Update: Median Loan Debt

In accordance with new gainful employment regulations (34 CFR § 668.6(b)) effective July 1, 2011, schools are to disclose the median loan debt incurred by students who complete the Managing Cosmetology program. This debt not only includes Direct Loans, but also private loans.

2011-2012: $5,500

2010-2011: $0

2009-2010: $0

Since the College was accepted into the Title IV program in May of 2010, many students opted to use payment plans for their tuition instead of loans from private lending institutions. Some students also received financial assistance from state programs such as TAA and WIA.

Assistance Available From Federal, State, Local, and Institutional Programs

The College offers a range of need-based and non-need based financial assistance:

Direct Loans^SM

Commonly known as Stafford Loans for students and Parent Loan for Undergraduate Students (PLUS) loans for parents, the Direct Loan program offers financial assistance to students at a low interest rate. It is important to understand these are loans and need to be repaid to the government.

PELL Grants

The Pell Grant is a program used by the U.S. Department of Education (USDE) to provide assistance to low-income students. Based on information provided in the FAFSA, eligibility for the program is determined by a USDE formula passed into law by the U.S. Congress. This award is a grant, and will not need to be repaid after graduation. Unfortunately, students holding any bachelor's degrees are not eligible to participate.

Youth WIA program

The Workforce Investment Act (WIA), is a Federal act administered by the Ohio Job and Family Services (ODJFS) and is available to qualified students. This is determined by the student's county Job and Family Service office and cannot be granted by the College.

TAA

The Federal Trade Adjustment Assistance (TAA) program is to help trade-affected workers return to suitable employment as quickly as possible. This ia available through each county's Job and Family Service office. Students are selected by that office and cannot be granted by the College.

Grants from the State of Ohio

There are grants available to Ohio residents for higher education. Please visit the Ohio Board of Regents for applicable grants.

In-house payment plan

Students unable or not interested in need-based funding may also pay tuition as agreed upon in the student contract. All in-house payment plans are subject to a $5 weekly ($20 monthly) processing fee.

Federal Student Financial Aid Penalties for Drug Law Violations

Per HEA Sec. 484(r)(1); (20 U.S.C. 1091(r)(1)), it is important current and prospective students understand the consequences of being convicted of drug related crimes during the academic award year. If a student is convicted of any offense involving the possession or sale of illegal drugs, and was receiving Title IV, HEA program funds, they will lose their eligibility for any Title IV, HEA grant, loan, or work-study assistance.

If eligibility is lost, the College will send a notice in a timely manner to each student who lost eligibility for Title IV, HEA assistance as a result of the penalties under HEA Sec. 484(r)(1). The notice of eligibility loss under the Title IV, HEA assistance program will be written in a separate, clear, and conspicuous manner with advisement of the ways in which a student can regain eligibility under HEA Sec. 484(r)(2); (20 U.S.C. 1091(r)(2)).

Student Loan Information

Enrollment

It is important to note the College only provides courses and Federal Financial Aid for FULL-TIME students. The College no longer offers part-time classes.

Master Promissory Note

A valid Master Promissory Note (MPN) needs to be established before any Federal loans are disbursed to the student's account. As defined by the USDE, the MPN is a "legal document in which you promise to repay your loan(s), any accrued interest and fees to the USDE. It also explains the terms and conditions of your loan(s). Unless your school does not allow more than one loan to be made under the same MPN, you can borrow additional Direct Loans^SM on a single MPN for up to 10 years."

It is important to understand that Direct Loans^SM are just that: loans. It's highly important these loans be paid back after graduation. The College encourages each student to visit USDE's website at www.StudentLoans.gov to complete the MPN and Entrance/Exit counseling sessions. The U.S. Department of Education further advises the MPN must be signed in one session and take 30 minutes to complete.

Initial Loan Counseling for Student Borrowers

Federal regulations mandate that all Direct Loan borrowers receive Entrance Counseling before their loan can be processed. This requirement can be fulfilled by either attending an Entrance Counseling session, or by doing the on-line counseling available on the Direct Loan website at www.dl.ed.gov. Failure to attend an entrance counseling session or perform the on-line counseling will result in the cancelation of the loan. The student will then be responsible for the immediate payment of the outstanding tuition balance.

