SulSULLIVAN UNIVERSITY SYSTEM. SUS private loan option Last resort to cover a gap in aid Co-signer...

SulSULLIVAN UNIVERSITY SYSTEM

CAREER EDUCATION FUND

• SUS private loan option

• Last resort to cover a gap in aid

• Co-signer required

• Full time students only

WHAT IS THE CEF LOAN?

• $1000 minimum loan amount in academic year• $8000 maximum loan amount in academic year• $16,000 total loan amount for program• Minimum loan term is as short as 12 months• Maximum loan term is as long as 60 months• Regular payment of principal and interest

begins the 1st day of the 2nd month once studies cease

• Gap - cash payments= loan amount

LOAN AMOUNTS AND REPAYMENT

• Identified via the packaging screen in Campus Vue

• Remaining balance to schedule must be a positive amount

• Used to determine the required monthly cash payment plan

• Gap= cash payment plan + loan amount

WHAT IS A GAP?

• Includes institutional charges only

• Cost of attendance minus all other aid

• Tuition• Fees• First quarter

books• On campus

housing• Meal plan

BUDGETInstitutional

Charges

WHAT DOES THE LOAN COVER?

• Student must attempt all other aid eligibility first• Ineligible for stipends• Loan cannot create a credit balance• Co-signer required on every loan and expected to

pay if student defaults on payments• Equal monthly cash payments due while in school• Employees are not eligible• Cannot be in default • FPD and Chancellor approval for extenuating

circumstances beyond $8000 cap

STUDENT REQUIREMENTS

• Payments must be current in order to receive disbursements

• Must apply for credit based loan and be declined with co-signer

• In the event a credit occurs, this will reduce the loan amount not the cash payment plan

• Required to notify Financial Planning if additional aid is awarded after being packaged with the loan

• $15 late fee• $25 NSF fee• Note- payments carry over into next academic year

even if another CEF loan is not needed

STUDENT REQUIREMENTS

• Allows the student to attend when all other options have been exhausted

• No interest accrual while in school• Debt forgiveness upon graduation• 8% simple interest• No origination fees• No prepayment penalty

INCENTIVES

• Offer only as a last resort• Explain the stipulations and

expectations in detail• Reduce the loan by what

they can afford verses automatically providing minimum payment

• 100% complete documents• Route paperwork properly

and efficiently• Seeking additional approval

is rare, not the norm• Pros and cons

• Think outside the box• Discuss future planning and

budgeting• Provide ideas to reduce

expenses in order to reduce the amount of the loan (ex: does it benefit to move from 6Q to 8Q? We should converse w/customer & ADM and if changed we must ensure new enrollment is received)

• Live with family or roommates• Ask fact finding questions

EXPECTATIONS OF FPC

• Do not offer the minimum monthly payment simply because it reduces the out of pocket cash payments

• We need to reduce their need on the loan as much as possible

• The question should be “What can you afford?”• Have the student and parent/cosigner complete a

budget using an online tool such as http://www.bankrate.com/calculators/smart-spending/home-budget-plan-calculator.aspx

• This lists their total expenses and total income• The difference will reflect what they can and can’t

afford• Print this out and attach this to the CEF packet for

the FP file

HOW MUCH CAN YOU AFFORD?

• CEF Truth In Lending• Borrower application• Co-signer application• Promissory note (requires notary if

signature cannot be witnessed by FPC)• Private loan self-certification (non expired)• Cash payment plan schedule• ACH form

REQUIRED CEF PAPERWORK

CEF TRUTH IN LENDING

CEF BORROWER APPLICATION

CEF CO-SIGNER APPLICATION

CEF PROMISSORY NOTE

PRIVATE LOAN SELF-CERTIFICATION

CASH PAYMENT SCHEDULE

ACH FORM

• Copy of ACH form no later than 3 business days before first payment

• Notify the office if loan approval is within 3 business days of first draft and direct students to make their first payment to the Business Office

