LOAN QUESTIONS

How do I apply for a student federal loan?

Federal Loans (Perkins, Stafford , Graduate PLUS) require that a financial aid application – FAFSA – be completed for every academic year, for which the borrower is interested in receiving loans. Once the Financial Aid Office receives your FAFSA from the federal processor, we will determine your eligibility for the different types of federal loans available.

An electronic Financial Aid Notification (eFAN) will be sent to you to let you know what loans have been offered. You will need to accept the offer on your eFAN, which will prompt UCLA to send the certification of your loan eligibility to the lender. Before the loans are funded, you will also need to complete a promissory note for the loan(s) you are planning to borrow. Please refer to Do I need to complete loan promissory notes every year? for additional information about promissory notes. Refer to the FFELP Guide and Graduate PLUS Guide (available under Publications on this site) for more detailed information.

NOTE: First time student borrowers are also required to complete a Debt management Session with Student Loan Services, before their loans can be disbursed. The DMS can be completed on the web at www.loans.ucla.edu.

BACK TO TOP

How do I apply for a parent federal loan?

UCLA requires that a financial aid application – FAFSA – be completed for every academic year, for which the borrower is interested in receiving Parent PLUS loans. Once the Financial Aid Office receives your FAFSA from the federal processor, we will determine your eligibility for Parent PLUS. An electronic Financial Aid Notification (eFAN) will be sent to you to inform you and your parent what your parent how much they can apply for in a parent PLUS.

To apply for parent PLUS, the borrower must request the loan and complete a Master Promissory Note (if borrowing for the first time or changing a lender) at https://opennet.salliemae.com . Once the application process is complete the lender will contact UCLA Financial Aid Office and we will verify your eligibility.

BACK TO TOP

What are Private Loans?

Private Loans are funded by banks and private lending institutions. These loans are credit based and are not federally regulated so their terms will vary depending on the lender. Private Loans that require certification by the Financial Aid Office can be certified up to a student's Cost of Education minus other aid received for the period. To find out more information about Private Loans, please refer to The Private Guide and Private Loan Preferred Lender List, available in the FAO Publications on our site.

BACK TO TOP

What is OpenNet?

OpeNet is Sallie Mae's origination system. UCLA uses OpenNet to process and monitor student and parent federal loans. You can access this site at https://opennet.salliemae.com to:

* Complete and sign your (federal and Sallie Mae private loans) promissory notes electronically.
* Get real-time information on the status of your loans.
* Print out your promissory notes (if you prefer to complete them via mail).
* Update your address, phone number, references, etc.

BACK TO TOP

Do I need to complete loan promissory notes for federal loans every year?

You are required to complete promissory notes annually for the Perkins Loan. Perkins promissory notes will be mailed to you by Student Loan Services if/when you accept this loan on your Financial Aid Notification (FAN) - subject to change for 09-10 academic year.

Federal Loans (Stafford and PLUS) require that a Master Promissory Note (MPN) be completed only once, when you borrow for the first time. New borrowers who select one of UCLA's preferred lenders can complete their MPN on the web (please see Preferred Lender List for Federal Loans for lender's application link). A new MPN would be required if you decide to switch lenders. Borrowers who select to borrow from a lender not on UCLA's preferred lender list will need to contact their lender for instructions on how to complete an MPN.

BACK TO TOP

Do I need to complete loan promissory notes for federal loans every year?

Private loans require a new promissory note to be submitted every year. At the time you apply and are approved for a private loan, the lender will provide the promissory note for you to complete or they will refer you to a link where you can complete your promissory notes on line.

BACK TO TOP

I applied for a loan but have not received any disbursements?

A couple of factors may prevent your loan from being funded in a timely manner:

•  The lender is not in possession of you promissory notes. To verify that your promissory note is complete contact –

•  For Stafford and PLUS loans processed with one of UCLA's electronic lenders– contact Sallie Mae at 888-272-5543

•  For Stafford and PLUS loans processed with a non-Sallie Mae lender – contact your lender directly

•  For Perkins Loan – contact UCLA Student Loan Services at 310-825-9864

•  For private Loan – contact your lender. Private lender contact information can be found on the Preferred Lender List: Private Loans under ‘Publications' link on this site.

•  You are a first time borrower and have not completed a Debt management Session. If you are borrowing a Perkins, Stafford or Graduate PLUS Loan for the first time at UCLA, you MUST complete the Debt Management Session requirement with Student Loan Services at www.loans.ucla.edu .

BACK TO TOP

What is a preferred federal lender and why are they preferred?

Every year, the Financial Aid Office and UC Office of the President evaluate many federal lenders and prepare a list of preferred lenders in order make it easier for our parents and students to select a lender for their educational loans and to compare the borrower benefits that are available. Preferred lender selection is based on the following criteria:

• Borrower benefits offered – the borrower benefits provided by our preferred lenders are comparable to or better to those offered by any other lender in the industry.

