time ECU loan borrowers must complete loan entrance counseling before a student loan will be processed. Prior loan borrowers in the FFELP program must complete Direct Loan Entrance Counseling beginning Summer 2010 due to elimination of the FFELP program and its lenders. Entrance Counseling is required by federal regulation to help you understand your loan rights and responsibilities. An entrance counseling session may be completed by one of the following methods:
    1. Click the entrance counseling link to complete online entrance counseling. Read the content, answer the questions, and complete the student form. Print the confirmation page for your records. East Central University will receive confirmation that you completed the online counseling session.
    2. Complete in-person counseling at the Financial Aid Office on the main campus (Administration Building, Room 101A).
    3. Complete the paper entrance counseling session. Contact the Financial Aid Office to obtain the paper entrance counseling form and information on student loans. Review the information, complete the paper form, and return it to our office. 
  5. First-time ECU borrowers must complete a Master Promissory Note. This is the binding legal document that lists the conditions under which you are borrowing and the terms under which you agree to repay the loan. The Master Promissory Note can be completed online at https://studentloans.govl. If you are unable to access the Master Promissory Note online, please contact the Financial Aid Office for assistance.

 

Stafford Loan Limits (subsidized and unsubsidized loans combined)

Dependent Undergraduate Students:

  • Freshmen may borrow up to $5,500 per year. Up to $3,500 may be subsidized loan.
  • Sophomores may borrow up to $6,500 per year. Up to $4,500 may be subsidized loan.
  • Juniors and Seniors may borrow up to $7,500 per year. Up to $5,500 may be subsidized loan.
  • The maximum that dependent undergraduates may borrow for all years is $31,000 (maximum of $23,000 in subsidized loans).

Independent Undergraduate Students:

  • Freshmen may borrow up to $9,500 per year. Up to $3,500 may be subsidized loan.
  • Sophomores may borrow up to $10,500 per year. Up to $4,500 may be subsidized loan.
  • Juniors and Seniors may borrow up to $12,500 per year. Up to $5,500 may be subsidized loan.
  • The maximum that independent undergraduates may borrow for all years is $57,500 (maximum of $23,000 in subsidized loans).

Graduate Students:

  • Graduate students may borrow up to $20,500 per year. Up to $8,500 may be subsidized student loans.
  • The maximum that graduate students may borrow for all years is $138,500 (maximum of $65,500 in subsidized loans). The graduate maximum includes Stafford loans received as an undergraduate student.

The loan amounts listed above are the annual maximums for the grade levels indicated. Not all students will qualify for these amounts. The cost of attendance, number of hours enrolled, and other financial aid received are also factors in determining loan eligibility. Students are encouraged to keep debt manageable and borrow only what is needed to cover educational costs. Borrowers may reduce or cancel student loans at any time prior to disbursement and up to fourteen days after disbursement. Borrowers wishing to reduce or cancel student loans must notify the ECU Financial Aid Office in writing.

 

Rights and Responsibilities

Your Rights as a Borrower:

  • You have the right to written information on your loan obligations, including loan consolidation and refinancing, and information on borrower rights and responsibilities. You have a right to a copy of the master promissory note, and return of the note when the loan is paid in full.
  • You have the right to an explanation of default and its consequences.
  • If your lender assigns, sells, or transfers your loan to another servicer, you must be provided information on the identity of the purchasing lender, the name and address of the new lender or servicer, and the telephone number of both the purchasing and selling lenders and servicers.
  • Before you begin repayment, your loan holder is required to give you a repayment schedule and detailed information about interest rates, fees, the balance you owe and available repayment options.
  • You have the right to defer repayment for certain defined periods, if you qualify (refer to section on Deferment and Forbearance).
  • You have the right to request forbearance.
  • You may prepay your loans in whole or in part at any time without penalty.

Your Responsibilities as a Borrower:

  • You must repay your loans according to the terms and conditions of your loan agreement.
  • You must attend entrance counseling before receiving loan funds and exit counseling before leaving school.
  • You must make payments on time, or make other arrangements with your lender or loan holder.
  • You must notify your lender if you change your name, address, phone number, or enrollment status.
  • You must notify your lender if you are unable to make payments.

