Federal Direct Loans
The AFI Conservatory participates in the Federal Direct Loan program. These student loans are backed by the federal government and administered by the AFI Financial Aid Office. Federal loans are available to students regardless of income.
Student loans allow you to defer some of the costs of attendance until you have either completed or left the program. These loans must be repaid, including interest and all applicable fees.
Direct Unsubsidized Loans
Direct Unsubsidized Loans are not awarded on the basis of financial need. The government does not pay the interest on this type of loan at any time. You will be responsible for interest on your loan at all times. You have the option of paying the interest while in school or having the interest accrue while you're in school to pay it later. If you choose to pay it later, it will be capitalized (usually once at the time of repayment) and the Department of Education will add the accumulated interest to the principal balance of your loan. Additional interest will then be based upon the combination of your original principal balance and the accrued interest.
Direct Loan Amounts
The amount of Direct Loans that you may receive will depend on your prior educational experience. If you have a bachelor's degree, or if you have completed at least three years of undergraduate study, you will be eligible for graduate level loans at the Conservatory. The maximum annual Direct Loan for 2012-2013 is $20,500
For those admitted without at least three years of undergraduate study completed, annual loan limits will be less and loan terms, as well as loan amounts, will vary based upon the amount of undergraduate coursework completed.
For loans first disbursed between July 1, 2012 and July 1, 2013, a Federal Direct Loan is subject to a loan origination fee of 1.0%. The entire loan amount, including deducted fees, must be repaid by the borrower.
The interest rate on the Direct Loan is 6.8% fixed for the life of the loan. (Any Federal Direct Loan borrowed before July 1, 2006 will have a variable interest rate that will change every July 1.)
Repaying Your Loan
Federal Student Loans are required by law to provide a range of flexible repayment options, including but not limited to, income-based repayment and income contingent repayment plans, and loan forgiveness benefits which other students loans are not required to do.
If you qualify for one, a deferment is a right as a borrower. A deferment allows you to postpone your loan payments for a specific period of time. During a deferment, you will not be charged interest on a subsidized loan. However, interest will accrue during a deferment for unsubsidized loans. You must apply for a deferment and be approved for it before your payments will be postponed.
The following outlines your deferment options for loans disbursed after July 1, 1993:
|Deferment Reason ||Limited to:
|Enrolled, at least half time, at a postsecondary school ||Unlimited
|Unable to find full-time employment ||Six-month period with a maximum of six periods
|Economic Hardship ||Twelve-month period with a maximum of three periods
A forbearance is an option granted to you at the discretion of your student loan lender or holder. You may apply for a forbearance to temporarily postpone or reduce your monthly payments if you are experiencing temporary financial difficulties. The terms of a forbearance are on a case-by-case basis and are arranged specifically for you by your student loan lender or holder. A forbearance may result in an increased monthly payment upon resuming regular payments.
Tracking Your Loans
The Department of Education has created a central database for student aid called the National Student Loan Data System (NSLDS) (nslds.ed.gov). NSLDS takes information from schools, lenders and guarantee agencies on a regular basis to provide the most up-to-date information for you. Using your federal PIN, you are able to access your student aid records and track your federal loans after disbursement.
The Department of Education created a Federal Student Aid (FSA) (fsahelp.ed.gov) Ombudsman to assist federal loan borrowers resolve disputes regarding their loans. While the Ombudsman cannot reverse a decision made by another party, they will assist borrowers with a neutral third-party position that can recommend solutions. If they determine that you have been treated unfairly, they will work on your behalf to fix the problem with other agencies.