Types of Financial Aid: Loans

General Information

At Cal Maritime, loans are the most popular way of paying for education.  Stafford Subsidized, Stafford Unsubsidized, Perkins, PLUS, and Private/Alternative are all offered. Further information about educational loans, including your rights and responsibilities, is available at Student Loan Borrower Assistance.

A FAFSA must be completed each year to be considered for a Stafford or a Perkins Loan. In addition to the FAFSA, loan borrowers must complete a Loan Reply Sheet each year for each type of loan. Your Financial Aid Award Letter will tell you where to link to the Loan Reply Sheets for both Stafford and Perkins Loans. You will be directed to Cal Maritime's List of Preferred Lenders to choose a lender at the Simple Tuition website. The reason for the Preferred Lender List is to give a choice of lenders which do not charge loan fees, and will pay the guarantor fee, if necessary. The list has lenders which give the students (Stafford Loan) and parents (PLUS Loan) benefits. These benefits can be upfront or long term loan reductions. The Simple Tuition website is used so that you can check the benefits and payments you will need to make when the loans are in repayment.

Loans are disbursed each semester. You must complete your required units each semester to receive the following semester’s loan check.  

Since federal law requires that all loans be disbursed in two equal installments during the loan period, one disbursement is made each semester.

When loan funds reach Cal Maritime, the student's CMA fees are deducted from the loan and the difference is released to the parent (for PLUS Loans) or the student for any other loans. Refunds are made available within 10 days. If the student or parent would prefer another method of disbursal of funds, please contact the Financial Aid Office so that we can assist you.

Please email the Financial Aid Office with questions you may have regarding any aspect of the loan program at: finaid@csum.edu.

The Financial Aid Office will electronically transmit your Stafford Loan information to Ed Fund for guarantee and Ed Fund will send you a letter explaining where to complete the Entrance Loan Counseling and Master Promissory Note (MPN) if needed. The MPN is a form that you complete when applying for federal student loans. The MPN is intended to simplify and streamline the loan application process. The MPN is used by Cal Maritime as a multi-year promissory note. This allows you to sign a MPN the first year and use it for future Stafford (and Perkins) Loan borrowing throughout attendance at Cal Maritime. For your first Stafford or Perkins Loan at Cal Maritime, you must complete a Master Promissory Note (MPN) after completing Entrance Loan Counseling. For your convenience, you may complete the Stafford Loan requirements at the specific website we use for Stafford Loans. A letter from ED Fund, our guarantor, will tell you what website to visit for Stafford Loan Entrance Counseling and completing the Stafford MPN. If you are eligible for a Perkins Loan, Cal Maritime is sending you the Perkins MPN, Entrance Counseling and Loan Disclosure Statement with your Award Letter.

Federal Subsidized Stafford Loan
The Federal Subsidized Stafford Loan program makes loans to students through lending institutions such as banks and credit unions. The interest rate on Stafford Loans is 6.80%, starting 7/1/06.

 Repayment begins six months after you leave school or cease to be enrolled at least half-time. The way the federal government subsidizes this loan is the Department of Education pays the interest on your loan(s) while you are in school and during a 6-month grace period after your at-least-half-time enrollment. See Table 1 below for loan limits.

Federal Unsubsidized Stafford Loan
The Federal Unsubsidized Stafford Loan is a non-need based loan. The federal government does not pay interest for you while you are in school. You may choose to make interest payments while in school, or have them deferred until you begin repayment. The principal balance of your loan is deferred while you are enrolled at least half-time. Interest is normally capitalized when entering loan repayment, thus avoiding compound interest while you are enrolled. Regular loan payments begin six months after you cease to be enrolled at least half-time. See Table 1 below for loan limits.

Table 1
	Dependent*	Independent		Maximum
Academic Year	Sub & Unsub	Sub & Unsub	Add’l. Unsub	Sub & Unsub
First Year	$3,500	$3,500	$4,000	$7,500
Second Year	$4,500	$4,500	$4,000	$8,500
Third and Remaining Years	$5,500	$5,500	$5,000	$10,500
Aggregate Limits:
Dependent Undergraduate	$23,000	——	——	$23,000
Independent Undergraduate	——	$23,000	$23,000	$46,000
*For dependent students whose parents are unable to obtain a PLUS loan, the amount a student can borrow under the unsubsidized program is the same as for an independent student.

Federal Perkins Loan
The Federal Perkins Loan is awarded on the basis of financial need as determined by both FAFSA data and the Financial Aid Office. This loan has a fixed 5% interest rate. No interest accrues while you are in school and during a 9-month grace period after you either leave school, or cease to be enrolled at least half-time. Undergraduates may borrow up to $4000 per year and a cumulative total of $24,000 during four years culminating in a bachelor degree.
 

Federal PLUS Loan
The Federal PLUS (Parent Loan for Undergraduate Students) helps parent borrowers pay college expenses for dependent students. Parents of dependent undergraduate students may borrow up to the cost of education minus any financial aid received by the student. The interest rate for this loan is 8.50% starting 7/1/06. Payments on this loan begin immediately, although payment can be deferred by the lender for up to four years. Before signing the Promissory Notes, parents should ask their lender about deferment options in case they would like to apply for one.

To qualify for a PLUS loan, parents must be a U.S. citizen or an eligible non-citizen, have a valid social security number and pass a credit check. For the credit check, parents generally must not have any outstanding tax liens, unpaid judgments, delinquent or defaulted loans, extensive credit card debt, bankruptcy, foreclosure or wage garnishment within the past five years. Parents who cannot pass the credit check may still be able to receive a PLUS loan if they know someone who can pass the credit check and is willing to co-sign their loan.

Dependent students whose parents have been denied a PLUS loan may want to apply for an Unsubsidized Stafford loan and should e-mail a request to the   Financial Aid Office if the student would like the Unsubsidized Stafford Loan.

Alternative Loans
In addition to the federal loan program, many lenders offer alternative educational loans. The interest rate and repayment provisions vary from lender to lender. Check with the lenders for current rates. We recommend that students use alternative loans only as a last resort, since interest rates are higher for these loans and are based on credit ratings. We strongly urge students who apply for alternative loans to complete the FAFSA, if they have not already completed it, so that they will be able to receive much better interest rates and repayment provisions.