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US Federal Student Aid

Welcome to DCU's US Federal Loans page. Please read all the information carefully and contact the Financial Aid Administrator for further information:

Introduction and Eligible Programmes 

Dublin City University is eligible to certify applications for the William D. Ford Direct Loan Program (formerly FFELP). These include the Federal Stafford Loan, Federal PLUS Loan and non-federal private international student loans.  DCU's federal School Code is G26117. It is imperative that you read and understand the information set out below, follow the procedures given and adhere to deadlines. We will try to make the loan process as easy as possible, but we will not be able to take short cuts or fast-track any applications. Plan early - the process takes time.

The US Federal Loan system for 2019/20 students is now open.  Loan applications will be processed on receipt of all requested documentation only and students should be in receipt of a full offer (not conditional) before the loan can be fully approved.

On arrival to Ireland, please ensure you open an Irish Bank Account and allow yourself enough funds for at least 6 weeks after arrival and for every subsequent disbursement date on your Aid Letter, which will be issued shortly after DCU submits your loan to the US Department of Education.  All applications should be received by 31 July in any given year (where possible).

Overview

If you have attended high school or college in the US and are coming to Ireland as an undergraduate or postgraduate, you will need to understand the way your financial aid is processed. US Federal Regulations for foreign schools are very different from those in operation at US schools and can require a more paper-based approach.  It differs slightly to your experience as a US student studying in your home country in this context.

US financial aid applications are handled by thee University's International Office. Disbursements are dealt with through DCU's International Office while the transfer of funds and fee payments are carried out through our Fees Office.  Most of your dealings will thus be with the International Office and fees who will transfer your funds into your Irish Bank Account. It is the student's responsibility to ensure that fees retain necessary portion (if fees are part of the purpose of the loan) so please check with fees that your fee status is up to date after each disbursement. Generally, students borrow up to their cost of attendance.  This amount will be split evenly over the number of semesters per year and if applicable, the fee liability for that period is withheld and the remainder transferred to your Irish Bank Account.  (For example, if a student's fee was €15,000 per academic year and there was three disbursements in that year, DCU fees office would withhold €5,000 at each disbursement).    If a student borrowed €40,000 over a three semester academic year, the loan would be disbursed over the three periods, less the fee liability for that period. And always remember that interest rates will vary from disbursement to disbursement.

Eligibility for US Federal Aid

United States students studying in foreign schools are not eligible for grants from the US Federal government, but may apply for loans. The Federal Loan program is available for U.S. citizens or eligible non-citizens who are enrolled at least half time, making satisfactory academic progress, and are not in default on a previous loan or exceeding federal loan limits.

Eligible Programmes

• Degree (Undergraduate or Postgraduate)

• Masters

• PhD

Non-Eligible Programmes

• Nursing

• Higher Diploma

• Programmes with any portion based in the US (DCU Business School have Undergraduate Joint Degree programmes with portions based in USA - these programmes are not eligible for loans)

• Programmes at linked colleges of DCU

• Oscail/ DCU Connected - DCU Distance Learning Education

• Study Abroad or JYA Programmes/Exchange and Erasmus

• Joint Degree Programmes

• DCU Foundation Programmes

DCU students studying abroad or on an exchange at a US Institution or a Foreign Institution not approved by the Federal Loans Program are not eligible to receive Title IV and will not be eligible to receive loans while at that institution.


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Types of Federal Student Aid available


What aid you may be eligible for?

 Eligible students at DCU can apply for the following loans:

Direct, Direct PLUS and any Private loan are provided only to cover the primary costs of education (Tuition, student accommodation, books/supplies, commuter travel) and cannot exceed your 'Cost of Attendance' (i.e. the educational institution's official estimate of your tuition and living costs for that year). You may borrow a combination of Direct/ Plus/ Private loans. Loans are not intended to cover other expenses, not directly related to study. You should plan a budget and make sure you have enough money for your time of study. The exchange rate fluctuates, so your loans may not give you as much money as originally planned. You should keep this in mind when planning how much you wish to borrow. Borrow what you need, but remember you have to repay it. 

