Important Federal Loan News for Borrowers
On August 17, 2022, the U.S Department of Education (ED) announced details of the Fresh Start Initiative for certain borrowers with a defaulted federal student loan and regaining financial aid eligibility.
The Fresh Start Initiative eliminates student loan default, and makes it possible for borrowers with a federal student loan in default to:
- Regain access to federal financial aid (i.e. Pell grant, SEOG, work-study, etc., if eligible)
- Have access to other federal student aid benefits restored
- Reenter “current” status for the defaulted loan
The Fresh Start Initiative does not apply to all student loans, and if there are other eligibility issues, i.e. ineligible SAP status, students must resolve those issues before they can be eligible for the Fresh Start Initiative.
Defaulted student loan borrowers can qualify for the Fresh Start Initiative in one of two ways:
- By returning to school and apply for Title IV aid by completing the FAFSA. The school processes their financial aid eligibility based on the Department of Education guidance.
- Students who do not return to school can contact the loan servicer and make payment arrangements by selecting a repayment plan in accordance with guidance in the Fresh Start Fact Sheet.
On Aug. 24, the Biden Administration and the U.S. Department of Education also made two (2) major announcements regarding student loans, including payment and interest moratorium and two loan forgiveness options.
First, an additional postponement of student loan repayment has been extended from August 31 to December 31, 2022. This means that student loan borrowers who should be in repayment are not required to make payments on their student loans until the end of the repayment extension. However, borrowers can continue paying down of principal on loans borrowed during this time. Payments will automatically resume in January 2023.
Second, the loan forgiveness program will provide for up to $20,000 in debt cancellation to borrowers who were Pell Grant recipients, when they borrowed federal student loans OR up to $10,000 in loan forgiveness for borrowers who were non-Pell Grant recipients. To be eligible, borrowers must have an individual income less than $125,000 (or up to $250,000 for married couples).
Additionally, eligible student loan borrowers can still enroll for the Public Service Loan Forgiveness (PSLF) Program. Borrowers also have the ability to sign up for the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) Program. This limited time opportunity allows borrowers to receive credit for past periods of repayment that would otherwise not qualify for PSLF. Borrowers must sign up for this limited time opportunity before the deadline of Oct. 31, 2022.
Cuyahoga Community College is committed to promoting student success through responsible student loan borrowing. Student loans are borrowed money that has to be repaid, with interest, to the U.S. Department of Education. The William D. Ford Federal Direct Loan is a low-interest loan for students to help pay for the cost of college education. Moderate student loan borrowing demonstrates financial responsibility and ensures students incur limited debt to finance their education.
- Students that are in a "repayment loan status", payments will automatically stop from March 13, 2020 through December 31, 2022. Repayment will begin January 1, 2023.
- To provide relief to student loan borrowers during the COVID-19 national emergency, federal student loan borrowers are automatically being placed in an administrative forbearance, which allows you to temporarily stop making your monthly loan payment.\
- The suspension of payments will last until December 31, 2022. Read the borrower Q&As to learn more.
- Students undergoing cancer treatment may be eligible to receive additional deferment on their qualifying federal student loans for up to six months following the conclusion of their treatment. Students with loans made before the enactment of Sept. 28, 2018, do not qualify for this program. For detailed information regarding Loan Deferment for Cancer Treatment, please visit Federal Student Aid’s resource guide Deferment for Cancer Treatment.
Public Service Loan Forgiveness Program
The US Department of Education recently announced significant changes to a federal student loan forgiveness program that aims to help government and nonprofit workers but has failed in many cases to deliver on its promise of debt relief.
Eligibility for the Public Service Loan Forgiveness program is temporarily expanded through Oct. 31, 2022, so that it now includes borrowers who have older loans that didn't originally qualify as well as those who were in the wrong repayment plan but met the other requirements.
Annual Student Loan Acknowledgment
Complete an annual student loan acknowledgment each year to accept a new federal student loan. The goal is to help students understand how loans will affect their financial future.
Who should complete this?
Borrowers accepting a subsidized/unsubsidized loan, a PLUS loan for graduate/professional students, or a PLUS loan for parents.
How long will it take?
Most people complete the acknowledgment in less than 10 minutes.
What do I need?
