Loans

The Arkansas Colleges of Health Education provides financial assistance to students through federal and private loans.

Federal Student Aid

The Arkansas Colleges of Health Education has qualified to participate in programs under the Higher Education Act of 1965, as amended (HEA) and the Federal student financial assistance programs (Title IV, HEA programs).

Federal student financial assistance programs will be available to students that are eligible who attend Arkansas Colleges of Health Education in the form of Title IV, HEA Stafford Direct Loans through the William D. Ford Federal Direct Loan (Direct Loan) Program.  The Direct Loan Program is the largest federal student loan program and the lender is the U.S. Department of Education.  These loans must be repaid back with origination fees and interest charged to the student, for which additional information may be found at StudentAid.gov.

Student loans should be borrowed wisely and to pay for educational expenses at the Arkansas Colleges of Health Education.  Educational expenses may include costs for: tuition, fees, room, board, books, supplies, equipment, dependent child care expenses, transportation, and rental or purchase of a personal computer.

Students are eligible to borrow two types of Direct Loans at ACHE:

  • Direct Unsubsidized Loans
  • Direct PLUS Loans

Direct Unsubsidized Loans

Direct Unsubsidized Loans have an annual and aggregate limit osteopathic medical students may receive.  Students may be eligible to borrow up to $47,167 per year based upon a 12-month academic calendar, but the amount will be pro-rated based upon the total number of months there are in the student’s academic calendar (10-month, 11-month and 12-month). The total outstanding aggregate eligible osteopathic medical students may borrow in Direct loans and previously borrowed Federal Family Education Loans (FFEL) is $224,000 with a maximum of Subsidized loans of $65,500.

Direct PLUS Loans

The amount of Direct PLUS Loans students may be eligible to borrow may not exceed a student’s cost of attendance minus any other financial aid they may receive for the academic year.  Students who wish to borrow a Direct PLUS Loan will apply at StudentLoans.gov.  A credit check will be performed to determine if the student has an adverse credit history.

Adverse Credit History

Students with an adverse credit history may still receive a Direct PLUS loan through one of these two options:

  1. Obtaining an endorser who does not have an adverse credit history or
  2. Documenting to the satisfaction of the U.S. Department of Education that there are extenuating circumstances relating to your adverse credit history.

Students that are approved for a PLUS loan due to adding an endorser or providing satisfactory extenuating circumstances will need to complete PLUS counseling before disbursement can occur

Obtaining a Credit Report

It is important to check your credit report as an adverse credit history may affect your ability to be approved for a Direct PLUS Loan.  Federal law allows anyone to request a free credit report every 12 months at AnnualCreditReport.com, which allows you to check your credit with three major credit reporting agencies (Equifax, Experian and TransUnion).

The three major credit reporting agencies generally have the same information so we recommend you check your credit at different intervals throughout the year.  Checking your credit often ensures information is correct and allows you to catch signs of identity theft early

Direct Loan Interest Rates & Fees

Students who borrow Direct Loans are required to repay those loans back with interest, which will affect the total amount that must be repaid.  The interest rate for a Direct Loan is determined by Congress and is a fixed interest rate for the life of the loan based upon when the first disbursement occurred.  Students who borrow Direct Loans will have a loan fee deducted proportionately from each loan disbursement that is received.  View the below charts for the most current Direct Loan Interest Rates and Fees.

Direct Loan Interest Rates

Loan Type Borrower Type Loans first distributed on or after 7/1/17 and before 7/1/18
Direct Subsidized Loan Undergraduate Student 4.45%
Direct Subsidized Loan Undergraduate Student 4.45%
Direct Unsubsidized Loan Graduate or Professional Student 6.00%
Direct PLUS Loan Parent and Graduate/Professional Student 7.00%

Direct Loan Fees

Loan Type Borrower Type Loans first distributed on or after 10/1/17 and before 10/1/18
Direct Subsidized Loan and Direct Unsubsidized Loan Undergraduate and Graduate/Professional Student 1.066%
Direct Plus Loan Parent or Graduate/Professional Student 4.264%