There are several federal loans available for U.S. citizens or eligible non-citizens from the US Dept. of Education for undergraduate and graduate students who are enrolled at least half-time in a degree programme, making satisfactory academic progress, and not in default or owing a return repayment on a grant or loan. The following loans are available to eligible students at DCU:

1.      Direct Loans

  • Direct Subsidized Loans - This loan is BASED on financial need as determined by the Department of Education. The loan is "subsidized" because the government pays the interest while you are in university at least half time. It also pays the interest during any authorized period of deferment and for the six-month grace period after you leave university or drop below half-time enrolment. Graduate Students may no longer apply for Subsidised Loans. See information at StudentAid website.
  • Direct Unsubsidized Loans - This loan is NOT based on financial need. Because it is "unsubsidized", you are responsible for paying the interest from the time the money is disbursed to the school. The interest may be paid as it comes due, or it may be postponed and allowed to accumulate while you are in university, during any authorized period of deferment, and for the six-month grace period after you leave university or drop below half-time enrolment. If payments are postponed, the interest accrues and is capitalized (added to your principal loan balance). If you choose this billing option, you will not make any payments while you are in university. However, this option adds to the amount you will have to repay on your loan when you leave university. It may also increase the amount of your monthly payment. These loans are open to Graduate Students.

Students who are borrowing through the Federal Stafford Loan Programme (subsidized and/or unsubsidized) must complete a Federal Master Promissory Note (MPN) annually in order to receive their Federal Stafford Loan funds. Section 12 of the MPN asks if you wish to pay interest while you are in university - please consider this carefully as the unsubsidized portion of your loan will continue to accrue interest for the life of your loan.

2.      Direct PLUS loans

This type of loan is available from the US Dept. of Education and is NOT based on financial need. The PLUS loan applications can be made to DCU from 1st May. See information on PLUS loans at StudentAid website

  • Direct Parent PLUS Loans - Parents are eligible for this loan if their child is a dependent undergraduate student as defined by the US Department of Education, if they meet certain credit guidelines and if the loan is certified by the university. Parents may use this loan to pay the entire Cost of Attendance – minus any other financial aid received for their dependent student (N.B. Undergraduates should first apply for a Direct Subsidised/ Unsubsidised Loan before their parents apply for a PLUS Loan.)  Parents who are not eligible for PLUS loans based on their own credit may obtain a creditworthy co-signer. Always check the interest rates.

Parents who are borrowing on behalf of their dependent children through the Federal Stafford Loan PLUS program are also required to complete a Federal Master Promissory Note and Application Form.

  • Federal Graduate PLUS Loans - Federal PLUS Loans are also available for graduate and professional students, effective for loans first disbursed on or after July 1, 2006. This loan is available even if you have no credit history and the interest rate is fixed for the life of the loan. You can borrow up to the full cost of education annually, less other financial aid received, and approval is not based on your income, financial need or debt-to-income ratio. You may also defer principal and interest payments on this loan while you are enrolled. N.B. Graduate / Professional student borrowers should first apply for a Stafford Loan before applying for a Graduate PLUS Loan.

Rules and regulations differ slightly when you are enrolled in a university outside the US. The MPN you sign whilst valid for 10 years in the US but you will need to complete MPN annually with each new application for federal aid.

Pell Grants and Perkins loans may not be used outside the US; repayment of these loans however may be deferred whilst you are in school in a foreign country.

Maximum Annual Limits for Federal Stafford Loans

Dependent Undergraduate Students

Subsidized (U.S. government pays interest while student is in university and for six months after graduation/withdrawal)  

Subsidized & Unsubsidized Combined

1st Year

$3,500

$5,500

2nd Year

$4,500

$6,500

3rd Year & Up

$5,500

$7,500

Independent Undergraduate Students

Subsidized (U.S. government pays interest while student is in university and for six months after graduation/withdrawal)

Subsidized & Unsubsidized Combined

1st Year

$3,500

$9,500

2nd Year

$4,500

$10,500

3rd Year & Up

$5,500

$12,500

Graduate Students and  Professional Students

Subsidized
(U.S. government pays interest while student is in university and six months after graduation/withdrawal)

Subsidized & Unsubsidized Combined (Unsubsidized only for Graduates)

Annual

Not applicable

$20,500

Aggregate Limits for Sub/ Unsub Loans

Year

Subsidized only

Total Aggregate (Subsidized & Unsubsidized)

Dependent Undergraduates(excluding those whose parents can't borrow PLUS loans)

$23,000

$31,000

Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)

$23,000

$57,500

Graduate and Professional Students

$65,500 (received before July 1, 2012)

$138,500

N.B. Actual loan amounts are based on individual eligibility.

