Federal Direct Loans

Students who apply for federal education loans must meet citizenship and all eligibility requirements. Total education loans must not exceed the cost of attendance less financial aid from all sources.

 

  • Federal Direct Loans

    A Federal Direct Loan is an education loan provided by the U.S. Department of Education. There are two types of Federal Direct Loans for graduate students: Federal Direct Stafford Loans and Federal Direct Grad Plus Loans.

    Federal loan borrowers must meet citizenship and all federal aid eligibility requirements and be enrolled in an eligible program on at least a half-time basis (18 or more units). There is no credit check performed for Stafford Loan borrowers; however, Grad Plus borrowers are subject to a credit check during the loan application process. Students who do not meet credit requirements for the Grad Plus loan may apply with a credit-worthy cosigner. 

    Federal loans disburse in equal amounts, one for each semester covered by the loan. When loan disbursements are in excess of semester student account charges, the student receives a student account refund to use to cover other education related costs.

  • Federal Direct Loan Rates and Fees

    The interest rate for graduate Federal Direct Stafford Loans first disbursed between July 1, 2014 and June 30, 2015 is fixed at 6.21%. Federal Direct Stafford Loans have a 1.072% origination fee, which is deducted from the gross amount of the loan at disbursement.

    The interest rate for Federal Direct Grad Plus Loans first disbursed between July 1, 2014 and June 30, 2015 is fixed at 7.21%. Federal Direct Grad Plus Loans first disbursed on or after December 1, 2013 have a 4.288% origination fee deducted from the loan at disbursement.

    Students are advised to borrow their full Federal Direct Stafford Loan eligibility before borrowing a Federal Direct Grad Plus Loan.

    Note: Interest rates on Federal Direct Loans are fixed for the life of the loan. Interest rates are established each year for new federal Direct Unsubsidized and new Federal Direct Grad Plus Loans for which the first disbursement is on or after July 1st through the following June 30th.  Additional information about rates and fees for federal student loans may be found on the Dept. of Education website.

  • Applying For Federal Education Loans

    US Citizens & Permanent Residents

    Suggested Application Deadline: May 10, 2015 is the suggested deadline to submit the FAFSA. Students who do not meet the suggested deadline may still apply. The deadline is set to ensure that students have time to file their federal income tax returns before applying for financial aid and to ensure timely disbursement of loans for the Fall semester. 

     

    Step 1: Prepare & Complete Your FAFSA (Free Application for Federal Student Aid)

    File your federal income tax return approximately 3-4 weeks prior to submitting your FAFSA. Also, if you do not have a federal PIN, request one via www.pin.ed.gov so that you may complete your FAFSA electronically.

    Complete the FAFSA at www.fafsa.ed.gov indicating the Tepper School federal code, E00074.

    Important note: Most FAFSA filers have the option of using an IRS data retrieval tool when filing the FAFSA. This tool is generally available approximately 3-4 weeks after having filed your federal income tax return. It is HIGHLY RECOMMENDED that you use the IRS data retrieval tool when completing the online FAFSA. Students who refuse use of the IRS data retrieval tool or who are not able to use the tool because they do not meet the Dept. of Education's eligibility requirements for using the tool may be required to submit verification materials to the school, including a federally-required tax transcript from the IRS.

     

    Step 2: Financial Aid Information Form

    Complete a Tepper School Financial Aid Information Form (pdf) and email it to tepper-aid@andrew.cmu.edu.

     

    Step 3: Financial Aid Award Letter

    You will receive a Financial Aid Award Letter via email from the Tepper School Financial Aid Office approximately 10-14 business days after submitting both the FAFSA and the Tepper School Financial Aid Information Form (step 2). New students who wish to have their award letters sent electronically receive their award letters via the email address they have provided on the Tepper School of Business Financial Aid Information Form. Continuing students who wish to have their award letters sent electronically receive their award letters via their Andrew email account.

     

    Step 4: Federal Loan Entrance Counseling

    (First-time at Tepper School Federal Direct Loan Borrowers Only)

    Complete Federal Loan Entrance Counseling via www.studentloans.gov using your federal PIN (from Step 1). Be sure to indicate that you are a graduate/professional student. When you select your school from the drop down menu, you will have three choices for Carnegie Mellon University. It is important that you select “Carnegie Mellon University-Tepper” as your school.

     

    Step 5: Stafford Loan Application

    (First-time Federal Direct Stafford Loan Borrowers Only)

    Complete a Master Promissory Note (MPN) via www.studentloans.gov using your federal PIN (from Step 1). When you select your school, you will have 3 choices for Carnegie Mellon University from the drop down menu. It is important that you select “Carnegie Mellon University-Tepper” as your school. Please note that you are not able to indicate a loan amount on the MPN. The amount of your loan eligibility is provided to you via your Financial Aid Award Letter (see Step 3) and you subsequently indicate the loan amount(s) you want to borrow by submitting the Tepper School Loan Processing Form (see Step 8).