- Verified FSA ID
For First-time borrowers ONLY, you will also need:
- School Name
- Degree Name
- Field of Academic Program
What am I acknowledging?
1) If this is your first time accepting a federal student loan, you are acknowledging that you understand your responsibility to repay your loan.
2)If you have existing federal student loans, you are acknowledging that you understand how much you owe and how much more you can borrow.
FEDERAL STUDENT LOAN REPAYMENT RESOURCES:
Default Fresh Start Initiative
Fresh Start Fact Sheet
Fact Sheet: Public Service Loan Forgiveness (PSLF) Program Overhaul
Public Service Loan Forgiveness (PSLF) Help Tool | Federal Student Aid
NEW STUDENT LOAN BORROWERS:
First-time student loan borrowers are required to complete an Entrance Counseling session as well as the Master Promissory Note prior to borrowing a student loan. The Entrance Counseling session helps students understand their rights and responsibilities as a student loan borrower. The Entrance Counseling and Master Promissory Note must be completed before student loan funds can be approved.
EXISTING STUDENT LOAN BORROWERS:
Students who have borrowed federal student loans are required to complete and Exit Interview Counseling session upon graduating, dropping below six (6) credit hours, or withdrawing from school. The Exit Counseling session can be completed online at www.nlsds.ed.gov. The Office of Student Financial Aid & Scholarships also provides comprehensive financial education counseling sessions to assist students with understanding all student loans borrowed and potential repayment options.
William D. Ford Federal Subsidized Loan (FDLS)
- Up to $3,500 for students (0-29 credits) - 1st year
- Up to $4,500 for students (30+ credits) - 2nd year
- Subsidized student loan interest is deferred while enrolled in at least half-time/part-time status (6 credits)
- Effective July 1, 2012 - subsidized loans are no longer eligible for interest subsidy during the 6-month grace period
- The 2022-2023 interest rate is at 4.99% for the Direct Subsidized Loan
William D. Ford Federal Unsubsidized Loan (FDLU)
- For independent students, up to $6,000 in addition to the subsidized student loan
- For dependent students, up to $2,000 in addition to the subsidized student loan
- Unsubsidized student loan interest is capitalized while enrolled in at least half-time/part-time status (6 credits), and payment is deferred
- The 2022-2023 interest rate is at 4.99% for the Direct Unsubsidized Loan
- UNSUBL Form (for students who's parent's are unwilling to provide FAFSA information)
William D. Ford Parent Loan for Undergraduate Students (PLUS)
- Parents may borrow loans for undergraduate students to assist with the cost of educational expenses
- Student must be enrolled in at least 6 credits per semester
- Amount of loan may be up to the cost of attendance, less any financial aid that the student receives
- Interest rates and amounts based on approved credit rating; May require a cosigner
- For the 2022-2023 academic year, the Direct PLUS loan interest rates are fixed at 7.54%
DISCLAIMER: For student and parent loan borrowers, any information regarding loans borrowed will be sent to the National Student Loan Data Systems (NSDLS) and may be provided to other servicers.
Nursing Education Assistance Loan Program (NEALP)
- Must be repaid if student does not serve as a full-time nurse in Ohio for five years
- Ohio students enrolled in at least 6 credit hours and accepted into an approved Ohio pre-licensure nurse education program
- Up to $1,500, based on estimated family contribution (EFC) on the FAFSA, and enrollment status
- For additional information regarding NEALP and how to apply, please visit the Ohio Department of Higher Education Regents website
Charles E. Schell Loan
- Must be an enrolled student for credit or in a workforce program at Cuyahoga Community College
- Must be a resident of Ohio, West Virginia, Kentucky or adjoining States
- Must be between the ages of 15 and 25 years of age
- Must be a citizen of and born in the United States
- Must maintain a 2.0 cumulative grade point average at Cuyahoga Community College
- Schell Loan application
Private Education Loan
- Students must complete the FAFSA application
- Loans are offered by private lenders, with unique criteria and features, based upon the lender
- Students may be eligible to borrow when enrolled as full-time, half-time, or less-than-half-time status in degree and certificate programs, as well as in vocational programs
- Interest rates may be fixed or variable
- Additional information about private education loans
Cuyahoga Community College no longer participates in the Perkins Loan Program. For student who have previously borrowered Perkins Loan, please contact ECSI for questions and concerns regarding repayment.