There are no fixed annual or aggregate loan limits for PLUS Loans. A graduate or professional student may be awarded a PLUS Loan for up to the student's cost of attendance minus other estimated financial assistance.  Therefore, a graduate/professional student has additional PLUS eligibility beyond the maximum subsidized and unsubsidized loan limits. 

PLUS Loan amounts for parents & graduate/professional students: These amounts may be lower, depending on the eligibility determined by the Federal Aid Administrator in the International Office. Students who receive unsubsidized loans may pay the interest while they are in university with principal deferred until after they cease to be enrolled at least half time or they can choose to have both the interest and principle deferred until after they cease to be enrolled at least half time. Similarly, the total PLUS Loan amount borrowed by one parent or borrowed separately by more than one parent (including a non-custodial parent) may not exceed the student's estimated cost of attendance minus other financial aid awarded for the period of enrolment.


Dependant vs. Independent Student

A student's dependency status is determined from information provided on the FAFSA. It affects the Expected Family Contribution (EFC) and types of aid that you may be eligible to receive.

For the purposes of Title IV aid, a student is considered independent if he or she meets one or more of the following criteria:

  • The student is at least 24 years old by December 31 of the award year.
  • The student is an orphan or ward/dependent of the court, or was a ward/dependent of the court until he or she reached age 18.
  • The student is a veteran of the U.S. Armed Forces.
  • The student is working on a master's or doctorate program at the beginning of the award year for which the FAFSA is completed.
  • The student is married as of the date the FAFSA is completed.
  • The student has at least one child who receives more than half of his or her support from the student.
  • The student has a dependent, other than a spouse or a child, who lives with the student and receives more than half of his or her support from the student at the time the FAFSA is completed and through June 30 of the award year.

The student is considered dependent if he or she does not meet any of the preceding criteria for an independent student unless the financial aid administrator determines that the student is independent on the basis of special circumstances and performs a dependency override.

Please visit the following links to learn more about US Federal Student Aid:

http://studentloans.gov/

http://studentaid.gov/

http://www.fafsa.gov/


3.      Private loans

Private loans can be taken out with a bank/ lender subject to the applicant's credit rating and often requiring a co-signor - these are usually at commercial rates. They also need to be certified by the educational institution. Applications are made directly to the US lender for private loans. If you are applying for private loan, please contact us (see details below) to let us know.

Please visit the following links to learn more:

https://www.salliemae.com/

https://myglobaled.com/


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Student Loan Application Process

The application has six stages and typically takes 6-8 weeks.

We have deadlines for the receipt of documentation in our office:
30 November for February entry
31 July for September entry

Late loan application requests received after this deadline cannot be fast tracked. Applications received after the dates shown will be processed up to 5 September for September entry (but funds will arrive late) and then after 5 October (for autumn enrolments). Applications received for spring enrolments will be processed between 5 October and 30 November, and then after 5 February. 

All students must familiarise themselves with William D. Ford Direct Loan system through the Student Financial Aid Handbook. The Student Loan website will also take you through the key points of US student financial aid. Ensure you understand fully, what it means to borrow and what happens in the event of default on loans etc.


Stage 1: FAFSA (Free Application for Student Aid) and obtaining a SAR (Student Aid Report)

Whether you intend to apply for Federal (Stafford) or Private Loans, you must establish your eligibility by filling out the Free Application for Federal Student Aid (FAFSA) each year. You must do this online at Student Aid website and this will allow you to obtain a SAR.

‘DCU Federal School Code is: G26117 Dublin City University.’

If you do not put your email address on the online FAFSA, the 5-page SAR will be sent to the correspondence address listed on your FAFSA. If you have inserted your email on the online FAFSA, you must request the 5-page SAR from the Dept. of Education in Washington DC 1-800-4FED-AID (1-800-433-3243).

When you receive your SAR, please ensure you check it for any errors or omissions. Errors and omissions are listed on the 2nd Page of the SAR and items requiring correct information are usually emboldened throughout the SAR. N.B. Institutions located outside the USA will NOT receive this information electronically. We will NOT know you have completed the online FAFSA until you contact us by mailing us your paper SAR.