     

    Step 6: Perkins Loan Application

    (First-time Federal Perkins Loan Borrowers Only)

    If a Federal Perkins Loan is indicated in your Financial Aid Award Letter (Step 3) and you are a first-time Perkins borrower at the Tepper School, complete Perkins Loan Entrance Counseling and a Perkins Promissory Note via our servicer's website www.ECSI.net using school code Z9, but only after being contacted by the University to do so, generally around the start of classes in the semester in which you are first offered a Perkins loan. These documents are not available to students prior to being contacted by the University.

     

    Step 7: Grad Plus Loan Application

    (All Federal Direct Graduate Plus Loan Borrowers Only)

    Apply for a Grad Plus loan no earlier than June 1st via www.studentloans.gov using your federal PIN (from Step 1). In order to initiate a credit check, select "Request a Direct Plus Loan." When you select your school, you will have three choices for Carnegie Mellon University from the drop down menu. It is important that you select “Carnegie Mellon University-Tepper” as your school. If you receive a favorable credit decision, you must  then select "Complete Master Promissory Note" to apply for the loan. You may borrow up to the amount indicated in your Financial Aid Award Letter (Step 3). Credit decisions for Grad Plus Loans expire after 90 days.

     

    Step 8: Loan Processing Form

    All borrowers need to complete the Tepper School of Business Loan Processing Form (pdf) and fax it to 412-268-2904. This form is required in order for your loans to be processed.

  • Federal Perkins Loans

    The Perkins Loan program is a federal loan program that provides low interest (5 percent) loans to eligible students who demonstrate exceptional financial need. No interest accrues on the loan while the student is enrolled on at least a half-time basis, during the nine-month grace period and during periods of deferment. Repayment begins nine months after the student graduates or is no longer enrolled on at least a half-time basis. Perkins loans are administered through the Tepper School of Business and funds are limited. The maximum annual award amount is $8000. There are no loan origination fees for Perkins Loans. Highest consideration is given to the most exceptionally needy students based on availability of funds. A separate loan application is not required, but students must complete a Perkins Loan Promissory Note and Federal Perkins Loan entrance counseling (separate from Federal Direct Loan Promissory Notes and entrance counseling).

    Prior to the semester in which students first borrow a Perkins loan while attending Carnegie Mellon, the university contacts Perkins awardees to request that borrowers sign the Perkins Loan Promissory Note and complete Perkins Loan Entrance Counseling via our Perkins Loan servicer website, ECSI.net. Students generally are able to access these documents shortly before the start of their first semester as a Perkins borrower and only after being contacted by the University to do so. Continuing students must meet the satisfactory academic progress requirements in order to be eligible for Federal Perkins Loans.
  • Verification

    Students may be asked to submit verification of any information used to determine their eligibility for federal financial aid. This process is called "verification" and may be required by the US Dept. of Education or may be initiated by the Tepper School.

    VERIFICATION OF FEDERAL FINANCIAL AID APPLICATION INFORMATION

    The Tepper School of Business performs verification of information submitted by a student in his/her application for federal financial aid if the student is selected by the federal Central Processing System (CPS) for verification and is awarded need-based federal financial aid. The Tepper School may also select students for verification on a case-by-case basis if there is reason to believe that the student has submitted incomplete, inaccurate, or inconsistent information in their application materials. The Tepper School also performs verification prior to making professional judgment decisions that impact a student's expected family contribution (EFC) or in consideration of certain additional expenses that are above and beyond the School's published cost of attendance. In cases where the student is not selected for verification but the School discovers conflicting information that impacts a student's eligibility for federal aid, the Tepper School may request documentation other than the items listed below to resolve the conflicting information. The Tepper School may request any documentation it deems necessary to determine the accuracy of information submitted in a student's application for federal financial aid. This process is called "verification" and may be required by the US Dept. of Education or may be initiated by the School to resolve conflicting information or to make changes to federal financial aid. In order for the School to complete the verification process, students selected for verification are required to submit an IRS transcript (for the year that corresponds with the FAFSA for yourself and your spouse, if you are married) and a completed Verification Worksheet to the Tepper School Financial Aid Office. Additional verification documents may be required. All required and requested documents must be submitted prior to disbursement of federal aid.

    The Tepper School Financial Aid Office has the right to request any documentation it determines necessary to verify information provided on the FAFSA and/or other financial aid application materials. Failure to submit requested documents within the award year will result in a decision to deny federal aid. If your financial aid awards change as a result of the verification process, the Financial Aid Office notifies you in writing within 30 days of the award change.