Sample Loan Repayment Schedule

Listed below are two charts that gives examples if you pay the interest as it accrues or if you don’t pay the interest and it is capitalized for two types of loans:

  • Direct Unsubsidized Loan as an undergraduate student:
    The chart below shows the difference in the total amount you would repay on a $15,000 Direct Unsubsidized Loan if you pay the interest as it accrues during a 12-month deferment or forbearance period, compared to the amount you would repay if you do not repay the interest and it is capitalized.
If you pay the interest as it accrues… If you do not pay the interest and it is capitalized…
Loan Amount $15,000 $15,000
Interest for 12 Months $1,238 (paid as accrued) $1,238 (unpaid and capitalized)
Principal to be Repaid $15,000 $16,238
Monthly Payment $184 $199
Number of Payments 120 120
Total Repaid $23,315 $23,899

The example in the chart above shows payments made under the Standard Repayment Plan at an interest rate of 8.25%, the maximum interest rate for Direct Unsubsidized Loans made to undergraduate students.  In this example, you would pay $15 less per month and $584 less altogether if you pay the interest as it accrues during a 12-month deferment or forbearance.

  • Direct Graduate Loans
    The chart below shows the difference in the total amount you would repay on a $15,000 Direct PLUS Loan if you pay the interest as it accrues during a 12-month deferment or forbearance period, compared to the amount you would repay if you do not repay the interest and it is capitalized.
If you pay the interest as it accrues… If you do not pay the interest and it is capitalized…
Loan Amount $15,000 $15,000
Interest for 12 Months $1,575 (paid as accrued) $1,575 (unpaid and capitalized)
Principal to be Repaid $15,000 $16,575
Monthly Payment $202 $224
Number of Payments 120 120
Total Repaid $25,863 $26,839

The example in the chart above shows payments made under the Standard Repayment Plan at an interest rate of 10.5%, the maximum interest rate for Direct PLUS Loans.  In this example, you would pay $22 less per month and $975 less altogether if you pay the interest as it accrues during a 12-month deferment or forbearance.

Consequences of not repaying student loans

Repayment of your student loans is important as if you are delinquent or default on your students loans you may be faced with:

  • Adverse credit reports, federal offset and litigation
  • Charges may be added to your loans, such as:
  • School’s collection expenses
  • Late charges
  • Attorney’s fees
  • Repayment schedules for loans that have been accelerated are more stringent than the original repayment schedule.
  • No longer eligible for any deferment provisions
  • Federal and State tax refunds may be seized
  • Wages garnished
  • Borrower loses eligibility for further funding from the Federal Student Aid programs.

Forbearance or Deferment Options

Under certain circumstances students with federal student loans may be eligible for forbearance or deferment that allows temporary postponement or reduction of federal student loan payments.  Students that wish to request deferment or forbearance on their student loans must apply through their loan servicer.  However, they must still continue to make monthly payments on their student loans to avoid default until they are approved for a forbearance or deferment.

What is Deferment?

A deferment is a period during which repayment of the principal and interest of your loan is temporarily delayed.

What happens to my loan during Deferment?

Students who receive a deferment on their federal student loans do not need to make payments on them.  The federal government may pay the interest on certain loans during a period of deferment:

  • Federal Perkins Loan
  • Direct Subsidized Loan, and/or
  • Subsidized Federal Stafford Loan

The federal government does not pay the interest for any loans that are deferred that are Unsubsidized or PLUS loans.  The student is responsible for paying the interest that accrues (accumulates) during the deferment period, but your payment is not due during the payment period.  If you don’t pay the interest on your loan during deferment, it may be capitalized (added to your principal balance) and the total amount you repay will be higher.

Who may be eligible for a loan deferment?

