FINANCIAL AID OFFICE
STUDENT LOAN PROGRAMS

Lender Selection Process for the Federal and Alternative Loan Programs

Student and parent borrowers of the Stafford Loan, PLUS Loan, and/or Grad PLUS Loan may choose any lending institution that participates in the Federal Family Education Loan Program (FFELP).  The basic terms of the loans (origination and default fees, fixed or capped interest rates, and deferment options) are set by the federal government. 

Student borrowers of the Alternative Loan may choose any lending institution of the private education loan market.  The basic terms of the Alternative Loans (origination/repayment fees and interest rates) are determined by the lender based on the borrower’s credit history and market rates (Prime or LIBOR). 

LMU Financial Aid Office requests information from members of the student lending community on the FFELP and Alternative Loan Programs through our Request for Proposal (RFP) process.  We do a complete assessment of our lender’s responses and seek optimal loan pricing, product and service, and value-added services for our student and parent loan borrowers.  To make your selection process easier, we have identified five participating lenders on our preferred lender list that have the most outstanding borrower benefits and customer service.   The following factors were considered in the selection of our lender partners and we recommend our borrowers to review the following factors when comparing lenders:

• Pricing – Our recommended lenders offer the most competitive borrower benefits such as no origination fees on Stafford Loans, interest rate reductions for borrowers who sign up for electronic repayment, and principal and additional interest rate reductions for making consecutive on-time payments.

• Service – Our recommended lenders provide user friendly custom websites to assist our borrowers with information and applications on loan programs available 24 hours a day.  For faster service, online loan applications can be completed with an electronic signature with the lenders.  Dedicated customer service representatives can assist borrowers to make an informed decision and assist with applying over the phone.  We have also taken into consideration feedback from our borrowers regarding expectation and level of service they receive.  If a particular lender generates complaints, we will strongly consider removing them from our list.

• Process and Technology – Our recommended lenders work with LMU’s own system to process, receive and return loan funds using Electronic Funds Transfer (EFT).  This helps create timely disbursements into the student’s account quickly and avoid confusion with manual processing and delays of paper loan checks.  Our lender’s website provide our borrowers convenience to electronically sign promissory notes, download deferment and forbearance forms, track loan history, make payments, and update personal information.

LMU Student Loan Programs Unit will approve loans with any lender or credit union of your choice if eligible.  We encourage you to compare different lenders so you may make an informed choice on cost saving benefits when borrowing and repaying the loan.  Our list of recommended lenders is reviewed and updated every one to two years.

LMU Financial Aid Office does not receive and does not accept inducements from lenders in exchange for a partnership on our preferred lender list.  We do not share in profits from student loans.  We have signed and adhere to the Statement of Ethical Principals and Code of Conduct as published by the National Association of Student Financial Aid Administrators (NASFAA) and as disclosed on our website.

Your feedback on our recommended lender list is welcomed!  You may send us an email at finaid@lmu.edu or contact us at (310) 338-2753.  Our office is located at 1 LMU Drive, Xavier Hall Suite 200, Los Angeles, CA 90045.

What is a Federal Stafford Loan?
A federal loan awarded to all students who apply for financial aid and who are U.S. Citizens or permanent residents. The student must be enrolled at least half-time to be eligible for the Federal Stafford Loan.

If you have a Federal Subsidized Stafford Loan, the federal government will pay the interest on your loan while you are in school and during your grace perioc, 6 months after you graduate or cease to be enrolled half-time.

If you have a Federal Unsubsidized Stafford Loan, you are responsible for paying the interest while in school, but can defer interest payments until after your graduate or cease to be enrolled half-time.

How much am I eligible to receive in Federal Stafford Loans?
All students enrolled in a Master’s program or combined Master’s and Credential may be eligible to borrow up to $18,500 per academic year in subsidized and/or unsubsidized loans. Students enrolled in a Non-Degree Credential program may be eligible to borrow up to $10,500 per academic year. The amount of the loan cannot exceed the financial aid budget, less grants, scholarships or employment awards from any source. Some students may qualify to have the Stafford Loan interest paid by the federal government while they are in school.

What is the interest rate?
The Federal Stafford Loan interest rate is a fixed rate of 6.8 percent.  This fixed interest rate is applicable while in-school, during grace periods, during periods of deferment or forbearance and during repayment. 

How will the loan funds be sent to the LMU?
Provided that you have completed the online Loan Entrance Counseling session and the Master Promissory Note (MPN), the loan will be sent in two disbursements; First disbursement in the fall semester and the second disbursement in the spring. These funds arrive via Electronic Fund Transfer (EFT) and are applied directly to your LMU student account.

When do I pay the loan back?
Repayment on this loan will begin after your grace period, 6 months after you graduate or cease to be enrolled at least half-time. You have 10 years to pay the loan back. Various repayment options are available and the loan period can be extended, if needed via consolidation. There is no prepayment penalty, so you can pay the loan earlier if you wish.

ARE YOU A FIRST-TIME STAFFORD LOAN BORROWER AT LMU?

How to Apply for Federal Stafford Loan:

Step 1:  Complete the 2007-2008 Free Application for Federal Student Aid (FAFSA) at www.fafsa.ed.gov.  List LMU School Code 011649 on the FAFSA.  Indicate your interest to federal student loans on the application.

Step 2:  Accept the award offer on the Federal Stafford Subsidized and/or Unsubsidized Loan on PROWL via Manegate.

Step 3:  Complete Loan Entrance Counseling at www.edfund.org.  Select EDTEST, Entrance Exam.  This federally mandated requirement is for your understanding of the borrower rights and responsibilities when borrowing federal loans.  Your Stafford Loans will not be disbursed until this requirement has been successfully completed.

Step 4:  Complete the Online Master Promissory Note (MPN).  Please review the list of lenders for Stafford Loans.  You are not obligated to use these lenders and may borrow from any lender or credit union of your choice.  Note, any lenders outside of LMU’s process may delay funding.  Please review the lenders terms and conditions to make an informed decision.  Apply online directly with that lender.  You will only need to complete this requirement once in your first year of borrowing.  This lender will fund your loans for subsequent years unless you choose to borrow from a different lender at a later time.  You will then need to complete a new MPN with your new lender.

LMU Financial Aid Office, Student Loan Programs Unit will certify the Stafford Loan once we receive an approval and request from the lender.  Your loans will be set to disburse equally over the terms of enrollment, fall and spring, unless it is your final term and you will receive one disbursement.  Your loans are scheduled to be received in your student account no sooner than 10 days prior to the start of class.