Per the USDE website,

Entrance Counseling will walk you through the Direct Loan process and explain your rights and responsibilities as a borrower. All first time Direct Loan borrowers must complete entrance counseling before their loans can be disbursed.

In this process, you will learn about the following:

1.      Direct Loans^SM

2.      Managing your educational expenses

3.      Other financial resources to consider that may help pay for your education

4.      Your rights and responsibilities as a borrower

To ensure the College follows the proper discontinuation procedures, the student must notify the administration. If a student withdraws from the Managing Cosmetology program before completion, then a letter declaring the student's decision to leave must be written and turned in to the administration. A discontinuation fee of $150 and calculation of remaining tuition due (if applicable) will be made and sent to the student for payment.

Subsidized and Unsubsidized

There are two main types of Stafford Direct Loans^SM: subsidized and unsubsidized. A student with a subsidized loan will not have interest accrued on their borrowing until the expiration of the six-month grace period. The grace period for student loans starts after successful completion or discontinuation of the College's Managing Cosmetology program. Students obtaining unsubsidized loans will have the interest accrued on the borrowings during the educational and grace period. Students of unsubsidized loans have the option of paying any accrued interest while attending the College.

Grace Periods

Grace periods vary between each type of loan. All loan grace periods start after a student graduates or leaves the College for any reason. The allotted amount of time as a grace period for Federal Stafford Direct Loans^SM is six months. PLUS loan borrowers are subject to repayment the date of full disbursement. The first payment on PLUS loans is due within 60 days after the final disbursement. However, a parent PLUS borrower who is a student themselves can defer repayment while still enrolled at least half-time at a qualified school. Also, for PLUS loan disbursements made after July 1, 2008, the borrower can defer for an additional six months after the borrow is no longer enrolled at least half-time. Any accrued interest not paid by the borrower during deferment will be capitalized with the loan.

Payments (IMPORTANT!)

The USDE wants all students to be aware all Direct Loans^SM are real loans, and need to be repaid. They are just as real as car loans or mortgages. Everyone borrowing Federal student loans are expected to make their loan payments in full and on time, according to their repayment schedule. Failure to do so will result in default. It is important to note the student has an obligation to repay the full amount of the loan. This is true whether or not the student completed the Managing Cosmetology program, is unable to find employment upon completion, is dissatisfied with the course, or does not receive the educational or other services purchased from the College.

The USDE's Entrance Couseling Guide for Direct Loan Borrowers provides sample student budgets and repayment schedules.

Repayment Plans and Other Options

Depending on which repayment plan is used, each student has generally 10 to 25 years to repay their student loans. The student has different options available to repay their student loans upon their due date.

The website from the USDE has an estimated repayment calculator for student to use. Questions about repaying Direct Loans^SM should be directed to the loan servicer. Information regarding the loan servicer is available at www.nslds.ed.gov.

Common repayment plans:

·    Standard repayment - This option allows the student to pay a fixed amount until all of the student loans are paid in full. The minimum monthly payment will be $50.00, and are allowed up to 10 years to repay the loan.

            Since the loans are to be paid in the shortest period of time, the monthly payment under the standard plan may be higher than with other options. However, since a ten-year time frame is used, the student may also pay the least amount of interest.

·         Extended repayment - An extended repayment plan allows for a fixed annual or graduated repayment amount for no more than 25 years. Qualified students must have more than $30,000 outstanding in Direct Loans^SM. This plan is beneficial to students in need of a lower monthly payment. While the monthly loan payments will be lower, the interest has a longer period of time to accumulate. Thus, the student will ultimately pay more under this option.

·    Graduated repayment - This plan starts payments out low and increases them every two years with a repayment period of ten years. This payment plan is ideal for students who expect their income to rise steadily over time. The monthly payment will not be less than the amount of interest that accrues between payments. While the monthly payments will increase over time, no single payment will be greater than three times that of any other.