Situations you may apply for deferment during a period of: Is Deferment available? If so, how long is deferment available?
Direct Loans FFEL Loans Perkins Loans
Enrolled at least half-time Yes Yes Yes
Enrolled in an approved graduate fellowship program or approved rehabilitation training program if disabled Yes Yes Yes
Unemployment or inability to find full-time employment Yes (Up to 3 years) Yes (Up to 3 years) Yes (Up to 3 years)
Economic hardship (Includes Peace Corps service) Yes (Up to 3 years) Yes (Up to 3 years) Yes (Up to 3 years)
Service qualifying for Perkins Loan discharge/cancellation No No Yes
Active duty military service during a war, military operation, or national emergency Yes Yes Yes
During 13 months following the conclusion of qualifying active duty military service, or until you return to enrollment on at least a half-time basis, which is earlier, if you: Are a member of the National Guard or other reserve component of the U.S. Armed forces and Were called or ordered to active duty while enrolled at least half-time at an eligible school or within six months of having been enrolled at least half-time Yes Yes Yes

Students who are received a Direct Loan or FFEL Program borrower who had a loan that was first disbursed (paid to you on your behalf) before July 1, 1993 may be eligible for additional deferments for such situations as teaching in a teacher shortage area, public service, being a working mother, parental leave or temporary disability.  Additional information may be found from your loan servicer.

How to request a deferment

Students who have Direct Loan(s) will need to request a deferment from their loan servicer(s).  Students who have Perkin Loan(s) will need to request a deferment from the school they were attending at the time they received the loan.

Students who are enrolled in school at least half-time that would like an in-school deferment will need to request for enrollment verification from the Office of the Registrar.

What is forbearance?

Students that are granted forbearance may be able to stop making their payments or reduce their monthly payments for up to 12 months.

What happens to my loan during forbearance?

Students that are unable to make their scheduled loan payments, do not qualify for a deferment may be able to request a forbearance from their loan servicer.  Students may be eligible to receive two types of forbearances:

  • Discretionary forbearance may be granted by lender due to:
  • Financial Hardship
  • Illness
  • Mandatory Forbearance will be granted by the lender if you meet the eligibility criteria:
  • Medical, dental internship or residency programs, and you meet certain requirements
  • Total amount you owe each month for all the student loans you received is 20 percent or more of your total monthly gross income (additional conditions apply).
  • Serving in a national service position for which you received a national service award.
  • Performing teaching service that would qualify for teacher loan forgiveness.
  • Qualify for partial repayment of your loans under the U.S. Department of Defense Student Loan Repayment Program.
  • Member of the National Guard and have been activated by a governor, but you are not eligible for military deferment.

The federal government does not pay the interest for any loans that are in forbearance.  The student is responsible for paying the interest that accrues (accumulates) during the forbearance period, but your payment is not due during the payment period.  If you don’t pay the interest on your loan during forbearance, it may be capitalized (added to your principal balance) and the total amount you repay will be higher.

How to request a forbearance

Students request a loan forbearance from their loan servicer and may be required to provide documentation to support the request.  The loan servicer will provide you with confirmation if your loan forbearance is approved or denied.

Trouble Making your Student Loan Payments

Students that are having any trouble making loan payments, should immediately contact their loan servicer to explore all options available to them.  Students that do not qualify for a deferment or forbearance may qualify for a different repayment plan that offers lower payments than you’re currently making.

Why should I take out federal student loans instead of a private loan?

Federal Student Loans offer students:

National Student Loan Database System (NSLDS)

Students may visit National Student Loan Database System (NSLDS) to access or inquire about their Title IV Loans and/or grant data.  NSLDS is the U.S. Department of Education’s central database for student aid.  It receives data from schools, agencies that guaranty loans, the Direct Loan program, and other U.S. Department of Education programs.  NSLDS allows students to be informed about outstanding federal student loans:

  • Types and amounts
  • Interest accrued
  • Loan Servicers
  • Repayment Amounts

Note: Information about your loans will be reported to the National Student Loan Data System (NSLDS). Information in NSLDS is accessible to schools and loan servicers for specific purposes as authorized by the Department of Education.

Financial Awareness Counseling

Students are encouraged to complete financial awareness counseling if they are currently paying for or planning to pay for higher education. It provides students with the:

  • Basics of financial management
  • Information on their current federal student loan debt (and their current student loan debt if they enter information about their private student loans).
  • Estimates of what their student loan debt is likely to be at the time they leave school.