 

Lenders

Effective beginning with the Summer 2010 Semester, the federal government is the only source for student loans.

 

Loan Disbursement

You will receive a "Notice of Guarantee and Disbursement" which contains estimated disbursement dates and the amount of your loan check. Review this notice and keep it for your records. It will also indicate the net amount of your loan check. The net amount is the amount you will receive after fees have been deducted. Loan funds are received via electronic funds transfer and are credited to your account. You must be enrolled at least half-time and making satisfactory academic progress in order to receive your loan funds. Loan funds are disbursed in two payments. The first payment occurs after the add/drop period for the semester and the second payment occurs after the midpoint of the loan period. Loan funds remaining after your ECU bill is paid are given to you as a refund check from the Bursar Office within fourteen days.

Beginning July 1, 2010, students will begin receiving all tuitioon and financial aid refunds through the ECU Tiger Card.  ECU has contracted with Higher One to provide refunds quicker.  Students must activate the card and choose either direct deposit or having funds put on the ECU Tiger Card.  Rreview the ECU website for more information and a list of fees for using the card.

 

PLUS Loans

Parents can borrow money on behalf of their dependent students through the PLUS loan program. PLUS loans have a fixed interest rate of 8.5%. The parent borrower must pass a credit check and may not have an adverse credit history. Parents may borrow up to the estimated cost of attendance minus other financial aid. To receive a PLUS loan, the parent needs to complete the PLUS Loan Request Form. This form is available on our forms link.

If a dependent student's parent applies for and is denied a PLUS loan due to adverse credit, the dependent student may qualify for additional Stafford loans. If your parents are denied a PLUS loan and you need additional loan funds to pay your educational costs, contact the Financial Aid Office for assistance.

 

Deferment and Forbearance

A deferment is a period of time during which you are not required to make loan payments. During the period of deferment, interest continues to accrue on the loan. The government will pay the interest for you during periods of deferment on subsidized Stafford loans. The borrower continues to be responsible for interest during periods of deferment on unsubsidized Stafford loans. Deferments are not automatic. You must apply for them. Contact your servicer for more information.

You may qualify for a deferment if you meet any of the following conditions:

  • Half-time enrollment
  • Unemployment
  • Economic hardship
  • Graduate fellowship
  • Rehabilitation training
  • Military

A forbearance is a temporary reduction or postponement of your student loan payments. Your servicer can grant forbearance up to 12 months at a time, for a maximum of three years. You will have to provide documentation to the lender to show why you should be granted forbearance. You must continue to make your loan payments until your lender notifies you that a forbearance has been granted and the terms of the agreement.

 

Delinquency and Default

Delinquency and default have serious consequences for a borrower.

If you are late on a scheduled payment, you are considered to be delinquent on your loan. If you are more than 90 days late, your delinquency will be reported to national credit bureaus.

If you are 270 days late on your scheduled payment, you are in default on your loan agreement, and it will be assumed that you do not intend to repay your loan. The federal government will buy your loan from your servicer and track you for payment. Defaults are reported to national credit bureaus and remain on your credit report for seven years. This may affect your ability to obtain an auto loan, credit cards, or other financing.

Other consequences of default include:

  • The entire unpaid amount of your loan, including interest, may become immediately due and payable.
  • Collection costs may be added to the amount of your loan.
  • Legal action may be taken against you.
  • The federal government may collect loan payments from federal and state income tax refunds, garnished wages, or state lottery winnings.
  • You will be ineligible to receive any additional federal or state financial aid funds (Federal Pell Grant, Supplemental Educational Opportunity Grants, Teach Grants, Academic Competitiveness Grants, National SMART Grants, Oklahoma Tuition Aid Grants, Work Study, and the Perkins, Subsidized and Unsubsidized Stafford Loans, and/or PLUS loans) at any institution.
  • Your college records may be placed on hold.
  • You will lose your student loan deferment options.
  • You may not be able to obtain a professional license or get hired by an employer that performs credit checks.