·    Income Contingent Repayment (ICR) - This plan is for borrowers of Direct Loans^SM only. This provides the most flexibility for Direct Loan^SM repayment without causing financial difficulties. Every year, the monthly loan payment is calculated on the basis of the student's Adjusted Gross Income (AGI, plus the spouse's income for married couples), family size, and the total amount of the Direct Loans^SM. The ICR plan will allow your monthly loan payment to be the lesser of:

1.   The amount paid if repaid in 12 years multiplied by an income percentage factor which varies with the annual income, or

2.   20 percent of the student's monthly discretionary income. 

The unpaid portion of accumulated loan interest will be capitalized (added to the loan principle) once each year, if the student's payments do not cover it. Capitalization of interest will not exceed 10 percent of the original amount due when the student entered the repayment period. Interest will continue to accumulate, but no longer be capitalized.

In an ICR plan, 25 years is the maximum repayment period. If the loans have not been fully repaid under this plan, the unpaid portion will be discharged. Time spent in deferment or forbearance does not apply. However, the student may have to pay taxes on the discharged amount.

The USDE provides more information on Income Based Repayment on the IBR Fact Sheet.

More information on repayment options can be found in the publication Funding Education Beyond High School: The Guide to Federal Student Aid. A copy of this publication is available in the main office or on the on-line at the USDE website.

Electronic Payments

Some student may be eligible for a reduction in interest rate by enrolling in electronic debiting. Along with receiving a student loan statement electronically, a student can make a loan payment on-line or opt for recurring loan payments through electronic debit. The student's bank can make an automatic debit from a checking or savings account. These payments are sent to the loan holder for processing.

There are advantages in using an electronic debit system. It's convenient and efficient, payments will always be on time, and there is no need to remember to mail a monthly check. To sign up for electronic debit, please contact your loan servicer.

Payment Difficulties

If the student finds it difficult to repay their student loans, they are strongly encouraged to contact their loan servicer as soon as possible. The loan servicer will help determine the best course of action regarding the loan repayment. Option available are:

·    Modifying/Changing repayment plans.

·    Requesting a deferment, provided certain requirements are met. Deferments allow the student to temporarily stop making loan payments.

·    If eligibility requirements for a deferment are not met, the student may request a forbearance. In certain situations, a forbearance allows a student to temporarily stop making payments on the loan, temporarily make them smaller, or extend the time available for repayment.

If no action is made to rectify the problem of non-payment, then the student loan could go into default. This creates serious consequences.

Default

For Federal Financial Aid purposes, default means the failure to make payments on student loans according to the terms of the MPN. The MPN is considered a binding legal document authorized at the time of loan. The College, the financial institution that made or owns the loan, the loan guarantor, and Federal government have the authority to take action to recover any money owed. Some consequence of default include:

·    National credit bureaus can be notified of your default, which will harm your credit rating. In the future, this will make it more difficult to buy a car or house.

·    The student will be ineligible for additional Federal Student Aid, if there is any decision to return to school.

·    Loan payments can be deducted from your paycheck.

·    State and Federal income tax refunds can be withheld and applied toward the amount owed.

·    Late fees and collection costs will be assessed on top of what is owed.

·    The student can face legal action.

If a student loan is in default, more information is available at the Department of Education's Default Resolution Group website.

Loan Cancellation (Discharge)

Certain circumstances all students to have their loan discharged. Teachers serving in a low-income or subject matter shortage area may be qualified to have student loans canceled or deferred.

Loan Forgiveness for Public Service Employees

Students employed in a public service job may have the balance of the loans forgiven, if 120 on-time monthly payments are made under certain repayment plans after October 1, 2007. Eligible students must be a full-time public service employee during the same period of time the qualified payments are made and at the time of cancellation. The amount forgiven is the remaining outstanding balance of accrued interest and principal on certain Direct Loans^SM that are not in default. The information at Public Service Loan Forgiveness  provides more detail on the subject.

Consolidation