Entrance Counseling

Students who receive Direct Unsubsidized Loans as a graduate/professional student for the first-time will need to complete Entrance Counseling before disbursement.  Students who receive Direct PLUS Loans as a graduate/professional student for the first-time will need to complete Entrance Counseling, even if you have completed it for a subsidized or unsubsidized loan as a graduate/professional student.

Master Promissory Note

The Direct Loan Program has two different two types of Master Promissory Notes (MPN) for Direct Unsubsidized loans and Direct PLUS loans. Both MPN’s may be reviewed, electronically signed and submitted online at StudentLoans.Gov.

The Master Promissory Note (MPN) is a legal document in which you promise to repay your Direct loan(s) and any accrued interest and fees to the U.S. Department of Education.  It also explains the terms and conditions of your student loan(s). The MPN will be a multi-year note and will be good for up to ten years and includes:

  • How interest is calculated
  • When interest is charged
  • Available repayment plans
  • Deferment and cancellation provisions
  • Your Personal Identifying Information
  • Your School Information
  • Information about Two References

Borrowers that sign a MPN are agreeing to repay all loans that are made under a MPN even if:

  • You don’t complete your education
  • You can’t get a job after you leave school, and/or
  • You didn’t like the education you received

Students must sign a MPN before disbursement of their loan(s) may occur and at that time will receive the Borrowers’ Rights and Responsibilities Statement.  Students who require additional information about their Borrower Rights and Responsibilities should contact the Office of Financial Aid for assistance.

Exit Counseling

Students who graduate, withdraw or drop below half-time are required to complete Exit Counseling online at StudentLoans.gov.  Completing exit counseling is important as it will provide you with important information to prepare you for repayment of your student loans.  You will be asked to provide contact information (name, address, e-mail address, telephone number) for your:

  • Closest living relative
  • Two references who live in the United States
  • Current or expected employer (if known)

Loan Disclosure Statement

Students who will receive Direct Loans will receive a Loan Disclosure Statement from the Common Origination and Disbursement (COD) System for Direct Unsubsidized Loans and Direct PLUS Loans available in an electronic format via the Direct Loan Electronic Master Promissory Note (MPN) Web site.  The COD System will e-mail a message to a borrower’s e-mail address providing notice that a disclosure statement is available on the Direct Loan Electronic MPN Web site.  The borrower can sign in with his or her Federal Student Aid PIN to retrieve, view, and print his or her disclosure statement(s).  Students who opt out of electronic statements will receive a paper disclosure statement.   The disclosure statement contains the following information:

  • Anticipated date and amount of the disbursement before the disbursement is made.
    • Which funds are from subsidized loans and which are from unsubsidized loans.
    • Student’s right to cancel all or a portion of a loan or loan disbursement and have the loan proceeds returned to the U.S. Department of Education.
    • Procedures and deadlines by which the student must notify the school that he or she wishes to cancel the loan or loan disbursement.
  • Disbursement Notification
    • Notice when FSA loan funds are credited to the student’s account.
    • Notification will be sent no earlier than 30 days before and no later than 30 days after crediting the student’s account.

Federal Student Aid Feedback System

Students may file a complaint, report suspicious activity, or provide positive feedback via the FSA Feedback System.

Private Student Loans

Students may choose to receive private student loans to pay for their educational expenses up to their cost of attendance minus any other financial aid they may receive for the academic year. Private loans may be found through a variety of lenders with different interest rates (fixed and/or variable), repayment plans, forbearance and deferment options.  Additional information regarding the differences between federal and private student loans may be found at StudentAid.ed.gov.

The Arkansas Colleges of Health Education does not provide information regarding private education loan from a lender to a prospective borrower.  Students may request a written or electronic self-certification form for private education loans from the Office of Financial Aid who will provide assistance when appropriate in completing the form.

Students should compare private student loans against federal student loans before deciding to borrow from private sources.  Private student loans may not be able to provide students with as many benefits and may be more expensive than Federal Student Loans.