    TIME FRAME AND CONSEQUENCES

    When required, federal verification must be completed prior to the end of the academic year or before the student ceases enrollment, whichever comes first, and generally must be completed prior to disbursement of any federal financial aid. In situations where verification is required after disbursement of federal financial aid has occurred and the verification results do not justify receipt of federal aid that the student has already received, the student is responsible for paying back all financial aid for which he/she is not eligible. Additionally, failure to submit requested verification materials with the required time frame disqualifies a student from receiving federal financial aid for the award year.

    VERIFICATION ITEMS:

    The Tepper School verifies a minimum of the following information for students selected for verification:

    • Household size
    • Number in College
    • Child support paid
    • Adjusted gross income
    • Federal income tax paid
    • Wages
    • Education credits
    • Other untaxed income reported on the tax return

    If a student is a non-tax filer and not required to file a federal tax return, income earned from work is verified in addition to the first four items shown above.

    STUDENT NOTIFICATION

    When a student is selected by the School for verification, required documents are requested either via email to the student's official Carnegie Mellon Andrew email account or in writing.  If a student's award changes as a result of the verification process, the School notifies the student via the student's official Carnegie Mellon andrew email account. If the Teppeer School discovers conflicting information that requires updates to the FAFSA, the Tepper School will either ask the student to make the change to the FAFSA via www.fafsa.ed.gov or make the FAFSA updates (if the student has authorized the School via the Teppr School Financial Aid Information Form to make FAFSA updates). 

    VERIFICATION DOCUMENTS

    1. The Tepper School Verification Worksheet signed and dated, is required.
    2. A federal tax transcript from the Internal Revenue Service (IRS) for the year that corresponds with the FAFSA is required. Please note that a signed copy of the federal income tax return is not sufficient documentation.
    3. A Statement of Educational Purpose to be Signed at the Institution (pdf) OR a Statement of Educational Purposed to be Signed with Notary (pdf).
    4. Other supporting documents may be required by request of the School.

    FRAUD OR ABUSE

    If the verification process reveals possible fraud or criminal misconduct in connection with a student's federal financial aid application and/or verification processes, the matter will be referred to the U. S. Dept. of Education for investigation.

    QUESTIONS

    Questions about federal financial aid verification policies and procedures may be emailed to tepper-aid@andrew.cmu.edu.

  • Federal Direct Loan Repayment and Default Prevention

    FEDERAL LOAN REPAYMENT

    Payment of principle and interest is deferred as long as the student is enrolled on at least a half time basis (18 or more units per semester). Additionally, the Stafford Loan provides a 6-month grace period for loan repayment after graduation or ceasing half time enrollment. Repayment of Grad Plus begins within 45 days of the end of the in-school deferment; however, you may defer payment for 6 months after you cease to be enrolled on at least a half-time basis. Students have the option of making in-school payments, including interest-only payments. Any unpaid interest that accrues while the borrower is in an in-school deferment period is capitalized when repayment begins (added to the principle balance on the loan).

    There is no prepayment penalty on Federal Direct Loans. Federal Direct Loans offer liberal repayment options including in-school deferments, unemployment deferments once in repayment, military deferments, economic hardship forbearance, loan forgiveness for certain public service employees, etc.

    DEFAULT PREVENTION

    Understanding Federal Loan Repayment

    Includes information about:

    • Making payments/repayment plans/payment estimator
    • Loan servicers
    • Loan consolidation
    • Deferment/Forbearance
    • Loan forgiveness/cancellation/discharge

    Federal Loan Exit Counseling

    Federal Loan borrowers complete required exit counseling upon graduating or dropping below half time status.

    NSLDS (National Student Loan Data System)

    Access information about your federal loan portfolio.

    My Money.Gov

    Visit this federal website for information on managing your money.

    Secure Your Credit Report

    You are entitled by law to one free credit report per year via www.annualcreditreport.com for each of the following credit reporting companies:

    Equifax Encite Program
    PO Box 740249
    Atlanta, GA  30374
    (800) 685-1111
    www.equifax.com

    Experian National Consumer Assistance Center (formerly TRW)
    PO Box 949
    Allen, TX  75013-0949
    (888) 397-3742
    www.experian.com

    Trans Union Corporation Consumer Disclosure Center
    PO Box 390
    Springfield, PA  19064-0390
    (800) 888-4213
    www.tuc.com

     FEDERAL LOAN CONSOLIDATION

    The decision of whether or not to consolidate your federal loans is very individual. The following links provide helpful information for students considering consolidation or another repayment option

    Should I Consolidate?

    FAQs about Federal Loan Consolidation (finaid.org)

    Federal Direct Consolidation Loans Rights and Responsibilities

  • Deferring Your Current Loans

    Students who wish to defer currently existing student loans should contact their lender(s) about their eligibility for deferment.  All federal and many (but not all) private loans may be deferred while a student is enrolled in an eligible program in at least 18 units our coursework.  If your lender requests verification of your enrollment from Carnegie Mellon, the university will provide this information once you are enrolled and your account is paid in full.  See the HUB’s website for more information.