Federal regulations require us to check details that are not available on other versions of the SAR. Once you are in possession of the correct SAR, sign it and send it to us along with other required documents listed below.


Stage 2: Choosing a lender and obtaining a Master Promissory Note (MPN)
 

William D Ford Direct Loans are issued directly from the US Government.

Your Direct Loans cannot be processed without a signed and dated original Master Promissory Note (MPN). The MPN is usually obtained from the Lender and / or Guarantee Agency such as those shown above. If for any reason you have not obtained a MPN you can download these here: Federal Master Promissory Note (MPN).

Graduate Students or the Parents of Undergraduate students wishing to take a PLUS Loan must complete separate and additional Master Promissory Notes. These can be obtained from your lender or guaranty agency or downloaded here: PLUS Master Promissory Note

Please note that you MUST download the following documents with your Master Promissory Note:

  • Addendum to Federal Stafford Loan Master Promissory Note
  • Addendum to the Federal Stafford PLUS Loan Application and Endorser Addendum
  • Federal Stafford Loan Plain Language Disclosure
  • Federal PLUS Loan Plain Language Disclosure


Stage 3: Entrance Counselling

Federal Regulations require all students to complete entrance counselling prior to the disbursement of financial aid. We require all students to complete online entrance counselling and will not process loan applications without an Entrance Counselling receipt. In order to complete Entrance Counselling you must go to StudentAid and StudentLoan website. Also, see the student information here


Stage 4: Sending the documentation

Email International office at international.office@dcu.ie and Federal Aid Administrator (contact details below) advising that you wish to apply for Federal Aid.  The Federal Aid Administrator will email you and advise exactly which documents /steps you need to submit/put in place in order for your loan to be processed. A list of relevant documents including forms will be sent with the response from the Administrator:

  • Copy of acceptance letter from Dublin City University (€500 acceptance deposit must be paid)
  • Your 5-page SAR (see stage 1)
  • Copy of Data Waiver Form which the Federal Aid Administrator will provide
  • Copy of Loan Amounts Form which the Federal Aid Administrator will provide (A letter indicating how much you wish to borrow in Stafford loans, PLUS or private loans. The aggregate total cannot exceed the Cost of Attendance or COA less any scholarship or grant.)**
  • A copy of your qualifications (e.g. your high school diploma or your degree transcript)
  • Your completed and signed Master Promissory Note(s) (MPN) (See Stage 2)
  • A confirmation of completed entrance counselling (See Stage 3)
  • Copy of Credit Check if applying for a PLUS Loan
  • Copy of transcript
  • Copy of valid passport
  • Male applicants shall provide an evidence copy of registration for selective services

** If you are in receipt of any Scholarship/Grant/ Awards, you must notify the Federal Aid Administrator in advance by email. Any payments from grants/scholarships or awards will be noted on your Cost of Attendance and will reduce your financial need. If you fail to declare this information, DCU will reduce any further disbursements of funds due to you. DCU will also email you confirming how much you are eligible to borrow by calculating your Cost of Attendance (COA) and the administrator will send you the estimated COA in Loan Amounts form.

In the case of Parent PLUS Loans, DCU must have permission from the parent to release excess funds to a student. The parent’s signature is required on the Loan Amount Form.

The above mentioned list of documents should be mailed as soon as possible. The documentation list is not optional, and the procedure given is not expected to be the opening point for negotiation. If you would like to know why the information is required in this format, you should refer to the US Federal Government regulations.


Stage 5: Loan Approval

How is eligibility determined? The FAFSA is an organized method of gathering information about you and your family's financial situation. This information is then analysed according to US federal guidelines together with University guidelines. This insures that all applications are treated fairly and equitably. The results of this needs analysis indicate the difference between what can be expected from the family and the cost of education. It shows the ability, not the willingness, of the student and/or their family to pay for their education. This is used to determine whether the student has a financial need.

At application step, you will also be advised via email as to the determination of your eligibility for need based aid and non-need based aid. You will be required to confirm your intent to take this amount, or any other lesser amount prior to certification taking place.

DCU originates your loan that will be issued in equal disbursements as appropriate. You will receive an aid letter outlining aid programs for which you have been approved and the origination of loan dates. This aid letter can then be used for immigration purposes, i.e. to prove that you have access to sufficient funds.


