A Guide for Financial Aid 2007-08

It is important to understand the terms of the loan, your rights and responsibilities, and the consequences if you become delinquent or default on your loan.

Following is important information regarding the Federal Perkins Loan. The specific terms of the loan are spelled out in detail in the promissory note.

The Federal Perkins Loan is to be used for educational purposes, and must be repaid.

The Perkins Loan Office at Calvin College holds your Promissory Note for your Federal Perkins Loan. Your contact is:
Jason Porte
Perkins Loan Office
Calvin College
3201 Burton SE
Grand Rapids, MI 49546
(616) 526-6078

The loan is interest-free, and no repayment is required as long as you are enrolled in school at least halftime (this is a federal regulation). Interest on the loan during repayment is 5% simple interest. Repayment begins 6 months after you cease to be enrolled at least halftime.

The maximum amount a student may borrow through the Federal Perkins Loan Program is $4,000 per year as an undergraduate and $6,000 per year as a graduate student. The maximum cumulative amount a student may borrow is $20,000 as an undergraduate and $40,000 as a gradate student including amounts borrowed as an undergraduate. Although these are the maximums allowed, most students at Calvin Seminary are not eligible for these amounts because of the limited funding Calvin has in this program.

Acceptance of the Federal Perkins Loan generally does not affect your eligibility for other types of financial aid. The amount of the loan or other aid may be reduced if you receive other aid that we were not aware when we offered the loan or if we receive additional information, which reduces your eligibility for financial aid.

Your Federal Perkins Loan Promissory Note details the terms of the loan including the amount of your loan and the interest rate. The Promissory Note also specifies when you must begin to make payments of principal and accrued interest. Generally payments are due quarterly. Payment amounts vary depending on the loan balance, but $120 per quarter is the minimum payment.

There are no charges assessed for making this loan available to you. However, there may be charges assessed for collection of the loan if it becomes delinquent. These costs may include a $6.00 monthly late charge and collection costs up to 33.33% of the outstanding loan balance.

Failure to make payment as required may result in your loan going into default. The consequences of defaulting are severe and are specified in your Promissory Note. Defaults can often be prevented by contacting the Calvin College Perkins Loan Office if you are unable to make payments on time.

The Federal Perkins Loan Program contains deferment and cancellation provisions. Deferments are ways to postpone payment on your loan provided you meet certain conditions. Your Promissory Note contains specific information on deferments and cancellations, and the conditions that have to be met. Requests for deferment or cancellations should be sent to the Calvin College Perkins Loan Office.

Refinancing and loan consolidation options are available. These options reduce your monthly payment but will extend the repayment period and result in an increase in the total amount of interest you will pay. Contact the Calvin College Perkins Loan Office for more information on refinancing and consolidation.

A sample repayment schedule is provided below. This schedule gives an estimate of payment amounts and total interest paid over the course of the repayment period.

The entire Federal Perkins Loan (principal and accrued interest) or a portion of the loan may be prepaid at any time without penalty.

Sample Perkins Loan Repayment Schedule

• $ Maximum repayment period is 10 years
• $ Minimum quarterly payment is $120
• $ 5% interest rate
• $ Amounts are estimated and rounded to the nearest dollar

You are responsible to contact a bank to start the process for the Federal Stafford Loan. You are required to borrow the subsidized loan before you can qualify for an unsubsidized loan. The Stafford Loan application also serves as a promissory note.

If you apply for a Stafford Loan, you will need to provide the Financial Aid Office at Calvin Seminary an original of the application with your student section completely filled, signed, and dated. You will also have to complete our institutional form with the requested loan amount. Stafford Loans can be applied for at any time during the qualification period during the regular academic year. The Financial Aid Office will process these applications and provide processing information upon proper verification of enrollment.

The Federal Stafford Loans are low-interest (4.7% for loans processed on or after 7/1/05 while in school, grace, or deferment status, and 5.3% during the repayment period). The interest rate for the subsidized and unsubsidized loans is variable, adjusted annually, and capped at 8.25%. The loans have a 3% loan origination fee, accessed by the lender, which is deducted from the loan proceeds at the time of disbursement.