Your default will have an effect on the future of this loan program and could jeopardize the educational opportunities of future students. If you are unable to make your scheduled loan payments, contact your lender to determine if you qualify for deferment or forbearance.

 

Entrance and Exit Counseling

Borrowing student loans is serious business. Although loans can be great in helping you attend college, these legal obligations can also become quite a burden during repayment. We don't want you to borrow loans without understanding the responsibility. Neither does the federal government who requires Entrance Counseling before borrowing and Exit Counseling when leaving East Central University.

Entrance Counseling helps show your rights and responsibilities regarding borrowing. It is a good idea to do this even before accepting a student loan. You can complete this requirement by choosing one of the following options below. But do it early. Your student loan can't be processed without it, even if done before at another institution. And you don't want to take on debt without knowing how it works.  Prior borrowers will need to complete the Direct Loan Entrance due to the elimination of the FFELP Program and its lenders.

An entrance counseling session may be completed by one of the following methods:

  • Click the entrance counseling link below to complete online entrance counseling. Read the content, answer the questions, and complete the student form. Print the confirmation page for your records. East Central University will receive confirmation that you completed the online counseling session.
  • Complete in-person counseling at the Financial Aid Office on the main campus (Administration Building, Room 101A).
  • Complete the paper entrance counseling session. Contact the Financial Aid Office to obtain the paper entrance counseling form and information on student loans. Review the information, complete the paper form, and return it to our office.

When you drop below half-time enrollment, graduate, or transfer to another school you will complete Exit Counseling. This will remind you of your rights, responsibilities and options to help you successfully manage your student loans. You may complete exit counseling by one of the following methods:

  • Click the exit counseling link below to complete online exit counseling. Read the content, answer the questions, and complete the student form. Print the confirmation page for your records. East Central University will receive confirmation that you completed the online counseling session the next business day.
  • Complete in-person counseling at the Financial Aid Office on the main campus (Administration Building, Room 101A).
  • Complete the paper exit counseling session. Contact the Financial Aid Office to obtain the paper exit counseling form and information on student loans. Review the information, complete the paper form, and return it to our office.

We want to help you understand the process. So regardless of which method you use, if you have loan questions please contact us by phone at (580) 559-5243, email us at financialaid@ecok.edu, or visit us in the Administration Building, Room 101A.  You are assigned a Financial Aid Counselor based on your last name.  If you last name begins with:

A-J

Chet Standridge

(580) 559-5241

checsta@ecok.edu

 

K-T

Jennifer Townsend

(580) 559-5733

jtownsnd@ecok.edu

 

U-Z

Sandy Thetford

(580) 559-5529

sthetfrd@ecok.edu

 

 

(Entrance Counseling) http://studentloans.gov

(Exit Counseling) http://www.nslds.ed.gov/nslds_SA/

 

Student Loan Ombudsman

The Ombudsman's office is a resource for borrowers to use when other approaches to resolving student loan problems have failed. Borrowers should first attempt to resolve complaints by contacting the school, lender, servicer, or guarantor. If the borrower has made a reasonable effort to resolve the problem through normal processes and has not been successful, the borrower should contact the FSA Student Loan Ombudsman at:

U. S. Department of Education
FSA Ombudsman 830 First Street, NE
Fourth Floor
Washington, DC 20202-5144

Toll-free Phone: 1 (877) 557-2575
Internet: http://www.ombudsman.ed.gov/

 

Consolidation

Borrowers who received loans from one or more lenders in the FFELP program may wish to consider consolidation which may make payments more manageable by combining multiple student loans into one loan with one monthly payment.  It can lower your monthly payment by extending the repayment period.  Extending repayment will increase the amount of interest.  Some deferments and benefits may be lost through consolidation.  Between 07/01/2010 and 07/01/2011 students may consolidate while still in school.  To learn more about the pros and cons of consolidation, go to www.loanconsolidation.ed.gov or call the Direct Loan Consolidation Center at 1-800-557-7392.