Stage 6: Disbursement and Post Arrival information

On arrival at DCU, register for your program for the year 2019/ 20 at the earliest.

If you do not already have an Irish Bank account, you need to open one as soon as possible. DCU has a bank on campus – Bank of Ireland. Once opened, you should call into the fees office and advise that you are a US student on the Federal Aid programme. Ask to speak to the relevant person (currently Ms Laura Masterson) and provide this person with your bank account details as soon as possible. 

First part of federal loans is disbursed at the start of semester; tuition Fees are deducted where necessary. And excess funds are transferred to your Irish Bank Account by our Fees office. See more information regarding disbursement below.


Akanksha Mehta
Financial Aid Administrator 
International Office
Dublin City University 
All Hallows Campus
Grace Park Road
Dublin 9
Ireland

T: +35317008692

E: akanksha.mehta@dcu.ie        
                                                      

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Disbursement of Loans, Maintaining Eligibility and Satisfactory Academic Progress (SAP)


Disbursement of Loans

  • Federal regulations stipulate that Federal Loans are disbursed electronically directly to the school. The fees office will then advise students when funds are available.
  • Loan funds are disbursed in two or more disbursements - usually 2 equal disbursements for undergraduate students and 3 equal disbursements for postgraduate students.
  • Loan funds are disbursed (issued in the US) at the start of the loan period or the academic year and cannot be activated until you commence your programme. The processing time between the United States and Ireland can vary.

Please note that first instalment of federal loans cannot be disbursed until programme commencement, and can take some time to arrive in DCU's bank and subsequently to yours. Therefore, you must ensure that you have adequate funds for accommodation and general living for at least the first four to six weeks of your programme

Subsequent Disbursements during the academic year 

  • Subsequent or second disbursements take place January end, subject to the achievement of Satisfactory Academic Progress (SAP)
  • In order to make Satisfactory Academic Progress you must achieve a 40% grade average in the first semester's modules (Federal regulation). See SAP section below for further details.
  • Funds may not be disbursed for those students who have not maintained satisfactory academic progress and in such cases, you, the student will need to make alternative arrangements for the payment of any remaining tuition balance.
  • Third disbursements (generally only applicable to Postgraduate students) are disbursed in May, subject to the achievement of Satisfactory Academic Progress (SAP)

What implications do disbursement regulations have for students?

1) You are not eligible for University fee discounts if you pay your tuition with Federal Stafford Loan funds.

2) Your monies will only be available when you are enrolled at the University and will be applied to the payment of your tuition and other fees (subject to funds availability) in the first instance.

3) You must be enrolled at the University in order to receive the credit balance of any loan funds once tuition for each semester has been deducted.

4) If you fail your first semester you may not receive your second disbursement, since you have not maintained "Satisfactory Academic Progress" (see Federal Regulations and SAP)

Receipt of Funds, Authorisation and Transaction

The exchange rate floats, so you may not receive as much money as originally planned. It's always advisable to use a weaker exchange rate for your budget.

You will need to open an Irish bank account in order to receive your loans - this takes time and money-laundering regulations require stringent identity checks.

You will need patience!  The Financial Aid Administrator will provide you with all the information you need and will provide assistance from the point of application, so don't worry!


Maintaining Eligibility and Satisfactory Academic Progress

While in receipt of US Title IV loan funds (Subsidized, Unsubsidized and Graduate or Parent PLUS Loans)for the approved loan period outlined on your aid offer, Federal Regulations stipulate that you are required to be enrolled in your programme. Your student tuition and fees account must show a credit balance if you are to be considered enrolled.

Students receiving US federal aid funds must demonstrate ‘Satisfactory Academic Progress’ or SAP. Please see our section on Satisfactory Academic Policy here.


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After Study 

If you do not complete your course of study (Withdrawal)

In case you withdraw from DCU programme, please see section on Withdrawal Policy and R2T4 for details.


When you have graduated

The use of Federal Loan funds and Repayment of your Loan: Federal Loan funds are specifically to cover the cost of education. The primary cost of education is tuition, followed by associated expenses. Each loan has a grace period of 6 months. This means that six months from the date of your graduation or that you cease to attend, you will be required begin repayments.  N.B. Although entitled "graduation date", the date referred to is the date on which you cease to attend the University. You must check with your lender for full details on the repayment of your loan.


