Student Loan Information

MBA@UNC Student Loan Information Students enrolled in the MBA@UNC Program at UNC s Kenan-Flagler Business School can borrow student loans to cover the cost of tuition as well as living expenses. A student s total financial aid (including: corporate sponsorship, outside grants, fellowships, and all education loans) cannot exceed the cost of tuition and living expenses. In order to be eligible for Federal loan funding, students must be enrolled in a minimum of one class per quarter (please note that two quarters are the equivalent of one semester). TYPES OF FUNDING Fellowships All admissions applications will be considered for MBA@UNC fellowship awards. There is no separate application for fellowship consideration. Fellowships are offered by the MBA@UNC Admissions Office so inquiries regarding fellowship awards should be sent to our Director of Admissions, Beth Flye (Beth_Flye@unc.edu). 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 4 for terms and conditions of these loan programs. Additional Loans (to supplement Federal Direct Loans) Because Federal Direct Loans have an annual maximum amount 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 Direct Graduate 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 Direct Loan eligibility before pursuing a Direct Graduate PLUS Loan. The interest rate for Graduate PLUS loans is a fixed 7.9%. See page 4 for terms and conditions of the Federal Direct Graduate PLUS Loan program. Private Loans Private loans provide additional funding for those students (U.S. Citizens and Permanent Residents) 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 education loans is variable and is based on either the Prime Rate or LIBOR. See page 4 for general terms and conditions for private loans. 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 (as described above). Students can also review the additional loan options to determine the best program for covering the remaining amount of their tuition and, if needed, living expenses after their Federal Direct Loan eligibility is exhausted. How will I be reimbursed for the enrollment deposit I submit? All enrollment deposits are credited toward the student's first tuition payment. When can I begin the student loan application process? Student loan applications will not be processed until an applicant is admitted into the program, but s/he can begin the process at any time by completing the Free Application for Federal Student Aid (FAFSA) online at www.fafsa.gov. Please refer to the Check List for Student Loans for the required steps. Page 1 of 4

STUDENT LOAN FAQS (CONTINUED) How will my tax information affect my eligibility for Federal Direct Loans? A student s income 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@ UNC 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 Loan funding so long as they meet the basic eligibility requirements: not currently in default on an outstanding student loan, not currently filing bankruptcy, no drug convictions, etc. 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. Am I eligible to borrow loan funding for living expenses? Yes. Financial aid budgets include cost of living estimates for each student and these are updated for each academic term based on reasonable living expenses for the Chapel Hill area. Students can choose to increase their overall indebtedness to include these estimated living expenses, if they would like. What are my loan options if I am not a U.S. Citizen or permanent resident? There are no loan options available through the University for international students. Funding for international students would be independent of the financial aid process (i.e. personal loans ). However, International students with a U.S. co-signer may be eligible for select private student loans. 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. Tuition is billed on a per credit hour basis Each credit hour costs $1,382.20 Example Schedules: MBA 730 Financial Accounting (4 credit hours) MBA 740 Marketing Strategy (4 credit hours) MBA 801 Leading and Managing (4 credit hours) MBA 800 Strategy (2 credit hours) MBA 892 Immersion (1 credit hour) 11,057.60 2,764.40 1,382.20 9,675.40 MBA 700 Analytical Tools (4 credit hours) MBA 804C Management Communication (4 credit hours) MBA 892 Immersion (1 credit hour) 1,382.20 12,439.80 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 user friendly for searching on other topics. Keep in mind that Financial Aid Officers are not trained accountants and, therefore, are unable to answer tax questions. Do I have to continue making student loan payments for my outstanding loans? Most lenders will defer repayment of student loans for borrowers who enroll at least half-time at an accredited college or University (please note that this means students must be enrolled for a minimum of one class per quarter/two classes per semester to be considered half-time ). Be sure to continue making your student loan payments until you have been notified that your outstanding loans have been deferred. To view your current, outstanding student loans you should log into financial aid review at the National Student Loan Data System (NSLDS) website: http://www.nslds.ed.gov/nslds_sa/. Page 2 of 4