• Ease of process for the borrower – all of our preferred lenders support a totally paperless application and e-signature process on the web that allows our borrowers to complete the application process in minutes, 24/7. All of our preferred lenders disburse funds to UCLA via electronic funds transfer, which allows us to apply loans as a credit against students' charges and deposit refunds to students' bank accounts.

• Ease of process for the school – all of our preferred lenders support a totally paperless, fully electronic process to originate and disburse loans. This allows us to certify and disburse loans within 1-2 business days (compared to 1-2 weeks for a non-electronic process).

• Customer Support for the borrower –UCLA's preferred lenders have a dedicated team of customer service representatives who can answer all of your loan questions.

• Customer Support for the school – the Financial Aid Office has a dedicated team of professionals who understand our process and are available to us in order to obtain information, identify potential issues and resolve problems. As the result, the Financial Aid Office is able to ensure a much smoother, more error-free process for loans certified with one of our preferred lenders.

BACK TO TOP

What is a preferred private lender and why are they preferred?

Every year, the Financial Aid Office and UC Office of the President evaluate many private lenders and prepares a list of preferred lenders in order make it easier for our parents and students to select a lender for their educational loans and to compare the borrower benefits that are available. Preferred lender selection for private loans is based primarily on price with secondary consideration given to the loan process supported by the lender. Please refer to the preferred private lender list for information on whether their process is electronic or manual.

BACK TO TOP

Can I borrow a loan from a lender that is not on UCLA's preferred lender list?

Yes. However, if you select a lender that is not listed on our preferred lender list we would recommend that you check with the Financial Aid Office to determine whether we can process your loans electronically. If the lender you select is not an ‘electronic lender', your loans will be managed via a paper process. This means that:

• We will not be able to certify your loans electronically. Paper certification process takes longer and is subject to delays because information may need to be faxed or mailed to the lender.

• We will not be able to monitor the loan process to identify errors and ensure a timely delivery of funds because we do not receive electronic status updates from the lenders that are not electronic.

• The lender will not be able to disburse your funds electronically. Instead, a paper check will be sent to Student Loan Services at the beginning of each term that you will need to pick up in person.

• Because the loan will be disbursed via a paper check, the Financial Aid Office will not be able to disburse those funds to your Billing and Receivable (BAR) account in order to pay any outstanding charges (i.e. fees).

Because of the limitations of the paper process, it is important that the above factors are considered when choosing a lender who is not on UCLA's electronic lender list.

BACK TO TOP

Will I need a co-signer for my private loan?

What Are Private Student Loans?

Private student loans are issued based on credit. This means two things for those applying for a private student loan.

• The loan will be based on the borrowers credit score
• Normally, the better the credit score, the better the interest rate

What this means to you

Some students benefit by applying for a private student loan. The borrower must remember though, if he/she has a cosigner, the cosigner is just as responsible for repayment of the loan as the borrower is. By cosigning your name a loan, you’re guaranteeing that you will repay the loan should the borrower fail to make payments.
A lower interest rate can mean that the borrower will have lower monthly payments. It can also mean the loan can be paid back quicker.

Who needs a cosigner?

Generally there are two circumstances when a consigner is needed, even if the borrower has some credit.

One of those times is when the borrower does not have an established credit history which leads to a low credit score. Having a cosigner when applying for private student loans, such as a Sallie Mae Smart Option Loan or a Tuition Answer Loan, may increase your odds of being approved.

The second circumstance to use a consigner would be to obtain a loan with a lower interest rate. The difference in monthly payments on a $10,000 loan can be $50 or more when comparing a 8% interest rate and a 12% interest rate. Also the difference in the accrued interest rate could be as much as $4900 over the life of the loan. Certainly something to give thought to!

Pitfalls To Look Out For

Having a cosigner can be a win-win situation, but it can also have its drawbacks. Here are some things to consider before cosigning for a private student loan.

• Make sure if the borrower does fail to repay, that you can make the payments yourself.
• Make sure the person you’re cosigning for is trustworthy. Cosigning between girlfriends/boyfriends is never a good idea. If the romance goes South, the other one could be left holding the bag. Cosigning for a bum who won't work or flunks out of school can be a hard pill to swallow also.
• If you do cosign, make sure you get copies of all the papers. Remember, those with the best paper trails win.
• Get an agreement, in writing and notarized, that the borrower will repay you all fees incurred including the monthly payments, should they fail to repay the loan and you’re forced to. You don’t want to wind up years down the road and the borrower tells a Judge that you volunteered to repay the loan as a gift.

Now that you have this information, if you cosign for a loan, make sure you do it right! Cosigning for a private student loan has its pros and cons, just make sure you know what they are before signing on the dotted line.

 

BACK TO TOP