Your Responsibilities

  • Notify your lender or Loan Servicer of any changes in your status, including enrolment, graduation, changes to your address, telephone number and e-mail
  • Notify Dublin City University and the Financial Aid Administrator of any change to your term-time, vacation and permanent correspondence address and telephone number
  • Notify your lender if you fail to enrol at Dublin City University
  • Complete Exit counselling (see section on Student Information) if you graduate or withdraw from your course of study
  • Notify DCU and the Financial Aid Administrator at DCU if you withdraw your Federal Aid application before the start of term or withdraw from DCU after enrolment
  • Maintain Satisfactory Academic Progress, SAP
  • Provide confirmation of 'Satisfactory Academic Progress’ as requested


Repayment Plans

When you leave university or drop below half-time enrolment, your grace period begins. This special feature of Federal Stafford loans gives you six months before you must start making monthly principal and interest payments on your loans. If you re-enter university at least half time during your grace period, it is renewed for another six months. Therefore, you have the full grace period available when you leave university again.

Before repayment starts, you will be provided with repayment options and a Repayment Schedule from your lender or servicer for each type of loan you have.

If you do not receive these schedules toward the end of your grace period, contact your lender because repayment begins whether or not you are aware of it. In addition, all of the borrower benefits will only apply IF you make your first payment on time.

If you plan ahead, the repayment process will go smoothly. Start by knowing all your options. You will have a choice to make regarding the type of repayment plan you would like to use:

Standard Repayment - Under this plan, your monthly payment will remain the same over the entire repayment period. This repayment plan is the most economical. The term is for a maximum of 10 years.

Graduated RepaymentAs the name suggests, this plan typically begins with smaller payments, followed by a gradual increase in payments at specified intervals. Under this plan, you will probably pay more interest over the term of the loan. The term is for a maximum of 10 years.

Income-Sensitive Repayment - This plan ties the size of your payment to your income level, with adjustments to your payment made annually. The monthly payment must be large enough to cover accrued interest charges. This plan also may increase the amount of interest you pay over the term of your loan. The term is up to 10 years. However, your lender can use forbearance to lengthen the term for up to five additional years (15 years total).

Extended Repayment - This option is available for those who first borrowed on or after October 7, 1998, and who then accumulated loans that totalled more than $30,000. If you are one of these borrowers, you may extend your Standard or Graduated Repayment plan for up to a total of 25 years.

If at any time you need to change repayment plan, contact your lender or servicer immediately. You may be required to provide documentation.

For the most up to date information on Repayment Plans - visit website here.


Loan Consolidation

By the time you finish university, you may have a number of loans. These loans may be with more than one lender and may have different terms. Repayment can become complicated if you have to make different payments at different times of the month. Consolidation is a way to make repayment of multiple loans less complicated.

You can consolidate all your federal student loans into one loan with a fixed rate and a single, lower monthly payment. You pay no additional fees to consolidate your loans. More importantly, you may reduce the amount of each monthly payment by extending your repayment term. However, remember that a longer repayment term increases the amount of interest you pay over the term of your loan.

Learn more about Loan Consolidation here.


Deferment & Forbearance

POSTPONING PAYMENT with deferment: One major advantage of borrowing through the Federal Loan Program is the option you have to postpone repayment for a period under certain conditions. However, it is important to note how interest must be paid or not paid on various loans:

Federal Subsidized Stafford Loans: The federal government pays interest during in-university, grace, and authorized deferment periods.

Federal Unsubsidized Stafford Loans: The borrower is responsible for paying the interest that accrues during in-university, grace, and authorized deferment periods.

To apply for a deferment, contact your lender or servicer, and apply in time to have your deferment in place when you need it because processing can take several weeks.

You may renew a deferment, up to the maximum time allowed.

You may need to complete and submit separate deferment forms for different types of loans. With Federal Loans, one deferment form is usually all that is necessary.

You should continue making loan payments until you have been notified that the deferment is granted.

Keep copies of all forms and correspondence related to your deferment. If you do not receive written confirmation of your deferment, be sure to request it.