The subsidized loan is interest-free while the student is in school and continues to be enrolled at least half-time, during the 6 month grace period and during certain periods of deferment. The unsubsidized loan is not interest-free during in school, grace, and deferment periods. Interest payments may be made periodically, or the interest may be capitalized and added to the principal.

You are responsible to obtain the forms that will defer your payments while in school. The Financial Aid Office will process such deferment form requests when they receive them from the student. The Financial Aid Office does not initiate this process, the student does.

Repayment of Stafford Loans begins 6 months after the student graduates or ceases to be enrolled as at least a half-time student. The maximum annual amount a graduate student can borrow under subsidized Stafford Loan is $8,500 and under unsubsidized Stafford Loan is $10,000.

These loans are available to Canadian students. The loan amounts are variable and determined by the Canada Student Loan program. The interest rate is determined at the time of repayment. If you plan to apply for a Canada Student Loan, you are encouraged to do so before the beginning of the school year.

Canadian students are responsible for obtaining directly all forms that are necessary for loan processing, deferment, confirmation of enrollment, payment schedules, etc. The Calvin Theological Seminary Financial Aid Office does not carry such forms.

The seminary provides a private loan fund called the Ministry Incentive Program. Money from this fund is for North American students preparing for ordained Christian Reformed church service. It is a last resort after students have exhausted classical aid, personal and family resources, scholarships, and other loan sources such as Perkins or loans from other federal, state or provincial sources. The amount of loans from this fund is determined by the need of the student and by the amount of money available in the fund.

A student may borrow from the seminary loan fund during each year that he or she is enrolled at least half-time, but not for the internship year. No interest is charged and no repayment is required until the sixth month after the end of the last academic quarter in which the borrower was enrolled at least half-time as a student. Interest will be charged at an annual rate of 6% and repayment will begin on a schedule of monthly installments that provide for a minimum repayment rate of $25 per month and full repayment with a five-year period (but not to exceed ten years).

Effective with the 1984-85 academic year, 50% of the loan will be forgiven over a ten-year period contingent upon the student's entry into a full-time ordained position in the Christian Reformed Church. Students pay their half, plus interest, as soon as possible. Each year (for ten years) upon the student's leaving the seminary, the financial aid office will send a form requesting the vocational (and educational, if applicable) status of the student. This letter is to be signed, certified and sent back in order to qualify for the 5% reduction in the loan for that given year. You must also be in good status with your payments on your loan and have a zero balance on Calvin Seminary accounts. The student does not automatically receive the forgiveness. These accounts will be serviced by a third party called University Accounting Services (UAS). Students are required to keep UAS and the business office at the seminary informed of any change of address or status.

The above repayment and interest policy will govern the repayment plan that is worked out with the business office at Calvin Theological Seminary & UAS. Repayment shall be made to Calvin Theological Seminary c/o University Accounting Service, Inc., which shall record the repayment performance and notify the seminary's chief financial officer/accountant and director of financial aid of any irregularities. Since no interest is charged on amounts repaid within six months of leaving the seminary and since interest will be charged only on the unpaid balance, early repayment will benefit the borrower as well as the fund.

A housing subsidy is provided for qualified financial aid applicants on rental units owned by Calvin Seminary. If there are extenuating circumstances that do not make seminary owned housing suitable for you (family size, handicapped accessibility) you may submit a request for consideration to the financial aid office. This subsidy is limited by the number of students who apply, available funds each year, and financial need established by the Financial Aid Office. The subsidy (grant) is applicable only when the student makes rental payments. Though the subsidy is calculated for 12 months (September-August) during the financial aid award process and credited on a monthly basis, any changes within the academic year will affect the eligibility of this subsidy. Recipients should inform the Financial Aid Office of any changes in rental or living agreements.