Where should I send my questions and/or my financial aid form? Both questions and financial aid forms can be emailed to onlinembafinancialaid@unc.edu. If fax is preferred, then please feel free to send these to 919.869.1898. Where can I find information on MBA@UNC Fellowship opportunities? The most up-to-date information regarding Fellowships can be found online at the MBA@UNC website: http://onlinemba.unc.edu/admissions/mbaunc-fellowships/. Questions regarding these funds should be directed to the MBA@UNC Admissions Office. TIPS REGARDING FINANCIAL AID A student s tuition amount is determined by the number of courses s/he will be enrolled in for each quarter. In order to be eligible to borrow Federal student loan funding, all MBA@UNC students must be enrolled in at least one class per quarter/two classes per semester. This ensures that s/he meets the Federal regulation of half-time enrollment. If a student s enrollment drops below this minimum after loan disbursement, then all Federal loan funds may be returned to the lender(s) to cancel these loans. Keep track of where you are in the process. The most common oversight students make is reviewing the financial aid process after they have decided to submit an enrollment deposit. If you know that you will apply for financial aid, then start preparing early adjustments can be made to financial aid if your situation changes. Student loan funding is normally processed for a single academic year at a time. This means that you would not submit a financial aid application for the entire cost of tuition now. Instead, your financial aid will be determined based on the academic year in which you are admitted. You will receive a reminder to complete the financial aid process for the second year of your program. Tuition bills are processed through the UNC Chapel Hill s Student Accounts and University Receivables. This office is referred to as the Cashier s Office. Financial aid is disbursed directly to the Cashier s Office to pay toward tuition. However, any specific questions about your tuition charges should be directed to the MBA@UNC Registrar, Jessica Brinker. All Federal Direct Loans have an origination fee so that the disbursed amount is less than the principal amount. This could result in a balance being owed if the student does not include the origination fee in their Direct Graduate PLUS or private student loan principal amount. Adjustments to student loan eligibility can be made if an individual s circumstances change. For example, sometimes employers may reduce or even eliminate tuition support after a student begins their studies. This can and should be taken into consideration when calculating student loan eligibility. Students are responsible for notifying the Financial Aid Officer of these changes. Read information carefully and be aware that you have a devoted financial aid officer to answer your questions as well as to address concerns you might have. Keep your FAFSA PIN in a place that is secure and accessible to you at all times. Many applications require it for electronic signature. Do not share your PIN with others as it is a security tool as well. If you are eligible for Veterans Benefits, then be aware that this program may be eligible for VA funding. Students should contact the Department of Veterans Affairs to confirm that they are eligible for benefits as well as the type of benefit they are eligible to receive. All veterans are encouraged to visit the U.S. Department of Veterans Affairs website (http://www.gibill.va.gov/) for more information. You can review MBA@UNC s information on Veterans Benefits online at http://onlinemba.unc.edu/admissions/military/mba-unc-veteran-benefits/. Please note that the MBA@UNC Veterans Certifying Official is Jessica Brinker (Jessica_Brinker@kenan-flagler.unc.edu). Begin searching for scholarship/grant/fellowship funding provided by private organizations early. You may find resources such as www.mba.com helpful in beginning your search. Also note that UNC Chapel Hill s GrantSource Library is dedicated solely to assisting graduate/professional students search for funding opportunities. You can search Funding Databases online at http://research.unc.edu/grantsource/. Be aware that private funding may not be as readily available for graduate/professional students and especially for MBA students, but there may be resources available. Be diligent in your search. Page 3 of 4

TERMS AND CONDITIONS OF STUDENT LOAN OPTIONS Direct Subsidized Loans 1 Direct Unsubsidized Loans Need-based Interest paid by the Federal government until repayment Interest accrues from disbursement 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 1 As of July 1, 2012, the Federal Direct Subsidized Loan will no longer be available to graduate and professional students. The Unsubsidized Loan program will still be available with the maximum loan amount being $20,500 per academic year. *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. Up-front interest rebates are available on federal loans originated before July 1, 2012. 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 Credit requirement: good credit history or no credit history (no delinquent accounts or bankruptcy on credit report) Interest accrues from disbursement Interest rate: 7.9% fixed Origination fee: 4% Up-Front Interest rebate: 1.5%* Annual maximum: cost of attendance minus other financial aid Grace period: none, but deferred while student is enrolled Private Loans Credit requirement: most lenders require students to have a particular credit score to be approved without a co-borrower Interest accrues from disbursement Variable and normally based on either the Prime Rate or LIBOR. Origination fee: varies, depending on loan Annual maximum: cost of attendance minus other financial aid Grace period: 6-9 months, depending on loan *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. Up-front interest rebates are available on federal loans originated before July 1, 2012. 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. The majority of Kenan-Flagler Business School students choose to borrow Graduate PLUS Loans; however, each student must choose the loan that best suits her/his individual situation. Factors to consider include: Amount of loan debt Timeline for repayment (is it possible to repay the loan quicker than the standard 10 year repayment period?) Base interest rate (Prime + 2% is very good for the current quarter, but the Prime Rate will not always be as low as it is currently) Student s credit score and, if applicable, co-signer s credit score (better credit often means better loan terms) Page 4 of 4

MBA@UNC 2011-2012 Tuition Assistance Form ALL STUDENTS RECEIVING COMPANY TUITION ASSISTANCE MUST COMPLETE THIS FORM Last Name First Name Middle Initial Preferred First Name UNC PID (if known) Last 4 digits of SSN Date of Birth (MM/DD/YYYY) Preferred email address 2 Year Track 3 Year Track Graduating year 20 CHECK LIST FOR STUDENT LOAN REQUIREMENTS (U.S. Citizens and Permanent Residents Only) FAFSA (Free Application for Federal Student Aid) should be completed online at www.fafsa.ed.gov using UNC Chapel Hill s Federal School Code 002974. MBA@UNC 2011-2012 Tuition Assistance Form (this form) should be completed if receiving company assistance and emailed to onlinembafinancialaid@unc.edu or faxed to 919.869.1898. ADDITIONAL INFORMATION REQUESTED BY THE OFFICE OF SCHOLARSHIPS AND STUDENT AID Students typically have a message on their Student Aid Report indicating if these items might apply to them and only a few will be required to submit additional information. The most commonly requested items include Verification/tax documents and citizenship document for students who are Permanent Residents or Naturalized citizens. MASTER PROMISSORY NOTE (MPN) FOR DIRECT SUBSIDIZED/UNSUBSIDIZED LOANS should be completed online at http://studentloans.gov after FAFSA is submitted. ENTRANCE COUNSELING should be completed online at http://studentloans.gov after FAFSA is submitted. DIRECT GRADUATE PLUS OR PRIVATE LOAN should be completed after Direct Subsidized/Unsubsidized Loan eligibility is finalized. Additional steps for accepting the Graduate PLUS Loan/private funding are required. EMPLOYER AND COMPANY TUITION ASSISTANCE/REIMBURSEMENT INFORMATION Employer Name Employer Address Employer and Company Tuition Assistance or Reimbursement Program Details Tuition reimbursement paid after MBA graduation OR Tuition assistance paid during program enrollment Calendar year maximum: $ OR Per credit hour maximum: $ Tuition support paid directly to UNC Chapel Hill OR Tuition support paid directly to student/employee Student/Employee Name (printed) Student/Employee Signature Date Email completed form to onlinefinaid@unc.edu or fax to 919.869.1898