Postponing payments when deferment is not an option (Forbearance):  If you find yourself in temporary financial difficulty and no deferment option applies to you, you can request forbearance from your lender or servicer. Forbearance is granted at the lender's discretion and allows you to have months added to the term of your loan, temporarily reduce the amount of your monthly payment or temporarily suspend monthly payments. There are several forbearance options available. The two most common types of forbearance are:

Economic Hardship Forbearance: If your student loan payments exceed 20% of your total monthly income, you can apply for this type of forbearance. It is given in 12- month increments for a maximum of three years.

Administrative Forbearance: May be granted by your lender if you are delinquent on payments prior to entering a period of deferment. 

Note that interest continues to accrue on your loan during a forbearance. That interest must be repaid, which can result in higher monthly payments once the forbearance has ended. The federal government does not pay the interest on Subsidized Stafford loans while your loans are in forbearance. To apply for forbearance, contact your lender or servicer for information about their procedures.

Learn more about Deferment or Forbearance options here.


Delinquency and Default

When your monthly payment is late by 30 days or more, you are considered delinquent on your loan. Most lenders and servicers will contact you directly about delinquent payments and begin collection activity. Your delinquency may be reported to a credit bureau that could adversely affect your credit rating.

If you expect to have a problem making a monthly payment, contact your lender immediately. It is always easier to discuss alternatives before the due date rather than after a payment is late.

If you fall 270 days behind on a scheduled payment, you are legally in default on your loan agreement. Defaults are also reported to Internal Revenue Services and the lender can assume that you are not going to repay; and the lender may declare the entire amount you owe, including interest, as immediately due and payable. Defaults are reported to credit bureaus and stay on your credit record, whether or not you eventually pay off the loan. A report is made to all national credit bureaus and the consequences of default are severe:

  • You are liable for late charges which can be added to the principal of your loan, and on which you will then pay interest.
  • When your loan is in default, your US federal income tax refunds can be withheld to repay the loan.
  • Your wages may be garnisheed (a portion withheld for repayment).
  • You may have to pay attorney's fees and court costs.
  • You lose eligibility for all federal and state financial aid until you have made satisfactory repayment arrangements on the defaulted loan.
  • In a profession that requires a license to practice, that license can be denied renewal until you make satisfactory payment arrangements on your student loan.

To gain an understanding of Default, how to avoid Default and what to do, visit here.


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Participants and Important Terminology


Who's who in the Stafford Loan Program

The US Federal Government plays a key role in education lending throughout the Title IV Federal Aid Process. These loans are made by lenders. The federal government guarantees the loan in case of default. See also Guaranty Agency below.

The Student is the person who borrows the money under the Department of Education federal aid guidelines.

The Financial Aid Administrator at Dublin City University works with you (and your parents were applicable) to determine eligibility based on federal guidelines for different types of student loans (federal and private). The Financial Aid Administrator also certifies your federal loan application and the amount you can borrow.

A Lender actually provides the funds. The lender is the US Government or another financial institution in the case of private loans. The lender sends the money to the university. This money is deducted first towards any balance due on your student account. Any excess funds are given to you via bank transfer to your bank account in Ireland.

The School / University determines and certifies student eligibility for Direct loans, provides loan counselling for student borrowers, may deliver loan proceeds to students, reports enrolments and other information about Direct program borrowers, and complies with US laws and regulations governing the Direct Loan program. The school / university act as a fiduciary in these matters and is accountable for its administration of the program.

A Servicer is a company contracted by a lender to handle administrative aspects of the loan such as collection of payments, correspondence with borrowers, address changes, loan status updates and more. It is important to know the name of your servicer since quite often all communication regarding your loan will be with the servicer.

A Guaranty Agency is a state agency or a private, non-profit organization that administers Federal Program loans.

Important Federal Student Aid Terminology 

Accrued Interest

If you choose not to make interest payments while in university, in your grace period, or during an authorized period of deferment, then the interest will accumulate, and will be added to your principal amount at repayment.

Aid Offer Letter

This is an official document issued by the Financial Aid Office. It lists all of the amounts, and types (subsidized and unsubsidized) of aid in your financial aid package. This letter also includes the terms and conditions of your financial aid.

Award Year

The 12-month period during which you attend university, and for which your aid has been offered.

Capitalization

The process by which interest is added to the principal loan amount if you choose not to make interest payments (when otherwise required) while in university or in forbearance. This process increases the amount that must be repaid and will make your monthly payment larger.