• If using a card as method of payment, this information should be sent to the Business Office, not with Accounting or in the FP file

• Copy of cash payment schedule

• All original documents (except card information)

• A copy of the CEF packet should be provided to the borrower and cosigner. A full copy is retained in the FP file

• Credit Card information should never be stored outside of the Business Office

Business Off ice Accounting

ROUTING OF DOCUMENTS

INTERNAL FORMS TO CALCULATE PAYMENTS

INTERNAL FORMS TO CALCULATE PAYMENTS

TOOL FOR TIL AMORTIZATION

WWW.AMORTIZATION-CALC.COM

• Box A= APR (8%)• Box B= Loan term (determined by

total gap)• Box C= Total interest paid during full

loan term• Box D= Loan amount being financed • Box E= Amount totals loan + total

finance

• List each estimated disbursement amount

• List each estimated disbursement date (generally week 9 each quarter)

• Do not forget to sign/date the notary box if borrower and co-signer are physically present and signing the application in your presence

• If all parties are not present, notary is required

LOAN PROMISSORY NOTE

• Section 2: Cost of attendance and estimated financial assistance

• A= total cost of attendance • B= all other estimated financial aid

assistance (minus CEF and cash payment plan)

• C= difference between A & B (shows need)• Be sure to also include the back side of the

form which lists sections 5 & 6 which provides definitions and the paperwork reduction notice for informational purposes

• Reminder- These forms do expire. This date is located in the top right corner

PRIVATE LOAN SELF-CERTIFICATION

FIRST ACADEMIC YEAR BORROWER

Student is left with a $2500 gap for their packaging

How much would the monthly cash payments be for this student?

$130 while in school

How much in total cash payments?

$1170 ($130 * 9 months)

How much would the loan amount be for this student?

$1330 ($2500 – $1170)

How would you list these in the packaging and on the award letter?

CEF fund source and cash payments are broken out per quarter in Campus Vue and on the award letter

EXAMPLE 1

• SECOND ACADEMIC YEAR BORROWER• There was a $2500 gap in the first academic year• There is a $7000 gap in the second academic year• How much is the total gap?

• $9500• How much is the new monthly payment?• $205 per month (Total gap of both is used to calculate payment)• How much are the total payments in the second academic year?

• $1845 ($205 * 9)• How much is the loan for the second academic year?

• $5155 (2nd acyr gap – 2nd acyr total payments)• The 1st year gap is taken out when figuring the 2nd acyr loan- it is

only used to determine the new payments

EXAMPLE 2

You determine that the student needs a CEF loan of $8500. What should you do in this case?

Since the loan must be <$8000 to not require Chancellor approval, we should include the difference

in the student’s payment plan

You determine that the student needs a CEF loan of $9000 but the student absolutely cannot afford the $1001 difference on top of their payment plan. What should you do in this case?

Since the loan amount is over the $8000 academic year limit we should attempt to request the additional

approval.

WHAT WOULD YOU DO?

• Interoffice Memo including the latest “clean” ISIR transaction

• ALL CEF documents• Award letter• PLUS loan showing denial and if flagged for

reconsideration the COD notice showing the parent attempted to be reconsidered but was denied (if applicable)

• Alternative loan denial with co-signer• Budget calculation as proof that they can make the

payment• Applicable Admissions paperwork and

recommendation letter (ex: HS or college transcripts for grade review)

REQUIRED FOR EXCEPTIONS

• Did they link their taxes? Confirm the EFC. A high EFC will get push back

• We have the authority to self select them for FAFSA verification and obtain tax information (link or transcripts)

• Include the budget they completed and use this to justify that they can make the payment they are telling you they can afford

• Provide this information with the CEF packet• Email to your Director of Financial Planning• Director reviews the request and sends to

Chancellor/President/VP of Enrollment for approval• Result is sent to FPC • Have the student sign their award letter

PROVE THE STUDENT IS A GOOD RISK

INTEROFFICE MEMO