Cost of Attendance (COA)

These expenses include tuition, room and board, books and supplies, fees and the student's living costs while attending university. The University using federal guidelines determines the COA.

Cohort Default Rate

The percentage of a University's Stafford borrower who defaults before the end of the fiscal year in which they entered repayment on their loans. The US Department of Education calculates this rate annually to determine the default experience of students who attended a particular school during a particular period. High default rates can result in the loss of a university's ability to participate in the William D. Ford Federal Direct Loan (Direct Loan) Program.

Default

The failure of a borrower to make instalment payments when due or to meet other terms of the promissory note or other written agreement(s) with the lender under circumstances. Where US Department of Education or the guarantor of the loan reasonably concluded that the borrower no longer intended to honour the borrower's obligation to repay a loan, if this failure persists for the most recent consecutive 270-day period.

Deferment

A period during which repaying loan principle is suspended as a result of the borrower meeting one or more of a number of situations or categories established by law. The borrower does not pay interest on subsidized loans during deferment; however, interest continues to accumulate during deferment of an unsubsidized loan.

Delinquency

The status of a loan when payment is late. Delinquency may be reported to a credit bureau after 30 days.

Disbursement

The lender's payment of loan funds to the University. Payment is made by electronic transfer of funds. Disbursement is usually made in two or more instalments during the year.

Expected Financial Assistance (EFA)

The Expected Financial Assistance is the amount of all other awards, scholarships, sponsorships etc. that a student (or the parents on behalf of the student) may be in receipt of. This amount is included in the Cost of Attendance (COA) calculations.

Expected Family Contribution (EFC)

The Expected Family Contribution is the amount that a student and family (if required) are expected to contribute toward the Cost of Attendance (COA). This amount is based on the students or the family's income and assets.

Federal PLUS Loan (PLUS)

Graduate students and parents on behalf of their undergraduate, dependent children may borrow this loan. Loans are made by lenders such as banks, credit unions, or savings and loan associations. Parents must not have an adverse credit history.

Federal Stafford Loan (Subsidized)

A Federal loan that provides federally subsidized, low interest loans to students in undergraduate, graduate or professional programs. Subsidized loans are awarded based on financial need.

Federal Stafford Loan (Unsubsidized)

A Federal loan that provides low interest loans to students in undergraduate, graduate or professional programs. Unsubsidized loans are not awarded based on financial need.

Financial Need

The difference between the students Cost of Attendance (COA) and the Expected Family Contribution (EFC) plus the students estimated financial assistance.

Forbearance

The process by which a repayment schedule can be restructured under certain conditions. The amount of the monthly payment may be temporarily reduced or suspended, or months may be added to the repayment term. You must contact your lender directly to receive forbearance.

Free Application for Federal Student Aid (FAFSA)

This is the free application that a student must file to apply for financial aid. The FAFSA is printed and distributed free of charge by the U.S. Department of Education. You must do this online at Student Aid website.

Guarantee Fee

This is an optional fee charged by some guarantee agencies and deducted from loan proceeds prior to disbursement. This fee helps offset the administrative costs, and equates to up to 1% of your student aid.

Grace Period

A feature of Federal Stafford loans that gives you six months after you leave university or drop below half-time status before you must start making monthly payments on your loan.

Interest

The fee that is charged by the lender in exchange for lending the money. The interest rate, usually expressed as a percentage of the loan amount, may stay the same for the term of the loan (fixed rate) or it may change periodically (variable rate).

Master Promissory Note (MPN)

A legally binding document between the borrower and the lender that obligates him or her to repay the loan according to its terms.

Origination Fee

A fee charged by the federal government and deducted from the loan funds prior to disbursement. The fee is used to offset administrative costs.

Principal

The amount borrowed. This is the amount to which interest is charged.

SAR

The report sent directly to a student from ED's Central Processing System (CPS) that summarises information submitted on the students FAFSA. It also provides financial-need calculations, including the students EFC based on submitted figures.

Satisfactory Academic Progress

The achievement of required Grade Point Average (GPA) within the defined timeframes, to ensure continued access to Financial Aid.

Separation Date

The date noted by your university to indicate when you graduate (when the final result is provided and not the actual graduation ceremony date), drop below half-time status or withdraw from university. The grace period on your loan begins on this date.


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Consumer Disclosure Information


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